BRASILIA: Brazil entered with a formal request seeking membership at the Organization for Economic Co-operation and Development (OECD). In a letter to Secretary-General Angel Gurría, Brazil said that joining the organization “is part of a wider strategy of the Brazilian government to consolidate a path for sustainable and inclusive development.”
Still battling its worst recession in history, Brazil wants to send a positive message to investors. While previous administrations have focused on relations with developing nations, Michel Temer’s government wants to strengthen ties with the U.S. and Europe.
The membership process would certainly depend on the approval of pending reforms. The labor reform is in the Senate, but there’s no timetable for the pension system reform.
The Paris-based think tank is a forum of countries describing themselves as committed to democracy and the market economy. Most of its 35 members are wealthy nations.
If the OECD approves the request, Brazil would become the largest emerging economy in the group, and the third Latin American nation admitted to the group. Mexico and Chile are already members. And Colombia has been in membership talks since 2013.
In normal cases, the membership process can take years. However, Secretary-General Angel Gurría wants to fast-track the inclusion of key nations, such as Brazil, China, South Africa, and Indonesia.
But to become a full OECD member, Brazil would have to reform its tax system. “Joining the OECD is not simple or easy,” said Welber Barral, Brazil’s international trade secretary from 2007 to 2011. “Changes to tax regulation and governance would face tough resistance from Brazil’s powerful bureaucracy.”
Back in June 2016, the OECD published a forecast for Brazil. It stated that the country’s “deep political divisions have reduced the chances for any noticeable momentum on policy reforms.” For other Latin American countries, like Mexico, Colombia, and Chile, the think-tank forecasts growth improvement.
José Serra, the then-head of Brazilian diplomacy, had a strong choice of words about the OECD. “The OECD doesn’t state anything. That’s nonsense. They are speculating with the little information they have,” he said. Serra also called the report “unsophisticated.”
Serra is no longer in the government, and Brazil hopes that the think tank has already forgotten about him.
