New Delhi, Feb 4 (IANS) Reading signs of an economic turnaround, the Paris-based Organisation for Economic Co-operation and Development (OECD) is setting up an office in the Indian capital to intensify engagement with the South Asian nation that could lead to its joining the influential 34-nation forum.
India is one of the five countries -- others being Brazil, China, Indonesia and South Africa -- where the OECD has set up a process of "enhanced engagement" based on a mandate of the grouping's ministerial council. "Enhanced engagement" is distinct from accession to the OECD, but has the potential to lead to membership.
Former US Assistant Secretary of State for South Asia Richard Boucher, who is now Deputy Secretary-General of OECD, along with Federico Giammusso, senior advisor who will head the India office, held talks with the Prime Minister's Office, the Ministry of External Affairs, Trade and Industry Minister Anand Sharma and top officials last week on cooperation on a range of issues concerning economic reforms, corporate governance, taxation and energy.
Boucher said the talks covered the macro-economic situation and the government's policy agenda and the national objective of inclusive growth in which the "OECD is very much interested in".
"The OECD is interested in the Indian experience, the progress beyond GDP (gross domestic product)," Boucher told IANS in an interview.
Set up in 1961, OECD is one of the world's largest fora for nations to work together to promote policies to improve economic and social well-being. The organisation is one of the world's largest and most reliable sources of comparable statistics and economic and social data.
With India, its cooperation dates back to 1995. Though the country is hobbled by poor infrastructure, red tape and corruption, the OECD believes India's growth, impacted by its democratic character, in the long run will be sustainable and durable.
In January this year, the OECD said the Indian economy is showing signs of a turnaround as political leaders got a grip on the so-called policy paralysis.
In a report late last year it had said more reforms were necessary for high and inclusive growth and that India should reduce trade and foreign direct investment (FDI) barriers and issue more banking licences. The think tank had also called India to go for more efficient use of subsidies as well as a simpler and broader tax system like the Goods and Services Tax (GST).
Asked about India joining the OECD, Boucher said the OECD "wants to expand" and there are seven countries which are looking at becoming members of the organisation. "It is open for India."
Asked further about India's reservations about OECD membership as it does not want to lose its developing country status and thereby the benefits it enjoys, he said "there is no such requirement" for giving up the privileges.
"We are working with India for common cause, common interests" that cover a number of areas. Becoming a member would be a step from "the specific to comprehensive, from cooperation to partnership", he said.
During the recent World Economic Forum meet in Davos, OECD Secretary-General Angel Gurria said the OECD had invited India to become a member about five-six years ago. "The timing is theirs to choose... but the substance of the engagement is critical. Membership or not, I think we can both benefit a lot."
"We have a very active dialogue with India, and we are preparing our third full economic survey; we are preparing to perhaps have some people on the ground in Delhi, maybe a modest presence, so we are engaging. We believe India has something to gain from this engagement."
Asked about any suggestions for Indian policy makers, Boucher said: "Well, we only produce best practices." India could learn from other countries' developmental experiences.
A working group headed by SEBI Chairman U.K. Sinha has suggested adopting the OECD model that treats any foreign investment above 10 percent as FDI and below 10 percent as Qualified Financial Investors flows.
On the free trade agreements emerging nations like India are signing these days, Boucher said: "These agreements will bring India a better and stronger place in the creation of global values."
The OECD and WTO in a recent research project on value-added trade highlight the increasingly fragmented and global nature of the production process and the need for more openness.
Because the supply chain for products is now often global, exporters' success in international markets depends not just on their capacity to make the finished product but on their ability to import the materials used in its manufacture.
Boucher welcomed economic integration of South Asia. "Fewer barriers are better for individual countries and also the region."
(Saroj Mohanty can be contacted at firstname.lastname@example.org)