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Last Updated: Tuesday, 23 May 2006, 12:26 GMT 13:26 UK
Selling globalisation to the world
Profile
By Steve Schifferes
BBC News economics reporter at the OECD in Paris

Jose Angel Gurria (Photo: OECD)
Mr Gurria faces big challenges in his new role

For the first time, one of the world's leading international economic organisations will have someone from the developing world at its head.

On Wednesday Angel Gurria, the former Mexican finance minister, officially takes the helm at the Organisation for Economic Co-operation and Development, or OECD, the global economic think-tank for 30 of the world's richest countries.

The OECD was set up in 1961 to help co-ordinate the economic reconstruction of Europe. Now Mr Gurria wants to transform it into an organisation that helps manage the process of globalisation everywhere.

That means bringing into the OECD key emerging giants like India, Brazil and China.

It would be the biggest change in the history of the organisation and would require far-reaching changes in how the OECD is governed and funded.

And some voices have already been raised - particularly in the US - about whether it would be appropriate to reward countries such as Russia, whose adherence to market principles is still partial.

We have not been skilful or competent enough to spell out the benefits of reform
OECD Secretary General Jose Angel Gurria

In an interview with BBC News, Mr Gurria said it was "very important" to him that the OECD tackled this challenge and "very important" that it got it right.

He argued that a comprehensive approach, rather than a piecemeal increase in OECD membership, was the right way to tackle this issue, even if it meant that for some countries, the OECD just played a "supporting role".

At its annual meeting, the OECD gave Mr Guirria one year to prepare his plans for expansion.

Reform spokesman

And Mr Gurria sees his role in an even wider context - as a key spokesman for global economic reform.

He says the "biggest challenge" facing him in his new role is to understand "the political economy of reform" and to learn "how to sell the benefits of global economic transformations to governments, parliaments and the public".

Former US trade representative Rob Portman
Trade officials are struggling to save the Doha round of talks

And he admits that the advocates of globalisation are in danger of losing the argument, because they have been effective enough in the media in making the case that global economic changes benefits the man in the street and his family.

"We have not been skilful or competent enough to spell out the benefits of reform," he told the BBC.

And he warned that there was a danger of a backlash, particularly on trade.

He warned that a failure of the Doha round of world trade talks, which is stalled over disagreement between rich and poor countries, could have serious consequences.

"If you are not making progress, you could go backwards, and protectionism may rear its ugly head," he said.

Global imbalances

Mr Gurria believes that his background - as someone who understands the challenges of development and poverty in poor countries - can make him a more effective advocate of this cause.

Chinese workers making shoes
The rise of China and India has changed the world economic order

But he says he is even more concerned about the political difficulties of achieving reform in rich countries, especially in the EU, where there has been a bout of protectionism in relation to cross-border takeovers.

The new OECD secretary general believes that reshaping his organisation to reflect the new shape of the world economy could have other benefits.

He suggested that countries which had signed up to the OECD's principles would be more likely to agree to further of measures of liberalisation, for example in the area of currencies.

But he warned that the world could not afford to sit back and wait for such change before tackling global imbalances, which had grown fast in the last few years and were "a very serious problem".

Disruption

Mr Gurria has experienced such crises in his own country, as a key official in the finance ministry during Mexico's peso crisis, and was involved in restructuring Mexico's foreign debts.

He also played a key role in the Nafta negotiations with the United States and Canada that resulted in the North American Free Trade Agreement.

He believes that when countries take the first step towards free trade, they begin to understand its benefits better, and cites Mexico's outward-looking agreements with the EU, Japan and Apec.

But Mr Gurria faces big challenges. He is taking office at a time when globalisation is seemingly less popular than ever, particularly in the rich countries.

And other global institutions, such as the IMF and the G8 group of rich countries, are also looking for new roles in managing the global disruption caused by the rise of China and India.

Mr Gurria says he is happy to work with other groups behind the scenes, and believes that the OECD has comparative advantages in that it has the broadest vision of any international organisation.

As the world trade talks enter a crucial stage - with a key meeting on the sidelines of the OECD - such challenges are already on his doorstep.


SEE ALSO:
OECD warns on global imbalances
22 May 06 |  Business
India and China 'to boost Africa'
22 May 06 |  Business
G7 economies 'on track' says OECD
06 Mar 06 |  Business
Irish economy cheered on by OECD
02 Mar 06 |  Business
OECD warns on eurozone rate rise
29 Nov 05 |  Business
US growth still solid, OECD says
28 Oct 05 |  Business


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