Search

 

Cablegate: Oecd Council and Enhanced Engagement Partners Discuss

VZCZCXRO7662
RR RUEHRN
DE RUEHFR #0140/01 0361509
ZNR UUUUU ZZH
R 051509Z FEB 10
FM AMEMBASSY PARIS
TO RUEHC/SECSTATE WASHDC 8257
RUEHSS/OECD POSTS COLLECTIVE
RUCNDT/USMISSION USUN NEW YORK 1779
RUEHGV/USMISSION GENEVA 0006
RUEHSG/AMEMBASSY SANTIAGO 0025
RUEHBJ/AMEMBASSY BEIJING 2173
RUEHJA/AMEMBASSY JAKARTA 0755
RUEHSA/AMEMBASSY PRETORIA 2001
RUEHSL/AMEMBASSY BRATISLAVA 0034
RUEHBR/AMEMBASSY BRASILIA 0008
RUEHNE/AMEMBASSY NEW DELHI 1366

UNCLAS SECTION 01 OF 04 PARIS 000140

SENSITIVE

SIPDIS

ALSO FOR USAID

SENT FROM USOECD

12958: N/A
TAGS: EAID ECON EFIN ETRD OECD XA XE XF XL XM
SUBJECT: OECD COUNCIL AND ENHANCED ENGAGEMENT PARTNERS DISCUSS
DEVELOPMENT

REF: A) PARIS 61, B) SECSTATE 5422

PARIS 00000140 001.2 OF 004


1. (SBU) Summary: The Council of the Organization for Economic
Cooperation and Development (OECD) met in an enlarged session with
Enhanced Engagement and Accession Country countries to discuss the
development dimension of OECD work on climate change, trade,
taxation, and food security. The discussion will feed into the
eventual articulation of "OECD Development Goals" as requested by
last year's Ministerial Council Meeting. The session was also
designed to signal to Enhanced Engagement Partners the interest of
the OECD Council in hearing their views on OECD involvement in these
areas. Council members for the most part used the meeting to
showcase their own aid efforts, but also voiced support for OECD
work in food security, integrating climate change into development,
and mobilization of domestic resources (such as taxation). USOECD
Ambassador Kornbluh urged the OECD to choose a limited number of
issues, work horizontally, and invite countries to participate which
have demonstrated a commitment to sound economic governance. The
two Enhanced Engagement partners which spoke brought different
viewpoints: the delegate of Brazil focused on his country's success
in riding out the global financial crisis; the delegate of India
highlighted the differences between "lifestyle emissions" of OECD
countries and "survival emissions" of developing countries and his
hope that the OECD would engage in more frank discussion of these
divides. The Secretariat is working to pull together a conclusion
from these development meetings for the upcoming Ministerial Council
Meeting in May. End summary.

OECD COUNCIL MEETS ON DEVELOPMENT WITH ENHANCED ENGAGEMENT PARTNERS

--------------------------------------------- -------
2. (U) on January 21, the OECD Council met in an enlarged session
dedicated to development issues with Enhanced Engagement Partners
and Accession countries invited to participate. Partners Brazil,
China, Indonesia and India attended (South Africa was absent.)
Accession countries Estonia, Slovenia, Israel and Russia also
attended. Accession and Enhanced Engagement countries were
represented at the level of Deputy Chief of Mission or below.

3. (U) Before opening up debate, the OECD Secretariat gave a brief
presentations on "the Impact of the Crisis on Emerging and
Developing Economies" and outlined areas where OECD work in climate
change, food security, tax and domestic resource mobilization, and
trade has implications for developing countries.

EMERGING AND DEVELOPING ECONOMIES WEATHER THE CRISIS
--------------------------------------------- -------
4. (U) The OECD presentation on the global economic crisis
highlighted the extent to which the emerging economies have led the
world out of the economic crisis. Many of these countries were
reaping the benefits of macro policies put in place years ago.
Nonetheless, the economic crisis had dealt a blow to development
commitments and enforced the need for cooperation in development
architecture. There were setbacks to achieving the Millennium
Development Goals (MDGs). Protectionist reactions to the crisis had
not yet emerged, but this needed to be closely monitored. Going
forward, trade and investment were drivers of growth, but green
growth and innovation provided new opportunities for developing and
emerging economies. Trade between developing countries was now
greater than with OECD countries. Developing countries needed to
build and reinforce institutions and find new domestic resources,
such as taxes. Corruption was a serious problem, particularly in
connection with oil resources. OECD Development Center Director
Javier Santiso concluded that the economic crisis had acted as an
accelerator of change. It was also an opportunity for "humility" -
to see that best practices were not only in developed countries. He
encouraged more south-south peer learning.
BRAZIL EXPLAINS HOW
-------------------
5. (U) The delegate of Brazil (Minister Counselor Ricardo Guerra,
head of the OECD Section within the Brazilian Embassy in Paris)
noted that Brazil had been one of the last economies to be hit by
economic crisis, and one of the first to recover. Brazil's economy
resumed growing at end of 2009, and consumer and business confidence
was going up. Brazil adopted a number of financial policies
including increasing the social safety net and increasing minimum

PARIS 00000140 002.2 OF 004


wage. In addition, Brazil used its financial resources to sell
foreign currency and buy local currency, kept its interest rates
low, cut taxes to stimulate economy, and revised its primary surplus
target. The fiscal impact has been a small increase in public
debt. Net public debt increased to 44% of GDP. For Brazil the main
lesson was that it needed counter-cyclical policies and reserves.
He also credited "heavy handed prudential financial regulations."
According to Guerra, developing countries needed to rely on their
own resources to survive the crisis.
OECD JOINT WORK ON CLIMATE CHANGE, FOOD SECURITY, TAXATION, AID FOR
TRADE
--------------------------------------------
6. (U) Climate Change - Environment acting Deputy Director Helen
Mountford noted that in the future the main emitters of greenhouse
gasses will be the emerging economies. She summarized the
conclusions of the Copenhagen COP 15 conference and highlighted
areas where OECD could contribute, including providing policy advice
on how to build up a global carbon market, proving information on
efficient and effective policy mixes for emissions reduction and
adaptation nationally and sub-nationally and tracking progress in
implementing adaptation and mitigation actions (note: OECD is
already tracking bilateral finance flows to support mitigation
actions through the Development Assistance Committee (DAC), and has
recently developed a marker for adaptation. End note).
7. (U) Ms. Mountford noted that OECD was positioned to work on
finance issues, including how to raise public and private finances
(including innovative finance) and monitoring and reporting on
finance flows. OECD was set to continue work on guidelines and
guidance on integrating adaptation into development cooperation and
national development policies, and to work on MRVing targets,
actions and finance to enhance transparency and progress, and on
market mechanisms (CDM, sectoral approaches, cap-and-trade, etc).
And finally, the OECD provided a forum for countries to discuss key
issues outside formal negotiations and build common understanding.
OECD worked with developing countries through the DAC-EPOC Task
Teams, the Africa Partnership Forum, and the Roundtable on
Sustainable Development.
MEXICO ON COP16
-----------------
8. The Mexican Ambassador reported that expectations were high for
the upcoming COP16 meeting in Mexico. Mexico had been disappointed
at the Copenhagen outcome, and hoped that the COP 15 commitments
would be made binding at the COP 16 meeting. Mexico supported the
concept of differentiated responsibility, but explained that this
should not be understood to be a "license to do nothing." Climate
change was multi-disciplinary area and impacted areas ranging from
development assistance to trade to Intellectual Property Rights
(IPR). The OECD's advantage lay in its ability to muster
multi-disciplinary approaches to the issue.


9. (U) Food Security - Development Cooperation Directorate Director
Richard Carey noted that the recent food crisis had been mitigated,
but had not disappeared. India was in fact facing a poor monsoon
season. Carey stressed that food security was inextricably linked
to the credibility and efficiency of the international trading
system. He noted that the DAC had been tasked to track food
security commitments. DAC was also (with Gates Foundation funding),
working on African policy improvement.
10. (U) Taxation - The Director of the OECD Center for Tax Policy,
Mr. Jeffrey Owens explained that tax systems can provide a
sustainable revenue base, an antidote to aid dependency, a stable
and predictable pro-growth environment, and play an important role
in state building and recovery from conflict. By making government
more accountable, a good tax system supported democracy. He noted
that he was spending one third of his Directorate funds on non-OECD
members. They had trained more than 15,000 tax official in China,
and had worked with South Africa (where government revenues have
increased by 30% due to better tax collection). However, donor
countries spent less than 1 percent of aid funding on taxation
support. He encouraged donors to match resources to rhetoric. He
also noted that the Center was working with the DAC to determine how
they together could respond to a follow-up request from a group of
African countries that want to tap into the best practices and
lessons learned by OECD-member countries on tax and domestic
resource mobilization approaches.

PARIS 00000140 003.2 OF 004


11. (U) Aid for Trade - The Director of the Trade and Agriculture
Directorate, Ken Ash said trade plays an important part in a wider
strategy to improve growth, although open markets alone are not
enough to ensure growth and development. He emphasized that
complementary policies are also needed to provide a stable
macroeconomic environment, effective systems of governance, improved
human capital and physical infrastructure, etc. He noted that less
developed countries face specific constraints, such as weak
institutional capacity and limited or costly access to credit. Aid
for Trade, a joint WTO-OECD initiative, is even more important in
the current context as developing countries have been hit hard by
the economic crisis and subsequent trade collapse, and the
tightening of trade finance. The OECD can complement the Aid for
Trade monitoring with evaluating the impact of specific measures,
identifying binding constraints to trade expansion, maximizing the
impact of trade on growth, and developing good practice guidelines
for complementary policies.
OECD MEMBERS WELCOME WORK ON SUSTAINABLE DEVELOPMENT, FOOD SECURITY
AND MOBILIZING DOMESTIC RESOURCES
--------------------------------------------- ------
12. (U) Interventions from Mexico, France, Greece, Germany, the
Netherlands and Norway highlighted those countries intentions to
prioritize the Copenhagen "Fast Start" and praised OECD's work on
monitoring adaptation and mitigation and integrating climate change
issues into development. Delegates also welcomed OECD work on food
security and mobilizing domestic resources. The UK delegate called
the OECD's emerging work on tax and development with the DAC a good
example of a successful horizontal approach between directorates.
He stated that members should identify Part I (assessed) resources
for the next biennium to support such activities. Korea noted that
development would be one of its priorities for the upcoming G-20
meeting in Seoul.
13. (U) Several countries spoke of the important work being done by
the OECD's Development Center and lamented that a number of major
OECD countries (e.g., U.S., Japan, Canada, and Australia) were not
members. Switzerland, in comments that were echoed by the
Netherlands and Korea, issued a call for all OECD embers to join for
reasons of both resources and visibility. Enhanced Engagement
country Brazil said that these major OECD countries could play a
fundamental role in the Development Center, and urged them to
re-think their position.
14. (U) USOECD Ambassador Kornbluh welcomed the OECD's increased
focus on development issues. She pointed out that the U.S. was
upgrading development to be a central pillar of its foreign policy,
along with defense and diplomacy. US development principles include
shared responsibility between donors and recipients, innovation that
can transform lives and speed development, gender (investment in
women and girls' health, education, etc.) and a whole-of-government
approach. The OECD can bring together best practices and donor
coordination in support of development, but must be selective due to
human and financial resource constraints and concentrate on areas
where there is congruence between OECD core competence, committee
expertise, and member priorities. Future projects should be guided
by clear demands from developing countries willing to share
development responsibility and having sound economic policies and
good governance.
INDIA ARGUES FOR FRANK DIALOGUE
---------------------------------
15. (U) The Indian delegate gave a spirited presentation on why
India was ambivalent towards the OECD. Saying he was speaking
personally and without instructions, he said that the OECD should be
less timid and engage in more honest dialogue. For example, on the
issue of border tax adjustments, India thinks it could be a
potential disaster, and yet it is talked about as if it is a done
deal without any discussion of its negative aspects. Or on climate
change, should there not be a discussion on the difference between
lifestyle emissions (low gas mileage cars) and survival emissions?
Or on IPR, shouldn't there be a frank discussion on the impact of
IPR protection on the availability of technologies for developing
countries? He said that he recognized that the OECD is doing some
good things, citing as examples taxes and steel. And he suggested
that the OECD could in the future focus on such areas as innovation,
education, infrastructure, and technology. But he also hoped that
OECD could capture the spirit of frank dialogue with the developing
countries.


PARIS 00000140 004.2 OF 004


Next Steps
----------

16. (U) The OECD Secretariat is working to synthesize the results of
the January 15 (ref A) and January 21 meeting and is expected to
call an additional meeting of the Development Goals Working Group.
As instructed by the 2009 Ministerial Council Meeting (MCM), a
report will be prepared for the 2010 MCM on OECD Development Goals.
Member input will be important to shape this outcome, and determine
how far members wish to see the OECD advance in this area. Outcomes
could range from an instruction from Council for Committees to
jointly advance work on certain areas (such as climate change, food
security or tax issues) to specific project proposals to be funded
from the 2011-2012 Program of Work of Budget (and/or through
voluntary contributions). Kornbluh

© Scoop Media

 
 
 
World Headlines

 

UN: India’s New COVID-19 Wave Is Spreading Like ‘Wildfire’, Warns UN Children’s Fund

7 May 2021 A new wave of COVID-19 infections is spreading like “wildfire” across India, leaving many youngsters destitute, the UN Children’s Fund UNICEF said on Friday. In the last 24 hours, India registered 3,915 coronavirus deaths and 414,188 ... More>>

UN: Decades Of Health Gains At Risk In Brazil Due To COVID-19

Although COVID-19 cases are declining in Brazil, the pandemic is putting decades of public health gains there at risk, the head of the World Health Organization ( WHO ) said on Friday. With global attention and support focused this week ... More>>

UN Report: Myanmar Approaching Point Of Economic Collapse

The turmoil following the military coup in Myanmar, coupled with the impact of COVID-19 could result in up to 25 million people – nearly half of the country’s population, living in poverty by early next year, a United Nations report said on Friday. That ... More>>


Focus On: UN SDGs

Study: Cut Methane Emissions To Avert Global Temperature Rise

6 May 2021 Methane emissions caused by human activity can be reduced by up to 45 per cent this decade, thus helping to keep global temperature rise to 1.5 degrees Celsius in line with the Paris Agreement on climate change, according to a UN-backed ... More>>

UN: Learning From COVID-19, Forum To Highlight Critical Role Of Science, Technology And Innovation In Global Challenges

New York, 4 May —To build on the bold innovations in science, technology and innovations that produced life-saving solutions during the COVID-19 pandemic, the UN will bring together experts to highlight measures that can broaden the development and deployment ... More>>

What COVID-19 Has Taught Us: “Healthcare Can No Longer Exist Without Technology”

A grandmother in a village in the Gambia should have the same quality of life and access to healthcare they deserve as in New York or London. Photo: InnovaRx Global Health Start-up Works To Bridge Healthcare Gap In The Gambia By: Pavithra Rao As ... More>>