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Paris, France (UPI) Feb 16, 2006 The incoming chief of the Paris-based Organization for Economic Cooperation and Development offered a mediocre forecast for the 2006 global economy Thursday, warning of a series of risks that might set it off stride. In an interview with members of the Anglo-American Press Association of Paris, former Mexican finance minister Angel Gurria also said the OECD must first figure out its priorities -- including how it wants to spend its money -- before considering the possible membership of emerging heavyweights such as China and India. "It is not feasible, possible, realistic or efficient that we discuss enlargement before we discuss governance," Gurria said. "You cannot invite new members if you cannot tell them how you're going to take decisions. What are they going to get for their money? How much is it going to cost them? And how much are they going to participate?" Gurria's remarks come as the OECD is battling criticism that it has lost its clout and its way in the 21st century. Some believe the OECD -- the 1961 successor to the organization that presided over the Marshall Plan -- is an outdated relic of the cold war, unable to compete against such agencies as the World Bank and International Monetary Fund. It is even failing to live up to its reputation as a rich man's club. Today, the OECD's 30 members comprise only 60 percent of the world's economic output -- a figure that will likely drop to 40 percent by 2020. But Gurria, who begins his new job in June, argues the organization remains relevant -- in part, if it can serve as a permanent think tank of sorts for the G-8. And he said what set it apart from the World Bank and the IMF -- notably that it does not lend money or fund development projects -- may be a strength. "It doesn't have to prove that a particular dam was well built, or that the environmental criteria applied to a particular project...was successful, or that a particular loan has a rate of return of X," he said. The former minister, who last November beat out an impressive array of candidates for the top OECD slot, including former Polish prime minister Marek Belka, has vowed to raise the organization's profile. In an interview with the International Herald Tribune last year, he said there was "retooling to do," within the organization. On Thursday, Gurria suggested the OECD needed to streamline and possibly pare its programs and goals. "We haven't been able to stop anything," he said. "We have a great capacity to pick up new stuff, but because of the way in which take decisions, clearly there is always one or two or three countries that are interested in not dropping some activity that maybe was relevant 30 years ago." Gurria declined to predict membership chances of a handful of powerful, emerging economies, including South Africa, India, Brazil and China. The matter of new membership is a divisive one. The U.S., for example, would like countries like Israel or Chile to be considered. The Europeans favor Baltic and other nearby countries. For his part, Gurria reiterated the nebulous criteria of "like mindedness" necessary for OECD membership -- and suggested membership questions were over exaggerated. "The assumption is that if there's no enlargement, the OECD will lose relevance," he said. "And I that, I think, is a trap." But Gurria outlined a "plan B" in which countries like China could play an active role in the OECD even if they are not granted full membership. "The reality is very simple," he said, "whether it is full membership or whether it is active, vigorous engagement, the OECD cannot effort not to incorporate the likes of China in its work." An energetic and engaging politician, Gurria helped usher Mexico out of its financial crisis in the 1990s as the country's one-time finance minister. On Thursday, he warned of the risks posed to the global economy this year, ranging from high oil prices, to the stalled World Trade Organization talks to worrying deficits and insufficient savings in the United States and a handful of other developed country economies. "Everybody agrees there's a problem...(the question is) what's being done about it?" Gurria asked about what he described as a savings and deficit imbalance. "Who's minding the shop? And that's a good question."
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![]() ![]() China has overtaken the United States to become the world's biggest exporter of IT and communications equipment and is increasingly sourcing components from its Asian neighbours at the expense of US and European companies, a study by the OECD said on Monday. |
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