OECD: POLICY COHERENCE FOR DEVELOPMENT

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SUBJECT: OECD: POLICY COHERENCE FOR DEVELOPMENT

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1. (SBU) Summary: Organization for Economic Cooperation and
Development (OECD) member states are engaged in a reflective
exercise on how best to incorporate development into OECD activities
writ large, both in terms of engaging developing countries in a
two-way dialogue, extending support to developing countries in areas
of OECD competence and examining the extent to which OECD and member
state policies and recommendations are compatible with development
goals ("Policy Coherence for Development"). The exercise challenges
OECD members to consider how to reflect a "development dimension"
while staying true to the OECD's original mandate and its
time-tested committee-led structure (and avoiding overlap with other
international organizations.) Of note, the OECD has already
successfully harnessed its policy experience and "brand name" cachet
to a number of innovative outreach activities for developing
countries, particularly in the area of tax policies. End summary.


Policy Coherence for Development
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2. (SBU) In 2008 the OECD Council launched a process to prepare
goals for a long-term development agenda for the OECD which would
take the organization beyond the traditional "donor coordination"
role and expand the OECD's engagement with new actors and promote
coherence of policies beyond aid in support of development. As a
result, OECD members are currently engaged in a reflective exercise
on how best to address development in OECD activities writ large,
both in terms of engaging developing countries in a two-way
dialogue, extending support to developing countries in areas of OECD
competence and examining the extent to which OECD and member state
policies and recommendations are compatible with development goals
("Policy Coherence for Development"). The January 21 Council
session (which will include the participation of Enhanced Engagement
partners) will officially kick off this discussion, although a
high-level meeting on January 15 on "Development Goals" provided
members an advance opportunity to speak frankly on some of the
opportunities - and pitfalls - lie ahead.

Let Me Mainstream - But Not Today!
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3. (SBU) A tour de table at the January 15 event showed superficial
agreement on what many members called the "politically correct"
mantra that development should - in theory - be mainstreamed into
OECD work. However views were mixed on the rigor with which true
"Policy Coherence for Development" could and should be enforced.
Sweden, Australia and Canada noted that the most significant OECD
member "incoherence" (and one that negatively affected developing
countries) was in the area of agricultural policy (others added
migration). They pointed out, however, that members were not eager
to discuss this particular lack of coherence. Finland noted that -
particularly in a time of global economic crisis - national
interests would trump development, stating that "our leaders have
other constituencies than development institutions." The European
Commission stated OECD committees should be mindful of policy
coherence, but added that the WTO was the forum to address trade and
agriculture issues. The UK and Denmark concluded that mainstreaming
was probably better thought of as a long-term rather than short term
goal.

Improving OECD Outreach to Developing Countries
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4. (SBU) Most members agreed that there were OECD activities and
products of interest to and use by developing countries - and that a
surprisingly large number of excellent activities were ongoing. The
Africa Tax Forum was cited as a good example of OECD outreach within
its particular area of expertise. The OECD/MENA program was
described as a positive example with strong developing country
ownership. The majority of members stressed that the OECD should
not become a "development agency" and therefore needed to prioritize
the areas for work with developing countries. USDel cited areas such
as taxation, anti-bribery and promoting sound economic policies as
priority areas. Other countries highlighted food security, climate
change and investment policies.


5. (SBU) The European Commission noted that as Official Development
Assistance (ODA) funding was tight, the OECD could helpfully analyze
innovative financing sources, such as remittances, and taxation, and

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highlighted the excellent work the Development Center is doing with
Africa. The Czech Republic seconded this suggestion, suggesting that
the OECD Development Center study the role and impact of non-ODA
sources of funding. Finland suggested that the Development Center
analyze the last half a century of development assistance. A number
of countries regretted the fact that not all OECD members were
members of the Development Center (Comment: referring most notably
to the United States, Japan, and Australia. End comment). Belgium
noted that "Policy Coherence for Development" was about promoting
behavioral change of donors. But it was important to know what the
developing countries themselves wanted. The Development Center
should be used as a platform to find this out. Several members
asked who the target countries were: was it the least developed
countries, the middle-income developing countries, the emerging
economies? Members noted that in this day and age the "catch-all"
of developing country was increasingly meaningless. USDel and the
European Commission welcomed the discussion as a whole as reflecting
the "whole of government" approach that was taking place in
Washington and Brussels.

Questions on Process
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6. (SBU) Members had questions on the end product of the exercise:
would the final outcome of the exercise be a Ministerial Council
Meeting (MCM) declaration? Would it be a binding recommendation?
Would it be a requirement to OECD Committees to integrate a
development perspective that would eventually be part of the
biennial Program of Work and Budget? It was noted that unless OECD
committees - the work-horses of the OECD project - were involved,
the outcome was unlikely to be meaningful.


7. (SBU) The Netherlands -speaking last -summarized the debate
nicely by saying: "I cannot answer these questions because I don't
know what we want." Are we trying to improve the effectiveness of
OECD bodies or are we trying to find ways and means to increase
cooperation with developing countries? He suggested that all OECD
committees be asked to report to the Council to explain what they
were doing on development now, and what their development dimension
could be (note: this process has actually already been initiated in
the run-up to the January 21 Council meeting on Development. End
note)

Comment:
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8. The exercise as a whole serves as a reminder that - in an era of
globalization and increasing economic clout by major emerging
economies - the D in OECD can no longer to be assumed to be simply
the development of Western economies. The debate also demonstrates
the tension that OECD members (to varying degrees) see between
incorporating a "development dimension" to the OECD's work while
staying true to its original mandate (and its time-tested
committee-led structure.) But discussions notwithstanding, it is
clear that the OECD has already successfully harnessed its policy
experience and "brand name" cachet to a number of innovative
outreach activities for developing countries, particularly in the
area of tax policies. Kornbluh