Gurría’s quest for relevance at OECD
On November 25, Angel Gurría, Mexico’s gregarious and energetic former Finance minister, became the first citizen of an emerging-markets country to be elected secretary general of the Organization for Economic Cooperation and Development since its founding in 1961.
On November 25, Angel Gurría, Mexico’s gregarious and energetic former Finance minister, became the first citizen of an emerging-markets country to be elected secretary general of the Organization for Economic Cooperation and Development since its founding in 1961. The 55-year-old Gurría, who will replace Canadian Donald Johnston in June, hopes to raise the profile of the group, in which 30 democratic nations work together to address the challenges of globalization.
To have more impact, the OECD “must set priorities that allow the organization to pick up the relevant issues of the day,” Gurría tells Institutional Investor. For a start, it should focus on “macroeconomic balances, questions dealing with protectionist pressures and obstacles to investment,” he says. “To make it more relevant, you have to make it more prominent, show what it does and why.”
The OECD conducts economic research and promotes policies to remove obstacles to world trade and to stimulate international flows of capital. Gurría would like to see the OECD serve as the secretariat of globalization, smoothing out the bumps in the process. The group has designed rules to combat money laundering and corruption, for example. But it has been constrained by the need to reach consensus among its members, a lack of funds for backing policy implementation and growing competition from a host of multilateral agencies.
Gurría hopes to overcome those obstacles in part by growing the organization. He’d like to extend OECD membership to six smaller European Union countries as well as to such emerging markets as Brazil, China and India, if current member countries agree.
“It is either membership or very strong engagement with these countries so you remain credible, serious and relevant,” the new secretary general says.
Another goal is to streamline decision making inside the OECD. Until now, deciding on policy or strategy has required lots of debate and arm-twisting to forge consensus among all 30 member states on every issue. Gurría hopes to add some flexibility to the process, especially when dealing with more-routine matters.
“I think not all decisions require the same level of consensus,” he explains.
Gurría, who was Mexico’s chief negotiator in talks to restructure its debt in the 1980s, knows global financial markets and multilateral institutions as well as anyone. He built solid working relationships with U.S. government officials and hundreds of international bankers. He served as Mexico’s Foreign minister from December 1994 through January 1998, when he became Finance minister, a job he held through 2000. In the latter post he guided Mexico through a presidential succession without an economic crisis, for the first time in a generation. Since 2000 he has worked on various corporate boards.
To advance his vision, Gurría will strive to expand OECD resources by raising outside funds, pursuing foundations, corporations and high-net-worth individuals interested in funding policy work.
“If we had gotten to Ted Turner before Kofi Annan, we probably could have gotten $50 million,” he quips, referring to the $1 billion donation the cable TV magnate pledged to the United Nations in 1997.
He begins his tenure with a solid U.S. endorsement. “We fully support him,” says Treasury Department spokesman Tony Fratto. “He will be a strong, charismatic leader of the institution. And coming from an emerging-market country, we think he will effectively lead OECD’s expansion and engagement with other emerging economies.”
Of course, there will be challenges. “He’s got to get some money and keep his good staff, but if anybody could do it, it’s Angel,” says Frederick Jaspersen, Latin America chief for the Institute of International Finance, a banking lobby group in Washington.