What is OECD?
OECD serves as a platform for government to collaborate on economic, social, and environmental policies. OECD is an important international organisation founded in 1961. OECD comprises 38 member countries from around the globe. The core mission of the OECD is to promote policies that improve the well-being and living standards of people globally. The main objective of the OECD is to foster sustainable economic growth, stability, and prosperity.
Full form of OECD
OECD stands for Organisation for Economic Cooperation and Development. It is an international alliance of 38 member countries that aims at making society better as a whole. OECD focuses on maintaining stability in the economic, social, and environmental environment of member countries.
Geeky Takeaways:
- OECD is an alliance of 38 countries that aims to stabilise and promote the overall growth of the member nations.
- OECD performs various functions like publishing economic data, analysing issues, forming tax reforms, etc.
- The overall functioning of the OECD aims to develop solutions to complex international problems.
- Since the emergence of OECD in 1961, several conventions and dialogues have shaped OECD.
- OECD is funded by its own member countries. Individual nation’s contributions are based on a formula that takes into account the size of each member nation’s economy.
- Some members list of the OECD are the USA, Japan, Mexico, Germany, the UK, etc.
- Lithuania and Costa Rica have recently become the members of OECD.
- India is one of the non-member economies with which OECD has had working relations since 1995.
Table of Content
History of Organisation for Economic Cooperation and Development (OECD)
In the year 1948, the Organisation for European Economic Co-operation (OEEC) was established to allocate and distribute Marshall Plan aid for the countries of Western Europe. The Marshall Plan is a US-sponsored initiative, governed by the Organisation for European Economic Co-operation (OEEC). The OEEC was renamed as the Organisation for Economic Cooperation and Development (OECD) in 1961, to reflect the inclusion of the United States of America and Canada, and it became fully operational in 1961.
Objectives of OECD
The primary objective of Organisation for Economic Cooperation and Development (OECD) is to improve the global economy and encourage international trade. It entails collaborating with democratic countries to share a commitment to enhance the economy and overall well-being of their citizens. The major goal of the OECD is to assist member nations and non-member countries around the world in achieving the following:
1. Economic Growth and Stability: OECD focuses on promoting the policies that support sustainable economic growth and stability among the countries. OECD also focuses on maintaining and improving the international corporation and coordination regarding economic and social policies.
2. Policy Analysis: OECD focuses on conducting research and analysis to provide member countries with data and insights to make informed policy decisions.
3. Global Issues: OECD aims to address global challenges such as climate change, inequality, and corruption through collaborative efforts, to make society better as a whole.
4. Sustainable Development and Better Living Standard: OECD tries to frame and implement policies that contribute to sustainable development and environmental protection. It also aims at improving the well-being and living standards of people of member countries through evidence-based policy recommendations.
Organisational Structure of OECD
1. Council: The Council is the highest body of OECD, which is entrusted to be the source of all the organisation’s acts. It is in charge of strategic planning and workflow. The European Commission and one person nominated from each member country make up the Council.
2. Subsidiary Bodies: The Council along with the subsidiary bodies make up the OECD bodies. Standing committees, special bodies, and substantive committees are the three types of committees in the OECD. The OECD has a total of 37, Level 1 committees. Many of them have subcommittees with titles like Level 2, Level 3, and sometimes Level 4.
3. Secretariat: The OECD Secretariat is responsible for carrying out the mandates as initiated by the council. It analyses the data, examines policy, and makes suggestions and views based on worldwide performance.
4 . Secretary General: The Secretary-General plays a crucial role in the decision-making process. The secretary-general is in charge of the organisation, leading the Secretariat, managing the budget, assisting all bodies, and representing them.
5. Committees: The committees are the third pillar of OECD’s structure. Over 250 committees comprised of over 40,000 international professionals from all over the world including member nations and non-member nations share information and ideas, and they keep track of policy areas.
Functions of OECD
1. Publishing Economic Data: The OECD is responsible for publishing economic reports, statistical databases, economic analyses, and forecasts on the outlook for economic growth worldwide.
2. Analysing Issues: The group analyses the impact of social issues on economic growth and also makes recommendations to foster economic growth globally.
3. Addressing Environmental Concerns: The group also takes into consideration the environmental concerns associated with economic development, which would help to create a sustainable future for upcoming generations.
4. Tackling Immoral Traits: The organisation endeavours to eliminate bribery and other forms of financial crimes which happens worldwide.
5. Monitoring Tax Havens: The OECD also maintains a “blacklist” of nations that are considered uncooperative tax havens in the world.
6. Reforms on Tax: OECD also places emphasis on tax avoidance by profitable corporations and in the G-20 countries and promotes tax reforms among themselves.
7. Monitors Member Nations Performance: OECD also requests a peer assessment of the member nation’s performance. The performance of each particular member country is monitored by the other OECD member nations.
Conclusion
Organisation for Economic Cooperation and Development (OECD) comprises 38 nations that form a multination forum to preserve peace and promote security, prosperity, and justice. OECD continues to play a significant role in raising economic efficiency and standard of living around the world. It is a platform for the governments of different countries to work together and find solutions to common problems. OECD has a strong organisational structure which strengthens the internal governance. OECD has a vision statement that is common for all member nations. OECD is contributing towards building international harmony.