Chile to Straddle Line Between Rich and Poor Nations

By Thalif Deen Reprint | | Print |

Thalif Deen

UNITED NATIONS, Aug 6 2010 (IPS) - The 130 developing countries at the United Nations remain divided over Chile’s decision to hold onto its seat in the Group of 77 (G77) – even after it formally joined the exclusive club of rich nations, the Organisation for Economic Cooperation and Development (OECD).

What was discussed in whispered tones has broken out into the open, with Latin American countries predictably standing in solidarity with Chile, while some of the African nations are challenging Chile’s right to continue its membership in the largest single coalition of developing nations.

After a fruitless debate, the G77 chair Ambassador Abdullah M. Alsaidi concluded there are no rules of procedure pertaining to dual membership in both the G77 and OECD – and there is no consensus among the 130 members of the G77 about Chile’s status.

The African countries that have expressed “concern” over Chile’s decision to retain its G77 membership include Nigeria and Tanzania.

Both countries have said there was a “need for detailed explanations” since Chile’s membership in the 30-member Paris-based OECD is not compatible with the interests of the G77.

“Sooner or later,” one African diplomat told IPS, “there is going to be a conflict of interest because we in the G77 have nothing in common with the OECD.”

At a meeting of the G77 last month, Chile had the backing of several Latin American and Caribbean countries, including Brazil, Ecuador, Peru, Colombia, Costa Rica, Barbados, Guatemala and Argentina.

Additionally, it also had the support of several non-Latin American countries, including Singapore and Morocco.

Chile has maintained there are no rules of procedure for membership in the G77, and more importantly, the OECD has not demanded that Chile quit the G77 as a condition for membership in the OECD.

Chile, which was formally inducted last May into the OECD, has also argued there is no conflict of interest in holding seats in both bodies.

But when Mexico and South Korea broke ranks from the developing world and joined the OECD back in 1994 and 1996 respectively, both countries voluntarily quit the G77.

On North-South economic issues at the United Nations, the G77 and the OECD hold diametrically opposite views – most or all of the time.

The OECD is home to some of the world’s major economic powers, including the United States, Britain, Germany, France and Japan. But most of the emerging economic powers, including Brazil, India, China, Indonesia and South Africa, are longstanding members of the G77 and not members of the OECD.

According to the OECD, it is planning to have discussions with all of these G77 countries “with a view to possible membership”.

Besides Mexico and South Korea, the G77 has lost four other members over the years: Cyprus and Malta (both in May 1994) and Romania (January 2007) when they joined the European Union.

A fourth country, Palau, a small island developing nation in the Pacific, withdrew from the G77 in June 2006, ostensibly for financial reasons.

According to an OECD statement, the invitation to Chile to become the organisation’s 31st member came at a time when the OECD is expanding its relations with the region.

As an OECD member, Chile will participate in all areas of the OECD’s work, from economic and financial policy to education, employment and social affairs.

The statement also said that during two years of accession negotiations, Chile was reviewed by some 20 OECD committees with respect to OECD instruments, standards and benchmarks.

The invitation to take up membership confirms that Chile is taking appropriate steps to reform its economy including in the areas of corporate governance, anti-corruption, and environmental protection, the OECD said.