Five politicians and financiers jostle for position in OECD race

The race to become the next head of the OECD has narrowed to five candidates, who are battling to take charge of an international organisation which in recent years has sought to play a leading role on tax, inequality and macroeconomic policies.

Under the leadership of Angel Gurría, secretary-general for the past 15 years, the Paris-based club of rich nations has raised its profile, seeking to define its role as creating “better policies for better lives”.

The choice of new leadership by its 37 member states will determine whether the organisation continues to try to shape the global agenda or retreat towards its founding status as a technocratic think-tank.

The OECD turns 60 this year, having been formed out of the Organisation of European Economic Cooperation, which was set up after the second world war to help distribute Marshall Aid money.

With a slowly expanding membership of wealthy democracies, it has little hard power but is influential with its use of soft power in a wide range of areas. These include seeking to resolve global differences over taxing multinationals, fighting tax evasion, producing corporate governance codes, highlighting successes and failures in education and monitoring the quantity and quality of foreign aid.

Its statistics are highly regarded, using the highest quality of international comparison so that countries can benchmark their progress.

But not all member states are happy when the OECD is in the limelight.

National leaders bridle at the secretary-general’s equal status at G20 summit photos and worry that the organisation — which has recently spoken out strongly against austerity and the harm to economic growth from rising inequality — has departed too far from its core mission of increasing growth rates and raising productivity.

In the past 15 years of energetic top-down management by Mr Gurría, the OECD has embraced advocacy as a defining role. Previously known as a think-tank, Mr Gurría has set about changing this, complaining that the phrase “turns my liver to foie gras”. He said the organisation “likes to think of ourselves as a do-tank”.

From an initial 10 nominated candidates, the opaque selection process, run by UK ambassador to the OECD, Christopher Sharrock, has narrowed the field to five after half withdrew following “consultations” among the membership.

The US candidate Christopher Liddell, a nominee of the Trump administration, withdrew on the day Joe Biden was inaugurated.

With US support up for grabs, the leading candidates have pursued a diplomatic line, praising the organisation’s role and calling for global co-operation in difficult subjects such as the taxation of multinationals and stronger, cleaner and fairer growth.

Cecilia Malmström, the Swedish former European trade commissioner, has been one of the frontrunners since her nomination last year and is popular among OECD staffers. She has campaigned on using the role to forge compromise globally in contentious areas of policy.

“You need to listen to everybody whether they are small [countries] or big,” she said of her time in the commission.

Statements such as these signal that her OECD would not be as pugilistic as it has been at times under Mr Gurría.

But unlike many selections for international positions, such as the head of the IMF, Europe has not unified behind one candidate — even though a European has not run the OECD since 1996. And her support in Washington cannot be assumed, given that she had to play tough over digital taxes and US tariffs during her stint as trade commissioner.

Switzerland’s Philipp Hildebrand is a non-EU frontrunner, having served as head of the country’s central bank.

He is now vice-chairman of BlackRock, the investment management giant, where he was close to Brian Deese, who has recently been appointed as director of Mr Biden’s National Economic Council.

Mr Hildebrand’s candidacy has focused on priorities such as achieving a “fair transition” to net zero climate policies, working to address social inequalities and international co-operation.

But his resignation from the SNB after his then-wife’s controversial currency trades in 2011 could be a stumbling block. Insiders say some officials are “very disturbed” at his candidacy, given the OECD’s role in corporate governance and ethical capitalism.

Mathias Cormann, Australia’s former finance minister, has been flying around the world on the nation’s military jets to promote his candidacy.

He is the most senior national politician still in the race although he has an international hinterland, having emigrated to Australia from Belgium in the 1990s.

In an interview with the Atlantic Council, he said he was uniquely qualified to take on the position as a result of “my European background and my Asia Pacific networks”. He has distanced himself from his former Australian Liberal party’s climate scepticism, although this remains a challenge to his application.

The other two candidates still in the race — Anna Diamantopoulou from Greece and Ulrik V Knudsen from Denmark — are not seen as front-runners, but might emerge as compromise candidates.

Source: Economy - ft.com