Kremlin seeking for rapprochement with OECD

Kremlin seeking for rapprochement with OECD

The Russian government is interested in reviving links with the Organisation for Economic Co-operation and Development (OECD), whose members and key partners account for about 80% of world trade and investment. The westward turn is aimed to improve the business climate and attract investors, experts consider.

Russia’s new prime minister has ordered his government to revive the country’s ties with the OECD in a bid to reopen links with Western institutions, says Bloomberg. According to three unnamed sources, Mikhail Mishustin instructed his subordinates to draft a plan to rebuild links to the Paris-based organisation, possibly even restarting Russia’s efforts to join the OECD, which were put on hold after the West imposed sanctions against the country in 2014.

According to the Ministry of Economy, Russia will continue deepening cooperation with the OECD as well as other major multilateral bodies. “Since it wasn’t Russia that suspended the accession process but the OECD itself and its members, the issue of restarting talks isn’t up to us. We haven’t received any such signals from the OECD,” the ministry pointed out.

As head of Russia’s Federal Tax Service, Mishustin worked closely with the OECD and won praise from the group for his successful drive to computerise the institution. He is also considered to have good personal relations with Secretary-General of the OECD José Ángel Gurría. Nonetheless, the prime minister’s push isn’t likely to yield considerable results soon, believes Ivan Timofeyev, a sanctions specialist of the Russian International Affairs Council, adding that the Western countries who dominate the OECD are not ready to change their position yet.

OECD members and key partners account for about 80% of world trade and investment. Photo: St.Krekeler

At the same time, Moscow’s move to restore ties indicates the new government’s desire to reach out to the West and improve the business climate, as the Kremlin has recognised that Russia’s pivot away from the West since the imposition of sanctions has taken it too far towards China, a Russian official said.

The OECD’s press office said that restarting the accession bid would require a decision by consensus among all 36 members of the group. While Russia already participates in more than two dozen OECD bodies, restarting ties broadly will be a sign of a much closer relationship, says Bloomberg. The country may at least join other big emerging markets like China, India and Brazil as a “key partner” of the OECD.

Joining the group will require Russia to take on a number of obligations to improve state and corporate governance, disclosure and tax policies and reduce corruption that will amount to a “substantial positive signal for investors and entrepreneurs,” considers former Chief Economist at the European Bank for Reconstruction and Development Sergey Guriyev.

By Anna Litvina