What is the OECD?
The organization for economic cooperation and development (OECD) (Organisation for Economic Co-operation and Development, OECD) is an international organization of developed countries that accept the principles of representative democracy and a free market economy.
The headquarters of the OECD is located in Paris, but the leading role it has traditionally played in the USA. Washington is a major sponsor of the club (membership fee provides 25% of the total 200-million budget OECD) and one of its founders.
Who are the members of OECD?
Currently the OECD includes 34 countries, which together account for 80% of the global economy. The OECD includes most countries-EU members, and the governing Council delegated the representative of the European Commission.
What is the OECD?
Unlike the world Bank and the International monetary Fund the OECD is not engaged in the distribution of funds. Its ideological tenets — promoting the principles of democracy and market economy, fighting corruption and tax evasion.
The organization describes itself as "a forum to generate new ideas based on research and discussion with the aim of assisting national governments".
What the OECD actually?
The OECD is considered to be a financial ally of NATO. At the time the organization was created to coordinate financial assistance to a war-torn Europe.
The advantage of the OECD is the strongest team of experts, which publishes hundreds of analytical studies and makes recommendations to member countries. For example, the recent report on the problems of education in Estonia (Estonia belongs to the OECD since 2010), elaborates on the possibilities for receiving education in Russian and Estonian schools. The experts say that children's rights are not equal, because the pupils of the Russian schools spend more money on private lessons. In addition, due to the language barrier they are more likely to choose vocational school offering training programs in Russian. To solve the OECD experts recommend that the Estonian government should ensure "the payment of additional direct income support to local authorities to support education in an ordinary school for children with special educational needs, as well as additional lessons of Estonian language for Russian speaking students".
A significant proportion of the work of the OECD related to combating money laundering, tax evasion, corruption and bribery. When, for example, were developed various mechanisms to end the practice of creating so-called "tax havens".
Recent high-profile events in the Latvian financial and banking sector — namely, the elimination of Trasta Komercbanka, million fine for Baltic International Bank, HR cleaning in SRS, the change of leadership in market Commission financial and capital, and legislative expansion of the number of persons who can follow the Bureau on fight against corruption — according to unofficial information, are including part of the preparatory process to obtain a "club card" OECD.
Why Latvia wants to join the OECD?
Official version: the entry into the prestigious club of Latvia will bring significant economic benefits, including improve its credit rating, which, in turn, affects the interest rates at which government and businesses can obtain financing and reduce the cost of servicing the national debt.
Membership in the OECD is compared with a certain mark of quality of the state's economy: the organization includes such major players in world politics as the USA, Japan, Germany, France. However, the OECD presented and poor countries undergoing severe crises (Greece, Mexico), and so the assertion about the advertised brand of the organization, many experts believe far-fetched.
When this might happen?
Latvia wants to join the OECD for almost 20 years — its application together with Lithuania, Estonia and Russia it filed in 1996. Then the OECD responded to all failure. Later, in 2010, the prestigious club let the Estonians. Russia called for negotiations in 2007, but in 2014 they were stopped after the events in Crimea. For Latvia the green light loomed only in 2013, when was approved a roadmap for negotiations.
To get closer to the coveted "club jacket", Latvia was required to obtain a positive opinion of 21 Committee of the OECD. In April 2016 was received the last necessary positive feedback, which means the completion of technical negotiations on accession to this organization.
Final discussion of the OECD Council on the adoption of Latvia is expected in may. The favorable outcome of the Treaty of accession can be signed at the Ministerial meeting of the organization at the beginning of June.
How much is it worth?
During the negotiation process in 2016 Latvia will contribute to the OECD 1.3 million euros. Permanent participation in the organization, it is estimated, will cost the taxpayers about 3 million euros per year.
What would happen if Latvia did not fall into the OECD?
Participation in the OECD does not guarantee economic growth. Latvian officials will certainly have the opportunity to actively travel the world to attend various conferences and seminars, but heard there won't be considered as leadership in action. The OECD has no right to impose on members recommendations.
However, at this stage of the negotiations in the interests of Latvia they still to finish. Another denial of membership ticket will be negatively interpreted in the investment market.
Can I come out from the OECD?
History does not know such precedents. But participation in the organization is voluntary. While countries must comply with several obligations, including paying membership fees and to follow the ideological precepts of the organization.
The OECD annually is the so-called "black list", which consist of countries, pursuing a policy of unfair tax competition. One of the main evaluation criteria is the willingness of countries to share information on any tax issues, regardless of the provisions of national tax legislation on protection of private information or Bank secrecy for tax purposes. States refusing the adoption of international tax standards may apply economic sanctions.
Officially it is considered that any offshore member state of the OECD. However, in 2009 the organization as a punishment for failure to comply with General standards of the tax included in the intermediate "gray" registry three years club members — Belgium, Luxembourg and Switzerland. Belgium and Switzerland under pressure quickly eliminated the defects, Luxembourg decided to assert their right to partial tax autonomy, which ultimately paid the entire European Union. As you know, in 2014 around the tax system of the Duchy broke a major scandal that has made the EU to tighten the screws in the pan-European legislation.
The Minister of foreign Affairs Edgar Rinkevich, by the way, in 2013 warned that after joining the OECD, Latvia will need to make corrections and clarifications to certain laws, but "it will not be as comprehensive a process as joining the EU".