OECD and Japan

Kumiharu Shigehara
Deputy Secretary-General, OECD

Look Japan, September 1997

What the OECD involves....

There are many sobriquets for the Organisation for Economic Co-operation and Development (OECD). It has been called a think tank, monitoring agency, rich man's club, an academic university, a talking shop. It has elements of all, but none is a complete characterisation of the OECD.
The OECD is a club of like-minded countries. It currently assembles 29 countries and is rich, in that Member countries produce two-thirds of the world's goods and services, but it is not an exclusive club. Essentially, membership is limited only by a country's commitment to a market economy and a pluralistic democracy.

The OECD offers governments the chance to talk to each other about economic and social policy. They compare experiences, seek answers to common policy problems and work to co-ordinate domestic policies that increasingly in today's globalised world must form a web of even practice across nations. Their exchanges may lead to agreements to act in a formal way -- for example, by establishing legally-binding codes for free flow of capital and services. But more often, their discussion makes for better informed work within their own governments on the spectrum of public policy and clarifies the impact of national policies on the international community. And it offers a chance to reflect and exchange perspectives with other countries similar to their own.


The structure for member countries to meet and exchange information is based on committees. Committees bring together representatives of member countries, either from national administrations or from the Paris delegations (or embassies) to the OECD, or both. The overriding committee is the Council, which has the decision-making power. The Council meets regularly at the level of ambassadors to the OECD to give general guidance to the Organisation and its work. The Council meets at ministerial level once a year, when foreign, finance and other ministers from member countries raise -- and give public prominence to -- important issues and set priorities for OECD work over the coming year.

Specialised committees meet to advance ideas and review progress in more tightly defined areas of policy -- such as macroeconomic management, trade, investment, social affairs, development assistance. There are about 200 committees, working groups and technical sub-groups. Some 20,000 experts, generally senior policy-makers from national administrations, come to OECD committee meetings each year to request, review and contribute to work that is undertaken by the OECD Secretariat.


The 2,000 staff of the OECD Secretariat in Paris work directly or indirectly to support the activities of committees. About 700 economists, Iawyers and other professional staff, mainly based in a ozen substantive directorates, provide research and analysis.

The biggest and perhaps most widely known part of the OECD Secretariat, the Economics Department, which I headed until my recent appointment to Deputy Secretary-General, monitors and analyses macroeconomic issues and structural or microeconomic matters. Twice each year, in June and December, it publishes the Economic Outlook, assessing trends of the past year or so and projecting economic progress for the coming two years . There is permanent monitoring of the economy of each member country and an increasing number of non-member countries, with the publication of an Economic Survey of each about once a year. One part of the Economics Department deals with cross-country macroeconomic and structural issues, such as balance of payments and foreign trade, workings of the international monetary system, the economy-wide impact of policy instruments in areas such as agriculture, industry, energy, the environment, regional development, Iabour markets and fiscal policy. Analytical work in this area is show-cased in Economic Studies twice a year.

The Secretariat has two official languages: English and French. Staff members are citizens of OECD member countries but serve as international civil servants with no national affiliation during their OECD posting. There is no quota system for national representation; there is simply a policy of employing men and women with a cross-section of experience and nationalities. Japan's share at the professional staff level is currently about 6 per cent, whereas Japan's contribution to the OECD budget amounts to about 24 per cent, the largest next to the US contribution of 25 per cent.

Evolving roles of the OECD and Japan

The progenitor of the OECD was the Organisation for European Economic Co-operation, which was formed to administer American and Canadian aid under the Marshall Plan for reconstruction of Europe after World War II. Since it took over from the OEEC in 1961 (Japan joined the OECD in 1964), the OECD vocation has been to build strong economies in its member countries, improve efficiency, hone market systems, expand free trade and contribute to development in industrialised as well as developing countries.

After more than 30 years, the OECD is moving beyond a focus on its own countries and is setting its analytical sights on those counuies -- today nearly the whole world -- that embrace the market economy. The Organisation is, for example, putting the benefit of its post-war hindsight to the service of emerging market economies, particularly in the countries that are making their transition from communist to capitalist systems. And it is engaging in increasingly detailed policy dialogue with dynamic economies in Asia, Latin America and elsewhere.
As the second largest economic power, Japan plays a key role in OECD activities for the benefit of member countries . Moreover, given its outstanding experience in transforming and upgrading the economy successfully in the post-war period, Japan has a lot to offer in advising non-member countries through the OECD process of dialogue with them.