Opinion | Why Indonesia shouldn’t rush to join the OECD ‘rich man’s club’
- Plans for an accelerated accession come as global concerns grow over the organisation’s transparency and fairness towards developing nations, particularly in its tax policies
Indonesia seems desperate to join the Organisation for Economic Cooperation and Development (OECD), regarded as a rich man’s club. President Joko Widodo is pushing for an accelerated process and announced in October that it would set up a national committee to do so.
Indonesia has been a key partner of the OECD since 2007 and is familiar with its workings. Still, its target of completing accession within four years is ambitious, when the process can take five to eight years. The last two members to join the OECD – Costa Rica in 2021 and Colombia in 2018 – took about five years each.
Besides Indonesia, six other countries are in accession discussions with the OECD, namely Argentina, Brazil, Bulgaria, Croatia, Peru and Romania. The OECD’s key partners include China, India and South Africa.
To join the OECD, major reforms are needed to align a country’s laws, policies and practices with OECD standards, particularly in the major areas of trade, finance and taxes.
Indonesia’s policy alignment has been going on for years, through a series of joint work programmes, the current, fourth, iteration of which covers 2022-2025. This latest work programme includes “priority areas” such as the sensitive arenas of tax policy and administration, as well as investment, education and skills, labour market policies, green growth and corporate governance.
