President Michel Temer is making changes to Brazil’s economic policies, including cozying up to developed nations. Unlike former Presidents Lula and Rousseff, whose administrations each emphasized economic relationships with neighboring emerging economies, Temer plans to steer Brazil in a different direction. He is looking to improve Brazil’s economic future by embracing trade with some of the world’s most powerful economies. The move is why some economists speculate that Brazil is planning to join the Organization for Economic Co-operation and Development (OECD), an economic advisory think tank based in Paris.
The membership process with the OECD is known to take years. Colombia, for example, has been in the process of becoming a member since 2013. But the Secretary-General of the OECD, Angel Gurría, has confirmed the possibility of speeding up the membership process to accommodate several key global players such as China, South Africa, India, Indonesia, and Brazil.
Though unpopular with Brazilians, President Temer’s austerity policies are seen as attempts to woo foreign investors with the promise of a more stable economy that favors international trade. Temer has also concentrated efforts on lessening Brazil’s bureaucracy by helping to facilitate the process for foreigners wishing to establish businesses in Brazil.
But Brazil’s famous bureaucracy may just be the stumbling block that makes it difficult for it to join the OECD. The OECD imposes strict standards for transparency and sets specific tax regulation guidelines that rub against the grain of Brazil’s traditionally closed economy and labyrinthine tax policies. If Brazil is accepted to the OECD, however, it will be the largest developing economy to gain membership and the third Latin American country after Mexico and Chile.
Brazil has been involved with the OECD for several years through its “Enhanced Engagement” program. The program was developed by the OECD in recognition of the shifting economic landscape that pushes developing economies more and more toward the center of global economic policy and progress.
In 2007, as Brazil was establishing itself as a modern economic powerhouse, there was talk of it becoming a full member. This also sparked speculation of Brazil pulling out of the G77, a move that would remove it from a key position of influence over the South American continent. However, this time around, the idea of joining the OECD is with the aim of increasing Brazil’s economic reach and strengthening its trade ties rather than abandoning its relations with neighboring countries.
Over the next couple of weeks, a more concrete decision over Brazil’s OECD membership push should be revealed.