Israel steps up a league

The invitation to join the OECD comes entirely on merit.

Yesterday, the OECD Council of Ministers invited Israel and four other countries to open accession negotiations. The decision means that the world will now consider Israel as a de facto full member of this prestigious group of developed and industrialized nations.

This is another, very important, step in the journey Israel embarked on 14 years ago to join the OECD. That said, Israel of the mid-1990s is not the Israel of 2007. Back then, OECD membership was intended to help in the recognition of Israel’s standing in the world, and especially to attract foreign investment. Today, the step underscores the fact that Israel is a part of the developed side of the global economy.

The OECD announcement is a major achievement for Israel’s policymakers, especially the economic policymakers of the past 15 years. Two of the five countries invited to open talks - Estonia, and Slovenia - were invited to join the OECD by virtue of their membership in the EU. Russia is a great power that is hard to ignore, while Chile is, to an extent, an expansion of the OECD’s American contingent of the US, Canada, and Mexico.

Israel is a special and unique case among the five. It belongs to no bloc, it is not a great power, and was invited on the basis of its economic and development achievements.

The accession process will be accompanied by further examination of Israel, and will involve Israel ratifying various OECD conventions. The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions should be pointed out. OECD criteria will be adopted by Israel tax system, and extend to areas including domestic administration, human rights, level of competition, and universal education. In all these areas, Israel will have to meet the OECD’s exacting standards. All of them will be reflected in OECD statistics and reviews of its members.

At a fundamental level, Israel will be considered a developed country, which ought to further increase capital inflows. However, this factor will be less significant than before; Israel is already on the radar screens of many of the world’s analysts, and OECD membership will be more of a status symbol.

Nevertheless, the recognition now given to Israel will make it a member of an exclusive club that not everyone can join. Membership will also give Israel the right to join organizations that establish standards for business conduct and norms, which were hitherto denied it. In addition, Israel will be able to benefit from greater exposure for organizations and corporations operating on its territory, which will now be in the same league as their peers in developed countries.

Published by Globes [online], Israel business news - www.globes.co.il - on May 17, 2007

© Copyright of Globes Publisher Itonut (1983) Ltd. 2007

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