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Chile Threatens to Split South Unity in World Body

Thalif Deen

UNITED NATIONS, Jul 7 2010 (IPS) - The Group of 77 (G77) has historically maintained a united front, vociferously protecting the economic interests of developing countries at the United Nations.

But its longstanding solidarity is now being threatened by the continued presence of a single Latin American country which recently joined the ranks of a rich elitist group.

Chile, which was formally inducted last May into the 30- member Organisation for Economic Cooperation and Development (OECD), described as an exclusive club of industrial nations, has given no indications of leaving the G77, thereby triggering a sharp division of opinion among its 130 members.

“Chile wants to have it both ways,” one G77 member told IPS, speaking on condition of anonymity. “It wants to have one foot in the OECD and another in the G77. But this is unacceptable to some of us.”

When Mexico and South Korea broke ranks with the developing world and joined the Paris-based OECD back in 1994 and 1996, respectively, both countries quit the G77, the largest single coalition of developing countries at the United Nations.

Chakravarti Raghavan, editor emeritus of the Geneva-based South-North Development Monitor published by the Third World Network, told IPS if Chile does not voluntarily quit the G77, the group must find a way around its longstanding convention of consensus decisions, and “politely but firmly throw Chile out”.

“This will be in line with the spirit and the intentions behind the formation of the Group of 77 and its functioning over all these years,” he added.

“It is probably about time that the G77 being an informal grouping expel Chile – on the simple ground that you can’t belong to two different groupings,” said Raghavan, who is considered a foremost authority on the G77, and who has written extensively about the Group since its inception in June 1964.

“It is my impression that Mexico, when it joined OECD, initially wanted to be in both camps, but was told it was not possible,” he added.

On North-South economic issues at the United Nations, the G77 and the OECD hold diametrically opposite views – most or all of the time.

The OECD is home to some of the world’s major economic powers, including the United States, Britain, Germany, France and Japan. Most of the emerging economic powers, including Brazil, India, China and South Africa, are longstanding members of the G77 and not members of the OECD.

But according to the OECD, it is planning to have discussions with Brazil, China, India, Indonesia and South Africa – all active members of the G77 – “with a view to possible membership”.

The G77 has lost four other members over the years: Cyprus and Malta (both in May 1994) and Romania (January 2007) when they joined the European Union.

A fourth country, Palau, a small island developing nation in the Pacific, withdrew from the G77 in June 2006, ostensibly for financial reasons.

Besides Chile, Mexico and South Korea, the OECD has also added three other non-G77 members into its ranks: Estonia, Slovenia and Israel.

Speaking off-the-record, a diplomat from a G77 country expressed a dissenting point of view when he told IPS: “There is nothing in the G77 rules or guidelines stating that an OECD member has to quit the G77.”

He said Chile is well within its rights to remain a member of the G77.

“And, while there may be a few in G77 who may not be pleased about Chile remaining in the G77, there are no serious moves afoot to push them out of the grouping,” he said. “Most of us, support Chile remaining in the G77. There will be strong resistance from a number of us if anyone tries to eject Chile from the G77.”

And as an after-thought, he added: “The OECD had made leaving the G77 a condition for Mexico’s entry into the OECD. However, when Chile was applying to the OECD, there was no such condition.”

Moreover, he said, Mexico stated that leaving the G77 should not be a condition for Chile’s entry.

Another G77 delegate told IPS that if Chile does not voluntarily leave the Group, as Mexico and South Korea did in previous years, a divided G77 may be forced to take a decision either way.

Meanwhile the former G8 – the United States, Britain, France, Germany, Italy, Japan, Canada and Russia – has been expanded into the G20 to include seven developing nations (besides Australia, Mexico, South Korea, Turkey and the European Union).

The seven developing countries – Argentina, Brazil, China, India, Indonesia, Saudi Arabia and South Africa – are still members of the G77.

Chile has argued that G77 members that belong to the G20 should be considered in the same light as G77 members belonging to the OECD. But the G20 is not considered a formal body like the OECD, which is treaty-based and whose decisions are binding on all its members.

According to an OECD statement, the invitation to Chile to become the Organisation’s 31st member came at a time when the OECD is expanding its relations with the region.

As an OECD member, Chile will participate in all areas of the OECD’s work, from economic and financial policy to education, employment and social affairs. It will also join with other OECD countries to share experiences and best practices, setting new standards and developing new governance mechanisms for its economy and society more broadly.

The statement said that during two years of accession negotiations, Chile was reviewed by some 20 OECD committees with respect to OECD instruments, standards and benchmarks.

The invitation to take up membership confirms that Chile is taking appropriate steps to reform its economy including in the areas of corporate governance, anti-corruption, and environmental protection, the statement said.