OECD

Biz@India

June 2015

Through strengthening its relationship with the OECD that significantly addresses human progress issues, India can put forward its soft power targets and increase its influence and visibility.

The Organisation for Economic Cooperation and Development (OECD) and India have developed stronger ties in the last decade and are willing to reinforce them even more. It is not a coincidence that their separate strategies and agenda match. They have a mutual interest towards building up their soft power, their capacity of influence and attraction, on the world stage.

American political scientist Joseph Nye distinguishes between “hard power”, the ability to impose one’s views and interests, through military or financial power for instance, and “soft power”, the capacity to make those interests prevail through influence, persuasion or positive image, as a country or a nation.

The OECD, founded in 1961 during the Cold War to stimulate economic growth and trade, has been eager to reinvent itself in the last decades, confronted with economic crisis and a new emerging world. It aims at expanding and shifting from a “rich nations’ club” to a global forum.

Artists such as Kathak dancer Birju Maharaj are ambassadors of Indian cultural heritage

In that respect, the 34-country body (USA, Canada, Mexico, Chile, South Korea, Japan, New-Zealand, Australia, Turkey, Israel and most of the European countries) has already broadened its membership and has pending accession discussions with Russia. In 2007, it strengthened its cooperation with India, Brazil, China, Indonesia and South Africa through a program of enhanced engagement and via the OECD Global Relations secretariat.

India is part of this process, with a yearly OECD economic survey and a status of member of the Governing Board of the OECD’s Development Centre. India also participates as an observer in some OECD Committees and several working groups, in areas including steel, trade, investment, development and policies for small and medium-sized enterprises.

The Paris-based organisation has another goal that suits India well. It aims now at studying and promoting human progress in general and not only Gross Domestic Product (GDP)- oriented policies. Its slogan “better policies for better lives” reflects this ambitious target. The idea is to stand as a global forum of influence on three complementary pillars – economic growth, social cohesion and environmental respect.

Drive against financial corruption and optimisation

The OECD has already become more influential in areas related to human progress. It is a trend setter in two major dossiers: anticorruption and human capital development.

The organisation has urged for a better international coordination against financial corruption and tax evasion. In October 2014, all OECD and G20 countries like India signed a “multilateral competent authority agreement” activating the automatic sharing of financial data for tax purposes. This drive, initiated many years ago by OECD tax transparency experts such as Pascal Saint-Amans, bore concrete fruits, even if it is by definition an ongoing an always incomplete process. Listings regarding tax evasion, like in the HSBC case, are now high on the news agenda all over the world. The OECD aims now at harmonising the taxes paid by companies on the international level, in order to reduce tax optimisation mechanisms used notably by multinational companies. The aim is to fill up countries coffers, allowing them to spend more, for instance, on infrastructure or development.

Regarding human development, the OECD has put forward several indicators, now part of the global competition to develop and attract the best human capital. For example, its PISA (Program for International Student Assessment) study allows educational performances to be assessed and compared on an international basis. PISA has an impact on educational policies and some countries use their good ranking as a “soft power” and a positive image tool.

In that context of a reshaping OECD around a soft-power global forum, India would benefit a closer association with it. India can promote its own agenda, via three soft power channels: its cultural industry and artists, its value system and its human capital and diaspora.

India’s cultural industries and artists already play a role in the country’s influence and positive image abroad. Many African fans of Indian films or of Shah Rukh Khan know few words of Hindi and connect to India, even if they don’t have any Indian cultural centre nearby. Similarly, artists such as composer Pandit Ravishankar, painter S H Raza or Kathak dancer Pandit Birju Maharaj are ambassadors of the country’s heritage. Then, there are other artists who mix traditional Indian music with contemporary aspects, such as jazz, which makes them even more popular on the international stage.

From yoga to frugal innovation

The other channel of soft power is India’s value system, influential in areas such as philosophy and well-being. Prime Minister Narendra Modi’s push for yoga in the United Nations led the UN general assembly to approve by consensus a resolution establishing June 21 as International Day of Yoga. In a typical soft power angle, ranging from medicine to peaceful relationships, UN Secretary- General Ban Ki-moon said, “Yoga can contribute to resilience against non-communicable diseases. Yoga can bring communities together in an inclusive manner that generates respect”.

(above) Prime Minister Narendra Modi pushed the UN to establish June 21 as International Yoga Day (below) Renault Kwid car launched in May is an example of “engineering jugaad”

The influence through the value system can tackle many other aspects, such as innovation. “Jugaad innovation” and “Frugal innovation” are for instance world bestsellers written by Indian specialists and scholars. They study how India developed highly innovative business models, often from a limited resource base, and how these were sometimes adopted latter in western countries. Carlos Ghosn, CEO of Nissan and Renault, emphasised that he admires this “engineering Jugaad”, at the launch of the small Renault Kwid car in May 2015 in Chennai. This entry-level hatchback is conceived and produced specifically and economically in India, but with international ambitions.

The third notable path of India’s soft power, its human capital and the power of the diaspora, encompasses the two previous ones. The dozens of millions of members of the so-called “planet India” (Nonresident Indians, Persons of Indian Origin) build up an already huge network, on the business, academic, family and personal levels.

A platform such as the OECD is one of the right places to develop these channels of influence. India can use this forum that focusses on the human capital significantly, to have a better say on the way its own image is shaped: less GDP or quantitative criteria and a more qualitative and human capital approach. The more India is associates with the OECD, the greater will be its influence on its agenda and recommendations.