A bridge too far for Cormann?

Dec 1, 2020

For the OECD, improved world health is as important an outcome as an improved world economy. Managing that, or contributing to that debate, is not, as with climate change action, Cormann’s long suit.

Credit – Wikipedia

Mathias Cormann is not the sort of leader, chief executive, or economic thinker that the Organisation for Economic Cooperation and Development and the world needs as we seek a post-coronavirus economic recovery. The ideas that Mattias Cormann represents are not the sort of ideas that Australia wants or needs one of the chief engine rooms of economic recovery to have.

His social and economic ideas are likely, if followed, to retard world growth, urgent adaptation to the challenge of climate change or imagination in developing new policies in health, social welfare, and education — destined to be the chief levers of future economic growth. And the idea that he has the cred to promote action on climate change or a green economy is tosh.

One must assume that the prime minister, Scott Morrison, is 100 percent committed to Cormann’s getting the job and that he will lose in prestige if, as is likely, he doesn’t. But it might not be the greatest personal blow Morrison has ever suffered. Cormann did not want Morrison, more or less a moderate, as prime minister. Indeed, had Cormann been able to count, Peter Dutton would probably have the job, gained on a different day.

It is not even true, as Dutton has suggested that getting Cormann up as Secretary General of the OECD would be a tremendous feather in the cap for Australia, or might somehow give Australia an additional friend at court at any time Australian interests needed a push along.

As Secretary General he would not be a delegate for Australia, and if he was seen to be, it would be in clear breach of his terms of employment as a voice for all of the advanced liberal economies represented in the OECD.

And anyone who thinks that prestige and credit flow automatically to the country of his origin should remember the departing secretary general, Angel Gurria. Gurria is very well regarded and his third term is about to end. He comes from Mexico, whose economic reputation or performance has not markedly improved.

It may be a conceit to regard Cormann as a front-runner, even before his credentials are submitted to close scrutiny. He has a very large campaign budget, something I would not begrudge if we had a good candidate or one with much chance. But Canada, Switzerland, Greece, the Czech Republic, Estonia, Denmark, Poland, the United States, and Sweden have also nominated candidates, most with impressive backgrounds. No lobbying by Cormann, or Morrison, has seen any withdraw.

Selection is a process of several stages, usually without any formal election. It begins with a beauty contest among each of the heads of national delegations to the OECD. These discuss the choices with their governments back home. Most of the candidates will have lobbied these as well as the diplomats in Paris. Then, in a somewhat Vatican style, the British Ambassador, as chair of the selection committee, will take confidential “soundings” among member countries to gauge broad support for individual candidates; he will be seeking to get a short-list of two or three.

Even then, it does not usually go to a formal vote. Cormann may never know whether any of the pledges, promises, or arm-twisting worked. Instead, the chair now attempts to seek a “consensus candidate”, around which most can agree, over which no great and powerful country, such as the US or Germany will try to exercise a practical veto. That might not be the person with the most support if he also has significant enemies; the winner might be everyone’s second-preferred candidate, with no real enemies.

The OECD does regular country reports, in which they compare economic and social performance with other member nations. But Cormann, if he wins, will have no influence over these. More significantly, the organisation monitors the economies of all of its members, and other nations such as China to make informed predictions of economic growth, and trade growth, overall, as well as in individual countries. It also analyses factors that affect its predictions. Right now, these might include the Covid-19 pandemic, the slow and asynchronous movements to social and economic recovery, the increasing threat from climate change, uncertain signals from China, the balls-up that Boris Johnson is making (with our help) in a Britain that has exited the European Union, and uncertainties about post-Trump America.

OECD members hold lots of conferences on all aspects of OECD activities, some at ministerial level and some at officer level. The thinking and experiences of members help inform economic, political, and social assessments of social and economic indicators published by the organisation.

 The collective of nations ultimately controls the organisation. But they do not act as a parliament settling OECD assessments. Were Cormann to be chosen, he would have a significant say in some OECD priority setting, and in representing and promoting the general views of the organisation. But not in preparing technical reports.

His economic background is not of a depth that it could challenge institutional views — unlike in Canberra, where his view as minister for finance prevailed over any views proffered by bureaucrats — simply because he was the minister. His political and organisational clout will depend rather more on his diplomatic, organisational and bureaucratic skills — as well as his adroitness in discerning the general will of member nations. He has shown some talent in negotiating with cross-bench senators available for rent, and in playing a masterful dead bat to any questioning. But his political and strategic skills are not so strong — and the “vision statement” he has produced in the OECD job is a first for him.

The OECD is about much more than making growth assessments or promoting the idea of freedom of trade and the operation of market forces rather than close government controls on the economy.

It is also an academy of good policy in almost every area of government. In agriculture and in agricultural trade. In aid and development policies. In education. In health care, whether out in the community or in hospitals. In research, and taking advantage of innovation and using modern technology and communications.

And in energy and the environment, including dealing with climate change — suddenly the subject on which Cormann, with his eye to OECD members, has great zeal, though he has been generally regarded as a denier, and certainly an opponent of real action, or cohesive Commonwealth policy. In general terms, indeed, Cormann is not policy-oriented, nor has he a reputation for breadth, or depth, of his political achievements.

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