שנת 2023 מציינת את יום השנה ה-75 להקמת ה-OECD ולעצמאותה של ישראל. משלחת משרד הכלכלה והתעשייה ל-OECD מתרגשת לציין את שני אירועים משמעותיים אלו. לכבוד חגיגה כפולה זו, ז’ופיה בורסי ממשלחתנו צוללת להיסטוריה של ה-OECD ותהליך הצטרפותה של ישראל לארגון.

75 years of the OECD and Israel-

2023 marks the 75^th anniversary of both the OECD’s creation and of Israel’s Independence. Needless to say, in the Israeli Economic Mission to the OECD, both events are close to our hearts. To celebrate this parallel, let’s take a closer look at the history of the OECD and Israel’s accession to the organisation.

OECD: the founding years

The OECD’s precursor, the Organisation for European Economic Co-operation (OEEC) was created in 1948 with the goal to bring together 18 countries in Western Europe in the rebuilding of Europe following the devastation of the Second World War.

It all began with US Secretary of State George Marshall’s idea: Europe needed substantial economic and technical assistance to recover from the destruction. Spearheading an unprecedented economic reconstruction and recovery effort, the Marshall Plan – officially the European Recovery Programme – laid the foundations for lasting peace and co-operation in Europe. A new organisation was needed to administer the Plan.

On 16 April 1948, the OEEC was born.

Within months of its creation, the OEEC, composed of 18 members, was in operation and Marshall Plan aid was allocated to countries that had just recently been at war. Contingent on member countries’ willingness to work together, the aid encouraged countries to look beyond the nation state – and to focus on areas of mutual interest.

The extraordinary rebuilding effort put Europe’s economy back on its feet in record time. The Marshall Plan aid ended – but the seed had been planted. Countries continued to work in partnership to share insights and best practices, to strive towards shared interests, and membership expanded to include Canada, the United States and Japan. The Convention transforming the OEEC into a new organisation was signed at the Château de la Muette in Paris on 14 December 1960. It was the beginning of a new era: the Organisation for Economic Co-operation and Development came into being on 30 September 1961.

Over the next 60 years, the OECD’s membership would grow to 38, including countries from Latin America, Asia and the Pacific, fulfilling its mission of supporting countries to find common solutions to common challenges. Through international co-operation and shared values, the OECD’s goal has been to drive forward better policies for better lives – building on the legacy of the OEEC, whose founding principles remain more relevant than ever.

(Source: OECD)

Israel’s role in the OECD – then and today

While Israel became independent in 1948, it had to wait a “little” longer to join the OECD. Firstly, because the OECD started out as a uniquely Western European organization; secondly, because Israel was a brand-new state that first had to establish itself as a prospering and stable economy before being able to join the “club” of the most developed countries.

Fast forward to May 2007, Israel started its accession discussions to the OECD, in the same year as Chile, Estonia, the Russian Federation[1] and Slovenia. The accession consisted of an in-depth examination and dialogue process that included key components for carrying out the accession process known as the “Road Map”.

In April 2008, Israel submitted an ‘initial memorandum’ to the organization’s Secretary-General. This document showed the extent to which Israel accepts the legal obligations deriving from the essential “legal tools” and other relevant tools. A total of 230 legal documents submitted by Israel were reviewed by 18 OECD committees. These reviews assessed the country’s position on OECD legal instruments and the degree of coherence of policies with those of OECD member countries.

After the detailed review process, Israel signed the Convention founding the OECD on 7 September 2010, thereby pledging its full dedication to achieving the OECD’s fundamental aims.

Since joining in 2010, Israel has both actively shaped and benefited from the OECD’s work. The OECD has been providing in-depth analysis of Israel’s policies and formulating policy recommendations to further develop its economy in a sustainable and inclusive manner. Some of the highlights of the past 13 years of being an OECD member were:

• In 2013, former Israeli Prime Minister and President Shimon Peres visited the OECD Headquarters in Paris. During this visit, he had a bilateral meeting with Angel Gurría, former Secretary-General of the OECD and delivered a keynote address to a wide audience of Ambassadors, business and civil society leaders, academics and OECD staff.
• In 2014, Israel established its Responsible Business Conduct Unit under the Foreign Trade Administration of the Ministry of Economy and Industry, and created its National Contact Point (NCP), the non-judicial grievance mechanism of the OECD to handle cases of non-compliance with the OECD Guidelines.
• In the same year, the Skills Beyond School Review of Israel was published, assessing vocational training opportunities in Israel.
• In 2015, Israel became the 91^st jurisdiction to join the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. To this date 147 jurisdictions currently participate in the Convention, representing a wide range of countries including all G20 countries, all BRIICS, all OECD countries, major financial centres and an increasing number of developing countries.
• In the same year, the OECD launched the Employment and Skills Strategies in Israel report, to help disadvantaged groups access labour market opportunities and to deliver more sustainable and inclusive growth.
• In 2016, former Secretary-General Angel Gurría received the Ben Gurion Leadership Award Israel, the award of the Ben Gurion University that “honors forward-looking visionaries who not only possess vision but work to make their vision a reality”.
• In the same year, the OECD launched several reports related to Israel, such as the Measuring and Assessing Well-being in Israel report, and its SME and Entrepreneurship Policy in Israel The latter concludes that Israel has excellent framework conditions and programmes for technology-based start-ups and SMEs in areas such as R&D, high-level skills generation and venture capital finance. These strengths need to be maintained. At the same time, more needs to be done to spread success to all types of SMEs and all groups of the Israeli population.
• In 2018, Israel started the peer review process of its mutual agreement procedure (MAP), included in Article 25 of the OECD Model Tax Convention and commits countries to endeavour to resolve disputes related to the interpretation and application of tax treaties.
• In 2020, the OECD released its Accelerating Climate Action in Israel report, which looks at the actions necessary in the near and medium term to reduce Israel’s GHG emissions in three sectors– electricity, residential and transport, for which specific policy recommendations are developed.
• In 2021, an OECD report is released examining the Public Sector Pay System in Israel in-depth.
• In 2022, the OECD Going Digital Toolkit, which helps countries asses their digital development was translated and launched in Hebrew, making digital assessment easier and more accessible as well as being the first non-OECD official language translation of the site.
• In April 2023, the latest edition of the Economic Survey of Israel was released, which among others, finds that the Israeli economy has rebounded strongly from the COVID-19 pandemic and has proven resilient to the repercussions of Russia’s war of aggression against Ukraine. The Economic Survey is the OECD’s most significant periodic review instruments to assess a wide range of economic aspects in member countries.
• And the future– We have some exciting plans for the rest of 2023, which we hope to share soon

For the next 75 years and beyond, we wish to continue our active role within and fruitful cooperation with the OECD, and to continue building a resilient, prosperous and fair national economy with its assistance.  Follow us to hear more about news and developments at the OECD

List of references

• 75th anniversary of the creation of the OEEC (OECD)
• Israel and the OECD (OECD)
• Ministry of Economy and Industry Activities in the OECD (Ministry of Economy and Industry)

[1] Further to a meeting of the OECD Council on 25 February 2022, activities related to the accession process of the Russian Federation have been terminated.