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Vietnam Seeks Early Accession to the OECD
Vietnam seeks to join the Organization for Economic Cooperation and Development (OECD) to better align its competition, investment, and tax policies with international best practices and governance standards and boost investor appeal. With Thailand and Indonesia currently competing to become the first Southeast Asian member of the OECD, Vietnam’s aspirations highlight the ASEAN region’s remarkable growth trajectory.
On January 22, the Vietnam’s Prime Minister Pham Minh Chinh met briefly with OECD Secretary-General Mathias Cormann on the sidelines of the 55th Annual Meeting of the World Economic Forum (WEF) in Davos, Switzerland.
Vietnam’s bid to be an OECD member
In their discussion, PM Chinh emphasized that the two Southeast Asia Ministerial Conferences held in Hanoi helped strengthen the ties between the OECD and the region.
Sharing Vietnam’s strategic development goals, he stated that, after 40 years of the Doi Moi policy, 2025 will usher in a new era to transform Vietnam into a prosperous and developed nation by 2045.
To bolster collaboration between Vietnam and the OECD, PM Chinh urged Secretary-General Cormann to direct the organization’s specialized committees to share their expertise, provide policy guidance, and assist Vietnam in enhancing its competitiveness in line with OECD global governance standards. Additionally, he called on the OECD to help Vietnam prepare and publish key economic reports that will be vital references for long-term policy development.
PM Chinh proposed that the OECD consider Vietnam’s early accession to the organization and facilitate the inclusion of Vietnamese professionals within its Secretariat. He guaranteed that Vietnam would comply with all required procedures, standards, and conditions for membership as part of its strategy to deepen global economic integration and make broader contributions to international peace, cooperation, and development.
The PM also confirmed that Vietnam would send a representative to the OECD Ministerial Council Meeting in June, demonstrating its strong commitment and desire for closer collaboration with the organization.
Why do countries want to attain OECD membership?
The OECD is a multilateral entity comprising 38 member countries committed to fostering economic growth, prosperity, and sustainable development. Based in Paris, France, and founded in 1961, it serves as a distinctive forum and knowledge center for data and analysis, sharing experiences, exchanging best practices, and providing guidance on public policies and international standards.
The organization spans various critical policy areas that impact its members’ social and economic welfare, including enhancing economic performance, promoting job creation, strengthening education, and combating international tax evasion. In collaboration with its associated bodies, the International Energy Agency (IEA) and the Nuclear Energy Agency (NEA), the OECD enables both member and non-member nations to capitalize on opportunities and tackle the challenges posed by the global economy.
Countries seeking to join the OECD commit to aligning their policies with international best practices and governance standards. The reforms required for OECD accession can create a better business environment, reduce costs, and increase efficiency. Thus, these bids may also boost investor confidence, helping to attract new investments and drive economic growth.
OECD highly values Vietnam’s importance to the global economy
In response to the recent request from Vietnam’s Prime Minister, the OECD Secretary-General recognized Vietnam as a thriving and rapidly advancing economy with a growing influence in Southeast Asia, serving as a key contributor to global economic growth. He stated that the OECD is enthusiastic about enhancing collaboration with Vietnam and is ready to provide support through policy recommendations and assistance, particularly in Vietnam’s pursuit of OECD membership.
Additionally, he affirmed his commitment to facilitating Vietnam’s involvement in the OECD Declaration on International Investment and Multinational Enterprises. He pledged to strengthen ties between the OECD’s specialized committees and Vietnam’s ministries and agencies to improve collaboration.
In its most recent report released on December 4, 2024, the OECD anticipates that Vietnam’s real GDP growth will remain strong at 6.5 percent for both 2025 and 2026. The organization expresses optimism that Vietnam’s private consumption will gain from consistent growth in real wages and employment levels. Furthermore, investment is expected to receive a boost from continual foreign direct investment inflows and intended hikes in public spending.
Vietnam’s beneficial cooperation with the OECD
Vietnam’s cooperation with the OECD has expanded gradually over the years, marked by significant initiatives that provide various benefits for both sides. The OECD engages with Vietnam through country-specific projects and the Southeast Asia Regional Programme (SEARP). This engagement includes participating in OECD bodies, conducting country-specific policy reviews, integrating relevant data into OECD databases, performing benchmarking exercises, and adhering to OECD instruments.
Over the years, Vietnam and the OECD have collaborated on several country-specific reports and publications. Notable examples include the Multi-Dimensional Review of Vietnam published in 2020 and the SME and Entrepreneurship Policy report released in early 2021, significantly contributing to Vietnam’s Socio-Economic Development Plan for 2021-2025.
Earlier, in 2015, the OECD published an Agriculture Policy Review, along with a report on Science, Technology, and Innovation in Vietnam. The organization also issued three important reviews in 2018: an Investment Policy Review, an Urban Policy Review, and a Peer Review of Competition Law and Policy in Vietnam.
Vietnam-OECD’s first Memorandum of Understanding
On 2021, Vietnam and the OECD signed a Memorandum of Understanding (MoU) to strengthen cooperation in the 2022-2026 period. It was the first MoU signed between the two sides, which aimed to frame future cooperation and pave the way for an eventual OECD Country Program with the Southeast Asian country.
Under the MoU, the OECD pledges to assist Vietnam in its reform initiatives in areas such as competition, investment, and tax policy, where collaboration is already established. Additionally, the OECD will support country-specific publications and assist in following up on the OECD Clean Energy Finance and Investment Policy Review for Vietnam.
Thailand and Indonesia’s bids for OECD memberships: Focus ASEAN
In July 2023, Indonesia became the first ASEAN country to apply for membership to the OECD. The next year, in April, Thailand submitted its own application.
This competitive move has garnered international attention as it signifies a strategic shift for these nations and signals a noteworthy transformation in global governance dynamics, making them more inclusive and relevant.
Indonesia has been an ‘OECD Key Partner’ since 2007, alongside Brazil, China, India, and South Africa, actively participating in the organization’s day-to-day work and policy discussions. Thailand has also maintained a collaborative relationship with the OECD for over two decades.
From the OECD’s perspective, the inclusion of these two significant Southeast Asian economies would be a substantial achievement. In recent years, the global economy has undergone remarkable changes, with non-OECD countries like China, Brazil, and India exerting considerable influence on trade and international cooperation. This shift heightens the necessity for the OECD to broaden its membership base.
Experts observe that Indonesia and Thailand’s accession to the OECD would enhance the organization’s relevance in an era where economic power is increasingly centered in Asia. Additionally, it would render the OECD more representative of the global economy, thereby bestowing greater legitimacy in establishing international standards and policies.
Conclusion
Vietnam’s pursuit of early accession to the OECD shows its commitment to economic reform and integration into the global economy. The collaboration between Vietnam and the OECD not only highlights Vietnam’s growing influence in Southeast Asia but also offers the potential for enhanced economic growth, investment opportunities, and adherence to international best practices.
As Vietnam aims to transition into a developed nation by 2045, its partnership with the OECD will be instrumental in achieving strategic development goals and fostering sustainable prosperity.
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