Putin’s New Premier Reaches Out to West With Bid for OECD Ties

(Bloomberg) -- Russia’s new prime minister has ordered his government to revive Russia’s ties with the Organization for Economic Cooperation and Development in what looks like a longshot bid to reopen links with western institutions severed after the Ukraine crisis began in 2014.

Mikhail Mishustin asked subordinates to draft a plan to rebuild links to the Paris-based organization, possibly even restarting Russia’s efforts to join, according to three people familiar with the effort. The OECD put Russia’s bid on hold after the U.S. and European Union imposed sanctions on Russia after its annexation of Crimea from Ukraine.

The push to restore ties -- even if it doesn’t immediately lead to restarting accession efforts -- signals the new government’s desire to reach out to the West and to improve the business climate, two Russian officials said. The move comes as the new government has recognized that Russia’s pivot away from the West since the imposition of sanctions has taken it too far toward China, one of them said.

Joining the OECD would require Russia to take on a number of obligations to improve state and corporate governance, disclosure and tax policies and reduce corruption that would amount to a “substantial positive signal for investors and entrepreneurs,” said Sergei Guriev, former chief economist at the European Bank for Reconstruction and Development.

Suspended Accession

The Economy Ministry said Russia will continue deepening cooperation with the OECD but noted that “since it wasn’t Russia that suspended the accession process, but the OECD itself and its members, the issue of restarting talks isn’t up to us. We haven’t received any such signals from the OECD.”

The government is considering cooperation with major multilateral bodies including the OECD and will make a decision on its plans later, its press service said, without specifying a time line.

Mishustin’s push isn’t likely to yield big results soon, as there’s little sign the western countries who dominate the OECD are ready to change their stance, according to Ivan Timofeev, a sanctions specialist at the Russian International Affairs Council, a Kremlin-backed group. “Any rapprochement with Russia is still a toxic topic in the West,” he said.

Restarting the accession bid would require a decision by consensus among all 36 OECD countries, the group’s press office said. Its members and key partners account for about 80% of world trade and investment.

Russia already participates in more than two dozen OECD bodies, joining a few since the membership bid was put on hold in 2014, and technical cooperation has continued. But restarting ties broadly would be a sign of a much closer relationship. Short of reviving the bid for full membership, Russia could be designated a “key partner” of the OECD, a status enjoyed by other big emerging markets like China, India and Brazil.

Mishustin worked closely with the OECD in his previous job as head of Russia’s Federal Tax Service, where he won praise from the group for his successful drive to computerize the vast bureaucracy collecting revenue for the government. He also has a good personal relationship with OECD Secretary-General Jose Angel Gurria, who was among first international figures to congratulate Mishustin on his promotion, according to a Russian official. The OECD declined to comment on their relationship.

©2020 Bloomberg L.P.

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