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Former Official Says OECD In Decline, Suggests Reforms

December 18, 1985

PARIS (AP) _ A former top official of the Organization for Economic Cooperation and Development was quoted Wednesday as saying the organization was becoming increasingly politicized and may have outlived its usefulness.

In an interview with the French business daily the Tribune of the Economy, Stephen Marris said many member governments had concluded that the international cooperation which such organizations were established to promote was ″at best useless, at worst dangerous.″

He listed among the causes of an apparent disenchantment with international organizations were a growing bureaucracy, ″useless meetings and interminable documents.″

Marris was quoted as saying that in order to avoid political controversy the organization couched some of its recommendations in tones ″not much louder than a bat squeak.″

Marris, a Briton, was the chief economist at the OECD for eight years. He is now with the Institute for International Economics in Washington and has just produced a study forecasting a steep decline for the dollar.

Sometimes referred to as the ″rich countries’ club,″ the OECD groups the 24 main industrial nations of the West and includes poorer countries such as Turkey and Portugal.

OECD grew out of the organization that administered the Marshal Plan in Europe after World War II and was established in its present form 25 years ago.

It is housed in a modern glass and concrete building plus annexes and a chateau in the smart 16th district, has a secretariat of 1,900 and costs member governments, who maintain permanent delegations, more than $80 million a year.

Marris claimed senior officials in capitals of the main industrialized nations now bypass OECD when making major economic decisions.

An example he cited was a meeting of the ″Group of Five″ most highly developed countries - the United States, Britain, France, West Germany and Japan - in New York on Sept. 22 that agreed on a joint effort to bring down the dollar.

By contrast, Marris was quoted as saying the 1967 devaluation of sterling and the 1971 devaluation of the dollar were organized at OECD and then confirmed by the International Monetary Fund.

He said the ″golden days″ of the organization in the 1960s and early 1970s when major economic activities took place at OECD ended because the organization could not adapt to three political changes:

- Establishment of a six and then 10-nation European Common Market that bound some members of OECD to closer economic cooperation than was possible individually at OECD.

- U.S. decisions to deal directly with the Common Market and Japan and bypass the OECD.

- Increasing importance in the world economy of non-member states such as Brazil and South Korea compared to relatively poor member countries such as Turkey.

He was quoted as saying the decisive moment for OECD came in 1978 when then-West German Chancellor Helmut Schmidt and others blamed the organization for drafting an old fashioned Keynesian plan to combat a slump in world economic recovery instead of foreseeing the second oil shock a year later, a recession and soaring inflation.

″Since then,″ he said, ″we have seen in all the major countries, except France, governments of the right convinced that international cooperation was at best useless and at worst dangerous and that each country should put its own house in order.″

Then, he said, national governments began to get involved in nominations of personnel and the OECD ″became more and more sensitive to political pressure and spoke truthfully less and less.″

The OECD’s most visible public activity is producing regular economic policy analyses and forecasts, which critics charged are toned down to avoid offending member governments.

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