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Biden courted in Cormann's bid to run 'the most important organisation you've never heard of'
London: Mathias Cormann's campaign to win a prized role at the heart of global economic policy has been given an important boost after Prime Minister Scott Morrison used his first conversation with US President-elect Joe Biden to push the former finance minister's candidacy.
American support could prove crucial for Cormann's bid to become the next secretary-general of the Paris-based Organisation for Economic Co-operation and Development (OECD) – a position that would give him serious influence over the world's post-pandemic economic recovery.
Mathias Cormann is flying around the world campaigning to be appointed secretary-general of the OECD. Credit: Jamie Brown
Cormann, a Liberal Party power broker and Australia's longest-serving finance minister, left the Senate in October to run for the job and is travelling around Europe on a Royal Australian Air Force Falcon jet to rally support. Europe is central to Cormann's push as it is home to 26 of the OECD's 38 member countries. Full membership for the latest entry, Costa Rica, is still in train but they will also have a view on the next secretary-general.
As the OECD's largest financial backer, America holds significant sway - and Morrison and Cormann hope to secure White House backing for Australia's bid.
The Sydney Morning Herald and The Age have confirmed Morrison raised Cormann's campaign during a congratulatory telephone call with Biden following the US presidential election. The Prime Minister also discussed it with Japanese Prime Minister Yoshihide Suga in Tokyo this week, and is lobbying other world leaders in a behind-the-scenes diplomatic blitz.
Outgoing US President Donald Trump has nominated his deputy chief of staff, former Microsoft and General Motors executive Chris Liddell, for the prestigious five-year post. However the November 3 election result has cast doubts over the prospects of a Trump-aligned official.
The hope in Canberra is that Biden's administration will back Cormann as the three-phase secretary general contest enters its final stretch early next year, when the 10 candidates have been culled to the final two or three.
Setting the global agenda
After some early pessimism about his chances, European observers believe Cormann now has a good shot at becoming the first Australian to lead an institution that Daniel Runde from Washington's Centre for Strategic and International Studies once called "the most important organisation you've never heard of".
While it began as part of the Marshall Plan's European reconstruction program, the OECD now shapes the global economic agenda. The comparative data the organisation publishes forces under-performing countries to lift their game across a range of benchmarks. Best-known are its rankings of school systems worldwide – an annual report card that has often prompted nations to overhaul their curriculums.
Its members represent more than 60 per cent of global GDP.
It is also the likely venue for a breakthrough on a new tax on multinational tech giants that could reap up to $135 billion in extra revenue for 137 governments. World leaders asked the OECD to design the new tax to prevent America launching a trade war against countries that planned to go it alone in the quest to get a fairer share of tax from US-based Silicon Valley firms.
"Good progress has been made but there is clearly more work to be done to reach a consensus landing," Cormann said recently in respect to tax.
A pivot towards the Asia-Pacific as the emerging centre of the global economy is a key part of Cormann's pitch to European figures.
"The OECD should engage with all the world's regions but, yes, the Asia-Pacific is somewhere that I am keen for the OECD to have a greater focus," Cormann said.
"Our region has been the engine of global growth and a powerhouse for our economies and our industries. It is where most of the global growth will be generated over the next decade and beyond. That creates opportunities for Australia and for countries across Europe and the Americas."
Headquartered in a sprawling compound in central Paris, the OECD has an annual budget of €386 million ($625 million), staff of more than 3500 and a seat at G20 meetings.
Cormann's competition
The complex process to replace outgoing chief Angel Gurria won't conclude until a winner is announced in March. There is no clear frontrunner but Europe hasn't held the secretary-general job since 1996 and would like it back.
Cormann, who was born in Belgium and is fluent in German, French and Flemish, is pitching himself as a bridge between Europe's traditional economies and the increasingly important Asia-Pacific markets. He spent 25 years in Europe before moving to Australia in 1996.
Europe has put up seven candidates – a scatter-gun approach that suggests the continent cannot yet deliver a knock-out blow to other contenders. Sweden's Cecilia Malmstrom is a strong prospect given her previous role as the European Union's trade commissioner. There is also some buzz around Estonian President Kersti Kaljulaid, who has a particular interest in the digital economy.
Cormann has used the RAAF jet for a whirlwind tour of coronavirus-ravaged Europe, meeting ministers in Germany, Turkey, Denmark, Switzerland, Slovenia, Luxembourg and Belgium. He and the Department of Foreign Affairs and Trade have scheduled visits to at least a dozen more nations in person. By the end of the lobbying blitz, Cormann will have made his case in person or via video-link to each of the OECD's 38 members.
"Germany, in particular Berlin, is a very powerful case study to demonstrate the real life impact of policy values and political choices on real people," Cormann said.
"Post-World War II, in Berlin you had people living side-by-side in East and West, starting from the same position. They faced the same challenges and opportunities, were living and working in the same climate, the same geography, everything was the same.
Mathias Cormann, Australia's candidate to become secretary-general of the OECD, meets with German Minister of State Niels Annen in Berlin.Credit: DFAT
"But on one side you had policies supporting individual freedom, free enterprise, reward for effort, encouraging people to stretch themselves which led to strong prosperity and growth. On the other side, you had a focus on equality of outcomes, which made people comparatively poorer.
"After 12 years, the East had to build a wall to try and keep people in. Another few decades later, not even that wall was strong enough to prevent people pursuing their freedom and the opportunities to improve your life which are offered by democratic market economies around the world."
Britain's coronavirus lockdown has made a stop in London difficult but Australia is confident it can get Downing Street's support for Cormann's bid.
The dean of ambassadors to the OECD, the UK's Christopher Sharrock, is responsible for guiding the three-stage selection process. In the first round, Sharrock will identify which of the 10 candidates are best placed to win the eventual appointment. About half of the candidates are likely to be thrown out at this point. The second round of consultation will narrow the field to two or three contenders.
The third round will aim to reach a "consensus" among member countries about who should get the five-year appointment.
In a scenario where Cormann ends up in the final group with one or two European candidates, the influence of the US could be vital. While Europe might insist one of its own wins, it could also swing behind Biden's preferred candidate as a show of good faith and sign that it is committed to improved transatlantic relations following the Trump era.
Should there be a stalemate, Cormann could become the consensus candidate. He is well known in European capitals from his time as finance minister.
The climate change test
Cormann's biggest hurdle is climate change. Many European governments believe Australia's Coalition government has not done enough and are frustrated it has not explicitly committed to achieving net zero emissions by 2050.
"There are a lot of misconceptions when it comes to Australia's efforts and performance in relation to action on climate change, which when it’s raised, I'm addressing it with objective facts," Cormann said.
"My message to OECD member countries is that I'm committed to ambitious and effective action on climate change and that under my leadership the OECD would do everything it can, using the tools it has available, to help secure the best outcomes."
If he woos Europe and wins the job, Cormann would work in Paris with former ASIC chief Greg Medcraft, the director of the OECD's financial and enterprise affairs directorate, and former federal Labor MP David Bradbury, the head of the tax policy and statistics division.
The new secretary-general's term will begin on July 1.