Mathias Cormann elected next secretary-general of the OECD

London: Mathias Cormann has been elected the next secretary-general of the Organisation for Economic Co-operation and Development in a strategic coup for the Australian government that also catapults the former finance minister onto the world stage.

Cormann was on Friday named the winner of the six-month contest, which pitted him against nine other candidates from around the world for the top international post.

Mathias Cormann, Australia’s longest-serving finance minister, will become the next secretary-general of the Paris-based OECD.Credit: Alex Ellinghausen

Cormann pledged to put his early focus on the economic recovery from coronavirus, climate change and digital taxation.

He thanked his chief rival, former European Union trade commissioner Cecilia Malmstrom, and acknowledged the efforts the Australian government had put into backing his bid.

“I would like to thank the Australian government, in particular the Prime Minister, the Treasurer, the Foreign Minister and our two trade ministers during this period, for their strong support of my candidacy.

“A particular thank you to the hardworking team at the Department of Foreign Affairs and Trade, in Canberra and around the world, who have done an outstanding job in supporting my campaign.

“I would also like to thank the opposition for their generous offer of bipartisan support.”

A deft lobbying campaign mounted by Cormann, Prime Minister Scott Morrison, Australia’s network of ambassadors and the Department of Foreign Affairs and Trade in Canberra rallied enough support from the OECD’s 38 member countries to snare victory.

One observer said the final round of consultations to determine a winner was “intense” and Australian officials were braced for the result to go either way.

Consultations earlier this week had failed to determine whether Cormann or Malmstrom had enough support. A new ballot was held on Friday morning Paris-time and Cormann was successful.

The West Australian will take the helm at the influential Paris-based economic body on June 1.

Prime Minister Scott Morrison framed the appointment as “recognition of Australia’s global agency and standing amongst fellow liberal democracies”.

“This is the most senior appointment of an Australian candidate to an international body for decades,” he said.

“Australia overcame great odds for Mathias Cormann to be successful in the contest, which comprised nine other high-calibre candidates, including six from Europe.”

Cormann, a Liberal Party power broker and Australia’s longest-serving finance minister, left the Senate in October to run for the job and travelled around Europe, Asia, South America and North America to rally support.

His use of a Royal Australian Air Force Falcon jet for some of the lobbying blitz angered Labor, which gave bipartisan backing to his bid.

The position will give the former Western Australia senator serious influence over the world’s post-pandemic economic recovery and carriage of negotiations over a global accord for a new tax on multinational tech giants.

The tax 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.

Cormann was elected despite a determined campaign by environmentalists to have his candidacy rejected over the Coalition government’s record on climate change and emissions reduction.

Cormann has never denied the science of climate change but has questioned the best way to lower emissions.

In lobbying OECD members, Cormann said achieving global net-zero emissions by 2050 required an “urgent and major international effort”. He said the OECD had a role to play “to help countries around the world achieve global net-zero emissions by 2050″.

His five-year posting will be the first time someone from the Asia-Pacific region has led the OECD but the rejection of Malmstrom means it will not gain its first female leader.

The OECD emerged from the post-war Marshall Plan and plays a key role in shaping the international economic agenda. Its members represent more than 60 per cent of global GDP and must be committed to democracy and a free market.

Headquartered in a sprawling compound in central Paris, it has an annual budget of €386 million ($625 million), a staff of more than 3500 and a seat at G20 meetings.

Cormann, who was born in Belgium and is fluent in German, French and Flemish, pitched 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.

Morrison said the pandemic had made the OECD’s role in shaping international economic, tax and climate policy “more critical than ever”.

“Mathias’ work and life experience in both Europe and Australia, his outstanding record as finance minister and Senate leader and his expertise in international economic diplomacy will ensure he makes an outstanding contribution as leader of the OECD.”

In a statement, the dean of ambassadors to the OECD and chair of the selection committee, Christopher Sharrock, said Cormann was selected after a “straw poll” on March 12.

“The chair would like to thank all heads of delegations for the constructive spirit, the effort, and the commitment to consensus that they, their governments, and all ten candidates demonstrated so amply throughout this process.”

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