[stop-imf] Development News Friday, March 3, 2000 (fwd)
Robert Weissman
rob@essential.org
Fri, 3 Mar 2000 12:36:45 -0500 (EST)
(Excerpted) Development News March 3, 2000 from the World Bank
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(Excerpted) Headlines for Friday, March 3, 2000:
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- SCHR=D6DER HAILS IMF BALLOT, CLINTON URGES NEW EU CANDIDATE. =
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- MOZAMBIQUE'S DEBT FLOOD NEEDS IMMEDIATE RELIEF: COALITION. =
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SCHR=D6DER HAILS IMF BALLOT, CLINTON URGES NEW EU CANDIDATE.
Germany said today that it would discuss with its EU partners what to do
next after its candidate to head the IMF, Caio Koch-Weser, failed to
secure a majority in an straw poll yesterday, Reuters reports. In a
statement published late yesterday, German chancellor Gerhard Schr=F6der
said the informal vote by the IMF executive board could pave the way for a
"consensus result with the US and Japan," hailing the selection as a sign
of "European solidarity," Agence France-Presse notes. U.S. officials, by
contrast, viewed the vote "as vindication of their long-stated position
that Koch-Weser commands respect in only one part of the world [i.e.,
Europe.]," the Washington Post notes (p.E9).
Koch-Weser received 43 percent of votes from executive board members, the
New York Times reports (p.C1). The informal vote does not confirm
Koch-Weser as IMF managing director, however, as it was taken simply to
give the 24-member executive board an initial assessment of the three
candidates for the post. Interim IMF chief Stanley Fischer came in second
(12 percent), while in third place was former Japanese finance minister
Eisuke Sakakibara (9 percent). But countries representing 36 percent of
the votes at the international lender, including the US, abstained,
Reuters reports. "On the basis of the poll, (IMF) executive directors will
continue their consultations with each other and their national
authorities on the next steps," AFP notes an IMF statement said, adding
that no decision had been made on a further poll.
"Europe has underlined its determination to fill the post...and has
obtained a lot of support from the Third World and emerging nations,"
Schr=F6der said further. The outcome of the straw poll was "the result of
European solidarity and capacity for action." The German government stood
by Koch-Weser as its choice, notes AFP. "Germany has proposed a candidate
and he's the right one," a government spokesman said in Berlin.
Meanwhile, the LA Times (p.C1) said the German bid was on the "verge of
collapse, . . .shrouding the leadership of the global lender in doubt."
Ahead of the straw poll, reports Dow Jones, US President Bill Clinton said
he remained committed to seeing a European in charge of the Fund and
dismissed criticism that the US acted improperly when it rejected
Koch-Weser's candidacy. "I want there to be a European director for the
IMF," Clinton said. "I will not support an American candidate even though
I have enormous respect for Stanley Fischer... He is an enormously able
man," he added.
While his government appeared to be standing by Koch-Weser, however, there
were signs that within the EU-which officially endorsed him on
Monday-support for the former World Bank managing director might be
eroding. "It's clear that nobody can be named against the wishes of the
US, any more than they could name a new managing director against that of
the Europeans," European Commission President Romano Prodi says in
Friday's edition of the Financial Times Deutschland. "We're in a situation
of reciprocal vetoes," the FT (p.1) quotes him as saying.
Schr=F6der's foreign policy adviser, notes Reuters, said today the prospect=
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for a European leading the Fund were good, despite the lack of agreement
in yesterday's ballot. Michael Steiner told ARD (Germany) television the
chancellor would meet Portuguese President Antonio Guterres, whose country
holds the rotating EU presidency. The question was whether the IMF would
have a role "that serves the whole world... Or is it an organization which
simply serves the interests of one state," AFP notes Steiner said. "We
think it must be an institution which represents the interests of the
whole world. And Koch-Weser stands for this."
German Defense Minister Rudolf Scharping meanwhile said he was confident
that the fight between Europe and the US over the top IMF post would not
damage overall transatlantic relations. "Our interests and judgements are
so highly identical, that a case such as this, as maddening as it might
be, will not tilt our relationship out of balance", Scharping said
yesterday. He called the US role in the conflict "incomprehensible and
counterproductive," in terms of cooperation between the two powers, but
also called for an end to mutual finger-pointing. "We are stuck with the
situation we are in now, and must get through it," he said.
In Paris, French Finance Minister Christian Sautter said he expected
Koch-Weser to get the job despite resistance by the US. "I am confident in
the European candidate. I am convinced that the tradition that a European
should head the IMF must be and will be respected. A view taken by the US
about this candidate makes no difference to us," Sautter is quoted as
saying.
The Times of London (p.18) reports meanwhile that former UK Chancellor of
the Exchequer Kenneth Clarke was emerging last night as one of two
possible British candidates to head the IMF. Sources close to him said
they believed he would be interested if UK Prime Minister Tony Blair
wanted to propose him for the job. Clarke's name surfaced as EU
governments discreetly began the search for a new candidate in the
expectation that Koch-Weser would effectively be blocked by US opposition
at the Fund's executive board meeting last night. Unlike Koch-Weser, says
the story, Clarke has the stature and experience for the post and is
well-regarded in both Washington and IMF circles.
The news comes as former World Bank President Robert McNamara writes in a
letter to the Economist (p.4) that he begs to differ from the view that
Koch-Weser is "manifestly not the best choice" for the IMF because of a
"mediocre career" at the World Bank with "almost no management
experience". Koch-Weser worked directly for him for ten years, McNamara
writes, noting that almost exactly 20 years ago, Koch-Weser was assigned
the complex and delicate task of managing China's re-entry into the Bank. =
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His work led to an immensely productive political and economic
relationship between China and the Bank. He opened the way for a similar
relationship between the Bank and the Middle East. It was these
accomplishments that led incumbent World Bank President James Wolfensohn
to appoint Koch-Weser a managing director at the Bank, the youngest person
ever to hold such a post.
Commenting in an editorial, Die Welt (Germany, p.) says the candidacy of
Koch-Weser, whose image has taken a beating in the contest for the IMF
post, has been Schr=F6der's biggest foreign policy defeat to date. His
candidacy was doomed to fail from the beginning and Schr=F6der was foolish
to push it. But the US has behaved as clumsily, and stands as an
uncompromising hegemonic power. A Washington Times editorial (p.A18)
opines that "[U.S. President] Clinton was right in objecting to Mr.
Koch-Weser's candidacy, but he should have expressed that months ago."
Also in a letter to the Economist (p.4), Bretton Woods Committee Deputy
Director Randy Rodgers writes that the process of wheeling-and-dealing is
no longer typical of the IMF's decision-making, which has become more
transparent and accountable to its members. The Fund would be
hard-pressed to continue with such a method when selecting future chiefs. =
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Developing countries are frustrated with G7 dominance of international
financial decision-making.
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MOZAMBIQUE'S DEBT FLOOD NEEDS IMMEDIATE RELIEF: COALITION. Mozambique is
drowning in international debt as well as floodwaters and should be
relieved of the $5 billion it owes immediately, the Australian Associated
Press reports campaigners said today. Jubilee 2000 Debt Coalition
coordinator Grant Hill said the Australian government should do all it
could to persuade the World Bank, the IMF, and other creditors to let
Mozambique use all its funds to rebuild and provide a future for its
people.
"After the devastation of these floods it is immoral for creditors to
expect debt repayments from Mozambique," Hill said, noting that aid
organization OXFAM had estimated the budget for primary healthcare in
Mozambique at $10 million a year and for primary education at $32 million. =
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This meant that even before the floods, Mozambique was paying more on
debts than on health and education combined.
Mozambique was due for debt relief under the Heavily Indebted Poor
Countries (HIPC) debt relief initiative, Hill said, "but even after this
relief is granted, it will still owe nearly $5 billion and still have to
pay out $1.1 million each week-a reduction of just 15 per cent."
Meanwhile, USA Today (p.6A) reports that donor nations stepped up the race
to rescue survivors from trees and rooftops as forecasters warned that a
new cyclone was threatening the flood-ravaged country. Stung by criticism
of the slow response to Africa's latest disaster, Western leaders
announced new shipments, the piece says.
As flood waters continue to claim more victims, land-mine experts warned
of an explosive menace underfoot that has been mostly ignored in the panic
to save lives, reports the Los Angeles Times (p.A4). Hundreds of buried
weapons are believed to have been swept from the positions that
humanitarian groups had painstakingly plotted on maps over the last few
years. Rescue teams who have been working to save thousands of stranded
residents have been just plain lucky not to have tripped on a mine,
according to officials with the UN Accelerated Demining Project.
The Washington Post (p.A23), the New York Times (p.A10) and the Christian
Science Monitor (p.6) also report on the flooding.
An editorial in the Los Angeles Times (p.A16) notes that the West has held
out Mozambique as a model of African democracy and hailed the country's
brave, decade-long effort to resuscitate its economy. In this crisis it
needs food, medicines, fresh water, tents , and money to rebuild. The
West helped revive flooded Central American countries last year. Surely
it could do the same in this crisis.
Meanwhile, Martin Woollacott of the Guardian (UK, p.8) comments that
although there should have been a swifter international response to the
natural disaster in Mozambique, the main lessons to be drawn concern a
society's collective perception of risk, its treatment of its poorest
classes, and its standards of behavior. A society which scores high on
these categories, even if it is not a wealthy society, prepares more
intelligently for disasters, getting through them with fewer lost lives,
uses international aid more efficiently, and recovers more quickly.
At its broadest, Woollacott says, disaster management shades into the
general offensive on poverty and ignorance and into efforts to make
societies more participatory, democratic, and comradely. The World Bank's
new disaster management facility, for instance, operates on the basis that
reducing poverty is the key to diminishing the impact of disasters.
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