[stop-imf] IMF hopeless, irrespective of who's managing director

[Robert Weissman]

Succession underscores IMF's outdated structure
By Rick Rowden
Published: March 9 2004 4:00 | Last Updated: March 9 2004 4:00
THE FINANCIAL TIMES

>From Mr Rick Rowden.

Sir, Regarding the hoop-la over the process of determining a new =
managing director for the International Monetary Fund, Mois=E9s Na=EDm =
makes a striking understatement when he writes: "Those in charge of the =
Bretton Woods institutions - the board members and ministers, central =
bank governors and politicians - remain unwilling to adopt reforms that =
are as obvious as they are necessary" ("End the fund's succession =
fiasco", March 5). However, he is quite right about the last time there =
was a succession, when due process was trumped and "obscure back-room =
deals made a joke of the much vaunted transparency the IMF preaches to =
others".

However, one worries that readers will come away with a misguided =
impression that the nationality of the managing director actually =
matters, and neglect the more important fact that the US Treasury =
Department and other finance ministries of the Group of Seven =
industrialised countries really call the shots when it comes to the =
IMF's policies and binding loan conditions it imposes on the world's =
poorest countries. Our partners throughout the global south are well =
aware of the "gatekeeper" role the IMF plays, in which it acts as the =
sole arbiter of what constitutes "sound economic policies" and its =
approval of their national economic policies functions as a green light =
that opens the door to all other bilateral and multilateral creditors =
and donors. Managing directors concerned with development policy ought =
reasonably to question if yet another one will bring about any changes =
in the harmful neo-liberal policies pushed by the IMF for the past 20 =
years, which have neither increased per capita economic growth rates to =
where they had been in the 1960s and 1970s nor substantially reduced =
poverty in the global south. No one believes the new managing director =
will have the authority to bring about the type of "guerrilla assault" =
on these failed neo-liberal policies called for by Mark Malloch-Brown, =
the United Nations development programme administrator, on the release =
of the latest Human Development Report, at least not as long at the US =
Treasury dominates the IMF board. (And do not hold your breath in the =
hope a Kerry Treasury would be different!)

Does the despicable display of horse-trading among the former colonial =
powers in craven attempts to get one of their own to head the IMF not =
vindicate the claims by anti-globalisation campaigners that the =
institution is but a "neocolonial" power structure? Will this =
undemocratic process simply give further credence to political =
scientists who say the globalisation process suffers from a "democratic =
deficit"?

The fact is that the succession fiasco Mr Na=EDm describes will serve =
only to underscore that the IMF's structure still reflects the world of =
the 1940s. While no one doubts the utility of some kind of international =
institution to assist countries with periodic balance of payments =
problems, perhaps Joseph Stiglitz, Nobel laureate, is correct in =
concluding that this institution is beyond hope of redemption. What the =
world needs now is a new organisation built on 21st-century standards of =
democratic participation, accountability to all citizens and total =
transparency.

Rick Rowden, Policy Officer, ActionAid USA, Washington, DC 20006, US