Confusion and a cloudy present for new IMF director
Published on 05/07/2011
Christine Lagarde will formally take office as IMF chief this week after winning what finished as a ‘two horse’ race for the MD’s job at the International Monetary Fund.
After the resignation of Dominique Strauss-Kahn on May 14th, following an alleged sexual assault on a hotel maid in New York, the IMF, which provides loans and advice to governments in economic crisis, began a search for a new managing director to head up the international organisation.
For the majority of the selection process, Agustin Carstens and French Finance Minister Christine Lagarde were the only formal candidates for the position of managing director at the International Monetary Fund.
Shortly before the organisation finished the process of interviewing Carstens and Lagarde, there was a last-minute horse to stick its neck across the nomination line. Bank of Israel Governor Stanley Fischer decided that he would have a go at battling for the top spot.
The 24-member executive IMF board spent time interviewing the candidates to ascertain which of the two would be the most suitable body for the job, and has since come to the conclusion that Lagarde, with her ‘silver tongued’ English enunciation, was the top gal for the job. The IMF has not mentioned that Fischer took part in the interview process.
The US failed to break out in support for any of the candidates with Carstens commenting, during a trip to Canada, last month, to show off his abilities and garner support for his candidacy:
"I have talked with Secretary Geithner and basically what he said is what he has repeated more than once, and that is that both Madame Lagarde and myself are credible candidates and that they welcome and are looking forward to an open process."
Gordon Brown, former British Prime Minister considered by some to have been a key figure in averting a world economic crisis in 2008, was rumored to be eying up the top job. However, the UK coalition put quick pay to that idea with a swift overt demonstration of support for the former French Minister Lagarde as IMF’s first female head.
A stern hand at the helm couldn’t come soon enough, some would argue, as the IMF pulls out everything it has got to save the wounded, but not out – yet, Greek economy. A question to ask though is will Christine Lagarde’s tenure at the IMF fair any better than any of her predecessors? Only time will tell.
So now we move on to the much more interesting part of this story and that is the conspiracy theories surrounding Dominique Strauss-Kahn hasty departure as IMF head.
Some, such as Michelle Sabban, a senior councilor for the greater Paris region stated when interviewed by the UK’s Daily Telegraph: “I am convinced it is an international conspiracy.” Not necessarily surprising mind; Sabban is, after all, a confirmed Strauss-Kahn loyalist.
Interestingly, just a couple of weeks before the story broke Strauss-Kahn himself predicted that his enemies could use his weakness for promiscuity against him if he opted to challenge for the presidency of France.
In a recent article in Liberation he told the reporter that his ‘love of women, money and his Jewishness’ all stood against his running for French President.
The very legitimacy of the selection process has been called in to question, by some, as are the claims that the process for selecting the new head has been, truly fair, open and merit-based. The rushed appointment has by-passed the organizations’ official process and thus contravened numerous commitments made by global leaders over recent years.
Interestingly enough, Europeans have held the post of IMF managing director since the institution was founded after World War II, while Americans have traditionally headed the World Bank, the IMF’s sister development agency.
Emerging-market countries have been steadily increasing pressure for governance of the two institutions to be opened up to candidates from developing nations.
One could almost analogize world economic management like a game of baseball. Americans throw the ball and the European’s hit with the bat. All while the emerging economies run after the ball or sit on the bench hoping to, one day, get to hold the bat or the ball.
Trouble is, whilst the Americans and the Europeans are more than willing to allow the emerging economies to play with them, neither party would like them playing with, what they see to be, their bat or ball.
If they’re not careful, perhaps the emerging-nations will go off and start their own game of bat and ball.
Russell Hammond / AES International / Expatica