What have the candidates got to hide?

June 19, 2011 Leave a comment

If news reports are to be believed, IMF MD-elect Christine Lagarde will be interviewed by the IMF board next Thursday (23rd June), with IMF MD loser-elect, Augustine Carstens on Tuesday (21st). The IMF is refusing to provide any information about the interviews - which will be held in secret – and doesn’t even have their dates on its website. This despite IMF governors promising – many many times – a truly transparent process, and campaigners calling for open interviews.

Which got me thinking: what might the candidates – and the board – have to hide? Perhaps they are fearful that a clinical dissection of Lagarde’s disastrous approach towards Greece would be too much for us to hear?  Or maybe we’d find out that Carstens would be even more hardline? Or could it be that they want to really get to the bottom of the skeletons in the candidates’ closets?

Surely all the secrecy can’t be because the interviews are likely to be a polite, meaningless formality, to rubber stamp decisions that have already been made?  Perish the thought.

Filed under The process

Lagarde passed finish line before starting gun fired

June 15, 2011 4 Comments

Based on public proclamations of support, the tally kept by the excellent global memo suggests that Lagarde already has 55 per cent of the votes – already enough to be the next IMF Managing Director. She had these before the IMF even bothered to confirm the list of candidates; and well before she’ll have to submit herself to the indignity of answering questions – in private – at the IMF executive board.

How is this possible?  Three reasons; most important first. Read more of this post

Filed under Other

Come on people – Carstens is NOT the developing country candidate

June 8, 2011 Leave a comment

A rash of press stories trying to stir up a Lagarde vs Carstens spat, and continued carping about BRIC failures to get their act together are really irritating me.

Lets get a few things straight. Read more of this post

Filed under Who's in the running

Poor old Spain… out in the cold with all the others

June 7, 2011 Leave a comment

Spain’s run of luck – World cup winners, tennis champions, exonerated cucumbers – finally ran out this week.  Along with 164 other members of the IMF it doesn’t get a vote in the upcoming leadership election. Alas – Spain’s finance minister explained to the press – we wanted to vote for Lagarde, but the pesky IMF rules mean we have to give our votes to our IMF board member, Mexico, who – the cads! – want to vote for their favoured son, Carstens.

As you might expect if you’ve been following this process, it gets more absurd.  Read more of this post

Filed under Other, The process Tagged with , ,

IMF leader imposition – the people fight back

June 5, 2011 1 Comment

Fed up of the colonial era ambience of the IMF leadership race? Sick of European leaders deciding they have the right to tell the rest of the world to shut up and accept their favoured daughter?  Well, you’re not alone.  In fact, the first internet surveys suggest you’re in the overwhelming majority.

First off the mark was the Guardian newspaper. In a simple yes / no questions, a whopping 75 per cent said the IMF voting process is “unfair and totally outdated”. Next up came a much more detailed array of questions from the Center for Global development – the poll is still open if you want to have your say. Here are a selection of the top findings:

83 per cent don’t think the Europeans “should maintain their maintain its customary prerogative of seeking IMF Board approval for a single European candidate”.

88 per cent believe “the traditional European prerogative to name the head of the IMF … should be replaced by a selection process that is open, competitive and merit-based, without regard to nationality.”

Read more of this post

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Dear candidate… tell us what you think!

May 26, 2011 Leave a comment

The next IMF boss will have a lot of power – a soapbox to pronounce on economic issues, hundreds of billions of dollars lending to force crisis-stricken countries to change their policies, a vast team of policy wonks to promote the ideas they like. Isn’t it time they were held a bit more accountable to the citizens of the world?

One way to start would be to get all the candidates to answer questions in public – on TV, to parliamentarians, direct to citizens - the more opportunities the better.  But what questions should we ask?  A colleague suggested they should tell us what they think about major economic issues of the day. Here’s a list drawn from chapter 5 of the UN’s excellent World Economic and Social Survey 2010:

“Instead of increasing investment and growth, capital and financial market liberalization had the opposite effect by increasing volatility and uncertainty, which negatively impacted the long-term investment that is critical for structural transformation and development.” Do you agree?

“Reforming global rules in order to re-establish the capacity of public authorities both globally and nationally to curb excessive private risk-taking and ensure that finance serves the real sector,instead of the other way around, is an urgent priority.” Will you back the efforts of national authorities to control volatile capital flows?

“It is necessary to end the competition over foreign investment using regulatory and tax policies that characterized individual country policies in the past three decades.” How do you think this race to the bottom can be reversed?

Let’s hope civil society groups, parliaments and the media can add to this list – and force the candidates to give decent answers – how else can a truly merit-based process operate?

Filed under Other, The process Tagged with , , ,

Lagarde – another IMF scandal in the making?

May 25, 2011 4 Comments

Put Friday 10th June in your calendar. Not just because it’s the closing date for nominations for IMF MD candidates. But also because, in one of those coincidences of fate that seem too delicious to be purely accidental, it’s also the deadline for the French legal system to decide whether to launch a full scale investigation into Christine Lagarde over allegations of abuse of office.

The charges and backstory are a bit complicated – and I’ll do my best to explain it in a moment – but here’s the thing. We could end up in the farcical situation where the leading candidate for IMF head is defending herself against charges that could land her in prison for up to five years – coincidentally also the length of the IMF MD’s term of office.

You have to love the short-sighted European leaders who are pushing her forward – not caring about the damage caused by trampling roughshod over past commitments to fair, open processes, they seem determined to add a high stakes gamble for a two-in-a -row shot at French IMF heads booted out in the same year. You couldn’t make this stuff up.

Read more of this post

Filed under The process, Who's in the running Tagged with , ,

Wake up Europe! Shots across the Euro-bow

May 22, 2011 1 Comment

Strange times produce strange bedfellows. In a direct challenge to the European gang’s attempt to shoehorn in yet another French MD, South Africa and Australia have issued a joint statement saying that, “For too long, the IMF’s legitimacy has been undermined by a convention to appoint its senior management on the basis of their nationality.”

This is precisely the point that European governments – seemingly stuck in a nineteenth century timewarp – seem pigheadedly determined to ignore. Forcing in another European undermines the legitimacy of the IMF, making it look absurdly out of touch in a global economy powered by China, India and other emerging markets. It will also do them no favours in Europe – will an insider who owes their position to the backing of the Euro club really speak truth to power and help them take the hard choices ahead? I doubt it and so do leading analysts at the Peterson Institute. In a thoughtful article, Veron and Subramanian argue:

“if and when Greece comes back for its second tranche of borrowing, the MD will have … to convince Europe, in what promises to be a heated discussion, that Greece has a solvency problem and requires debt restructuring; or, if the IMF concludes that Greece merits international support and all other options are worse, to convince the rest of the world to extend further financial commitments. Either way, there is less need for a European and more for an objective outsider.”

Amar Bhattacharya of the G24 group of developing countries at the Fund puts it well: “There are very, very strong able candidates from the developing world and there has never been a more important time for change for the institution given the challenges it faces and the need for true multilateralism.” It seems obvious to me that Europe’s best interest lies in a truly open, merit-based process: but are there any leading European politicians far-sighted enough to see that?

Filed under Other, Who's in the running Tagged with , , , ,

What is Russia thinking?

May 21, 2011 1 Comment

Russia’s backing of  Grigory Marchenko, governor of the Kazakh central bank has added spice – and a side order of mischief – to the IMF leadership race. Marchenko disarmingly gave the game away by saying “this is all so unexpected” and admitting success was only “theoretically possible”.  So that makes two no-hope candidates in a row – or am I underestimating theRussian bear?

Russia’s real prize is a united front with emerging markets around a single candidate – probably the only way another ludicrous European stitch-up can be prevented. Presumably it hopes to gain first mover advantage with  other BRIC countries slow to muster their own champion, and dealt a blow by the withdrawal of initial bookies’ favourite Kemal Dervis.

Offical nominations open on Monday. I’m strapping myself in for more twists and turns, not least the ongoing full scale judicial inquiry into European frontrunner Christine Lagarde.

IMF critics must be licking their lips – sex scandals, backroom carve ups between yesterday’s powers, corruption allegations, a hastily announced process with little time for scrutiny, the exclusion of most of the best candidates because they hold the wrong passports – what better way to discredit the institution?

Filed under Who's in the running Tagged with , , ,

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