Thursday, 19 May 2011

Succession at the IMF

Unless you have a visceral hatred of the IMF, you could not have missed all the media coverage of Dominique Strauss Kahn, its boss. The affair has exploded like a nuclear bomb on a number of fronts. Firstly there is the IMF itself, currently deeply involved in the European bailout situation. Secondly it has blown open the French Presidential race - he was the front runner and it was quite possible that Sarkozy would have lost to him in the elections next year. It has called into question Continental European tolerance for sexual profligacy of its leaders - surely the Italian Prime Minister Silvio Berlusconi is at least a bit worried.
But this blog must remain a strictly non political one. This post is about the appointment of the new IMF chief - DSK has just resigned today and even if he is acquitted, is unlikely to get his job back.

It has been an utterly shameful arrangement that a cosy understanding exists that the World Bank chief is an American and that the IMF chief is an European.  This is a throwback to the post World War II days when only America and Europe mattered. Its a different world today and yet the old boys club still remains. Its a multi polar world these days, in case you have not noticed. But then old foggies in gentleman's clubs are rarely wont to look outside the window until its too late.

That the head of a major international body is chosen for reasons of nationality rather than merit is simply an unacceptable position. But then, alas, head of major international bodies, are indeed chosen that way. Witness the position of the Secretary General of the United Nations  a succession of colourless personalities have graced this chair. Witness the boss of the EU - can anybody even remember his name. Such are the contortions of world politics. So its futile to expect that merit alone will decide the next head of the IMF.  But there is no harm in at least stating the obvious, however unlikely the chance of it happening.

This is a time to change. The new head of the IMF must simply be the best man for the job. In a time of unprecedented financial and economic challenges, it cannot be anybody but that. Irrespective of whether he is from Timor Leste or from Tuvalu. He must be a world renowned economist and also somebody who has worked in the IMF before - after all its a huge and complex organisation.  He must have a track record of major economic policy achievements on the international stage. He must be a heavyweight - not a puppet who can be strung along.


  1. kiwibloke19/5/11

    Closer home we have had many a rubberstamp adroning the palace built by Lutyens. Many of them have been political appointees of no consequense including the current one (Gosh, I sometimes even forget her name - Patil or Patel?) There have been a few exceptions - Sarvepalli, Dr. Prasad, Kalam, Hussain. Rest of them are nondescripts!

  2. @kiwi - True. Many posts have less than stellar occupants. My gripe is against he carving up of the World Bank to the Americans and the IMF to the Europeans. In this day and age ???

  3. I guess after all, all these global organizations were their initiatives. They may have the best people from around the world working in these orgs, but the guy at the top has to be theirs. If Asians have to contribute, being ingenious is not enough, taking initiative is also needed.

  4. successful men keep women behind....matter munnuku vantha prachnai thaan :) Sarkozya paathu saar cosya iruka try pannirukaaru...paavam..maatikitaru :)

  5. Apparently the candidate has to be younger than 65 and Montek Singh may fail that bar. Also the other leading non-European candidate, Kemal Dervis, has also apparently said that he is not interested so after all the hue and cry it might just end up being a European. But your point is taken, it is a mindset shift that needs to happen.

  6. @Deepa - Yes politics is never far away from any senior appointment, even in the corporate world. The voting structure of the IMF is also a factor - America plus Europe have a majority.

    @gils - Ha Ha Ha.

    @J - It looks like a done deal for Christine Lagarde. The Economist has eloquently argues that whatever you do, don't appoint a politician to the post.

  7. Firstly, they should review the practice of having an European head the IMF, which was set in 1945.
    Secondly, give a woman a chance!
    Strauss had to walk out with such disgrace.
    I would vote for:
    Christine Lagrade, who can be a strong contender.

  8. I liked the way you narrated last para - credentials for the desired candidate to possess in order to qualify as IMF Head.

    Best man for the job... sounds utopian! The world does not seem to conduct that ways. Very true in this day and age and almost everywhere. I scratch my head in bewilderment.

  9. @Hena - Unfortunately Christine Lagarde is probably the worst candidate under the circumstances. She will get IMF more deeply mired into Europe. Given that she is the serving French finance minister, what chance that she will be neutral - she is very likely to follow the French view on the Eurozone, which she after all crafted herself.

    @Vishal - Yes, it is rare that the best candidate is picked for any job. Utopian indeed. A sad commentary on human nature.

  10. Sandhya Sriram22/5/11

    it is a world of very intelligent people out here on this blogospace and i feel completely out of place. so cant really comment here.

    but whoever comes there, if works Lalu style ... be busy with your own priorities and let the diplomats do their job... i think that would be the most successful model.

  11. @Sandhya - Nonsense. A gold medallist can't say such things :) DSK was a sort of version of Lalu actually !!

  12. Why is Berlusconi not poking his nose into this? :-) :-) Maybe he is busy with bunga-bunga parties.

    Until China makes the noises (as a economic superpower), those in their ivory tower mindsets won't budge.

  13. @RamMmm - Berlusconi doesn't understand finance. And he better keep quiet on the other matter.

  14. Anonymous27/5/11

    How a prime minister cant understand finance.

  15. @Anon - The sag of Berlusconi is an entirely different matter. He understands finance, of course - he's a very successful corporate king as well. But the sort of things he does .......

  16. Btw, my candidate is gaining a lot of rapid support.
    Will BRICS change or charge her stars? What say?

  17. @hema - Yes indeed. Its going to be Christine Lagarde. And old European stitchup again especially as Merkel is arguing strongly.


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