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13. Juli 2007

International Monetary Fund

Sarko's stitch-up The International Monetary Fund is a global development institution with 185 members, so why is Nicolas Sarkozy treating it as his own personal fiefdom?

The International Monetary Fund is a global development institution with 185 members and resources of £158bn, so why is Nicolas Sarkozy treating it as his own personal fiefdom? Just a few weeks after he came to power promising labour-market reform, France's president has fallen back on a more familiar policy of jobs pour les garçons - at least if the politicking over who heads the IMF is any guide. Since the post was suddenly and surprisingly put up for grabs last month, Mr Sarkozy has been lobbying hard for his man to take over. This week he got his way: Dominique Strauss-Kahn, the former French finance minister, is to be Europe's choice.  

There are two big problems here. One is the way in which Brussels chose its candidate, over what reporters called "a lengthy, informal breakfast". Beer and sandwiches may have been replaced by coffee and croissants, but this was still a backroom deal, with no open tender nor any formal process. That such an important job can be treated as if it were merely a diplomatic bauble illustrates the second problem: the continental assumption that, since a European has run the IMF for all 61 years of its existence, one should continue to do so always and for ever. This is the long-standing compact whereby an American runs the World Bank, while Europe gets the IMF. The French call this "la règle tacite"; the British might know it better as Buggins' turn.

Alistair Darling appears to have been completely outmanoeuvred at this summit and has been fighting a fierce rearguard action ever since. This must be easier terrain for a Labour chancellor than agonising about the private-equity industry, and Mr Darling is doing the right thing in arguing for a more democratic process. Placemanship has had disastrous consequences at the World Bank, which is still recovering from the imposition then the forced departure of Paul Wolfowitz.

None of this is to say that Mr Strauss-Kahn should not get the job. Indeed DSK (as the French call him) is so heavyweight he is still a possible future president; by dispatching his Socialist opponent to Washington Mr Sarkozy is playing a canny game. But there are perfectly able administrators in the developing countries that comprise the IMF's clientele. It may make sense to put one of them in charge and start shifting our global economic insitutions away from their current semi-colonialism. The French, it is pointed out, already head three big multilaterals. That does not mean a fourth Frenchman should not join them; rather it demonstrates the narrowness of the current appointment process. This row should not descend into a patriots' bunfight. As ever, when nationalism meets multilateralism the result is a mess.

Source The Guardian

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