Sunday, 22 May 2011


I think there may be some confusion about how the leadership and bureaucratic structure of the IMF operates and the degree to which it is in fact an integral part of financial capitalism and the corporate welfare state. The IMF is in essence an institution that is above nations, more or less like a UN agency, but accountable to its larger member governments, while coordinating policy with central banks, especially the FED and European Central Bank, and always responsive to the needs of finance capital. 
The IMF has been a very secretive institution, operating as guardian of finance capital and above public accountability although its policies negatively impact the public. The IMF is in essence one of the most authoritarian institutions of what would presumably pass as 'democratic' societies. The first time I conducted research there in the late 1980s, one of their lawyers had to give me clearance just to look at documents about Colombia, Chile, and Peru. Once they gave me clearance, the decision of what I could see was up to each division chief - Colombian, Chilean, and Peruvian.   
When I asked for sensitive documents, they informed me that they did not have an equivalent to a Freedom of Information Act, and even if I appealed to my congressman and senator, they could easily ignore them, for the IMF operates above governments as an agency, but accountable to the Finance Ministry of member governments. When the World Bank, always more progressive and more open bureaucratically, began to change and adopt US bureaucratic models, the stuffy IMF also made some modifications in its stagnant Cold War bureaucratic structure that was something between the UN and the US Treasury Department.

What does this have to do with a new managing director position and the process that everyone agrees is closed and subject to backroom deals? The answer is that the Fund makes policy decisions that impact the public but is itself above public accountability. The G-7 largely determine IMF policy perimeters, but within the G-7, the US, Germany, Japan, UK, and France are the key players. Australia and Mexico have now joined South Africa, Russia, Brazil, China, and India to demand a more open process in the selection of IMF chief.
The board can appoint a new chief from one of the "PIIGS" (Portugal, Ireland, Italy, Greece and Spain) and it would not make a dime's worth of difference in terms of policy toward any member country. In short, the managing director sets the 'tone', the 'atmosphere' and is nothing more or less than a PR person for the Fund. The Fund needs a non-Western PR person for symbolic reasons right at this juncture, given that the West is in a mess politically, financially, and economically.

Finally, the IMF has been a major player in precipitating the global recession of 2008-2011, not only because it never warned about the structural problems and abuses in the private sector, especially in US banking, but because it actually encouraged speculation as part of its commitment to upholding free enterprise. However, when the system collapsed, the IMF expected taxpayers, especially the middle class and workers, to bail out the bankrupt system. 
Would a non-Western IMF managing director make the IMF less authoritarian and more accountable to the public; would the IMF become less supportive of corporate welfare and more socially responsible if a non-Western individual is heading the organization? Absolutely not, because the IMF reflects the interests of international finance capital. However, the atmospherics of authoritarianism may change in an institution that even US officials agree has been very closed, if not secretive.

1 comment:

Anonymous said...

Language effects the jurisdiction which effects the outcome.