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Al-Ahram Weekly 13 - 19 April 2000 Issue No. 477 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 13 - 19 April 2000 Issue No. 477
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Books Features Travel Living Sports Profile People Time Out Chronicles Cartoons Letters New management, new jargon
By Ahmed AbushadiDespite four-months notice, the top post at the International Monetary Fund (IMF), probably the world's most influential international organisation, was vacant for an unprecedented 39 days -- a record for the IMF.
While similar delays are common at other agencies, the selection process at the IMF was heavily criticised, in both industrial as well as developing countries, as inefficient and undemocratic.
Michel Camdessus, the IMF's indefatigable French managing director for the past 13 crisis-ridden years, had signaled his intention to resign as early as 9 November, 1999. When Camdessus actually left on 14 February, 2000, his duties were still being handled by Stan Fischer, his well-known American deputy.
It was not until 23 March, 2000 that Horst Kohler, a financial expert with strong official backing, was appointed as the new managing director. Kohler is the first German national to lead the IMF since its creation in 1944. Of the previous seven managing directors, three were Frenchmen, two Swedish, one Belgian and one Dutch.
The G10, the wealthiest group of 10 industrial countries, has traditionally appointed a European to the IMF's most powerful position. Japan, a member of the group, has consistently failed to impose its candidate for the post. An American is usually selected to lead the Fund's sister-institution, the World Bank Group, presently headed by James Wolfensohn.
The selection process proved taxing for both the no-nonsense IMF staff as well as its 24-member executive board, which seals the deal.Abdel-Shakour Shaalan, who represents Egypt and several other Arab countries on the board, was openly critical that developing countries' views were ignored.
Even the new managing director was miffed by the protracted selection. "I agree that this process was really not the best and I have no hesitation in saying that it should be reviewed and improved," Kohler said at his first press conference in Washington on 17 March.
The 57 year-old Kohler is resigning his current position as president of the European Bank for Reconstruction and Development, and hopes the move to the IMF will be "an orderly transition". He is married and has two children.
Kohler arrives at the renovated headquarters during a particularly busy week. From 14-17 April finance ministers and central bankers convene their semi-annual global economic review meetings at the IMF building in downtown Washington DC. It is also a time of institutional change and pressing demands from both wealthy and poor nations calling for reform.
The so-called Interim Committee, the top IMF ministerial policy-making body since 1974, is in transition too. It has just been transformed into the International Monetary and Financial Committee (IMFC), which has powers as equally sweeping as its predecesor.
IMFC, which adds a new acronym to the panopoly of jargon characteristic of the institution, will examine the IMF's evolving role in the world. Agreement is emerging among wealthy as well as poor countries that the main priority for the IMF today is to enhance its crisis prevention activities.
Like the Interim Committee, IMFC will meet twice annually. First it will examine the health of the world economy, noting signs of strength or pointing to looming weaknesses as they emerge. The World Economic Outlook, the crucial six-monthly report prepared by IMF staff, underpins this examination.
Other global issues before the committee include ways to reduce debt and poverty in developing countries, and means of strengthening the international financial system to avert Asia-type crises.
Reforming the IMF itself is high on the agenda. This is a daunting, perennial and multifaceted task. Yet no one seems to know exactly what needs to be done to stem the unceasing criticism coming from almost every active political group in its 182 member-nations.
In response to a question on how he plans to deal with this overwhelming criticism of the IMF, Kohler made the predictable point that he will listen well to his critics' views. He then made two worthwhile observations. First, that the IMF should release information that enables markets and the public to better judge a country, its economy and its problems. Secondly, that the institution has to give more attention to developing countries, to find sustainable problem-solving strategies.
Kohler, whose selection as IMF managing director came as an anti-climax at best, is not a well-known international figure. This week he will be eager to make an early impact on many veteran officials and observers who will be watching his performance at his inaugural spring meetings in Washington.
His job is not made any easier by succeeding a tough-minded predecessor, who ruled the institution for almost a quarter of its life, leaving behind a legacy of major global accomplishments. Paradoxically, Camdessus' accomplishments did nothing to prevent a thoughtless bystander throwing an egg at him at a recent appearance -- a shocking event coming at the close of his remarkable career!
Kohler, the 24-member IMFC meeting, and the IMF as an institution, will be hard-pressed to show the world that they are effective in dealing with seemingly incessant financial instability and can improve economic conditions for scores of poor countries. It is these two seemingly unattainable objectives that make the IMF such an important institution and the job of its managing director such an impossible task.
