Stiglitz on world gov't; Koch-Weser in the lead

[Doug Henwood]

[from the World Bank's daily clipping service]

GLOBAL GOVERNANCE NEEDED TO MATCH GLOBALIZATION:  STIGLITZ.
In an interview with La Tribune (France, p.12), outgoing World Bank Chief
Economist Joseph Stiglitz says we find ourselves today in a situation where
there is financial and economic globalization going on, but no world 
government.
There is a need for at least some global governance, he says, noting 
that at the
international level, there is no equivalent to mechanisms that at the national
level allow different points of view to be expressed.  "It would have been
impossible for the American government to impose on the US what the IMF imposed
on Indonesia," Stiglitz says, saying ministers of finance and central bankers
barely hear the voices of those who, in countries under structural adjustment,
are the first victims of dictated policies.

Asked if a reform of the Bretton Woods institutions is therefore needed,
Stiglitz says the Bank does rather good work on the ground.  It is the Fund's
workings that bear re-examination.  The fundamental point is the governance of
the institution, whose interventions have a great impact on economic policies,
on workers, on small and medium-sized enterprises, and so do not only concern
creditors and financial markets.  So long as the voices of those most affected
are not heard, the policies of the Fund will not change, for these are defined
exclusively by finance ministers and central bankers.  It is necessary to start
a debate on the principles that should guide IMF action and allow it 
to focus on
ways of reducing the pain of populations, he says.

The difficulty so far of finding a successor to outgoing IMF Managing Director
Michel Camdessus reflects the contradictions in the debate 
surrounding the Fund,
Stiglitz says.  What is needed is someone with qualities that are generally
difficult to combine:  financial competence and a sharp sense of the need to
respect democratic and human exigencies.





LOBBYING PLACES KOCH-WESER IN POLE POSITION TO HEAD IMF.

The contest for the leadership of the IMF has entered a diplomatic endgame amid
signs that German Deputy Finance Minister Caio Koch-Weser is moving into pole
position, reports the Financial Times (p.6).  Koch-Weser's chances 
are improving
thanks to a personal lobbying campaign by German Chancellor Gerhard Schröder,
who telephoned last week to US President Bill Clinton to say that he considered
winning the IMF post for Germany was "vital" for US-German relations.

Schröder used similar tactics in a recent meeting with French Prime Minister
Lionel Jospin, says the story, noting that  the intensity of the 
German campaign
has surprised US and European officials at the World Economic Forum annual
meeting in Davos.  UK Chancellor of the Exchequer Gordon Brown has meanwhile
offered to help the Koch-Weser campaign.

Noting that US Treasury Secretary Lawrence Summers last year said the 
IMF should
get out of the business of long-term development lending, the story adds that
Koch-Weser says his opponents are willfully distorting his background in
development at the World Bank and underplaying his experience in international
finance, which includes high-level negotiations with China and Russia.  He says
the new head of the IMF should act as a CEO able to communicate with the wider
world rather than a chief financial officer who deals solely with
number-crunching.  He is also stressing that he would rely on IMF Deputy
Managing Director Stanley Fischer.

A fluent English speaker, Koch-Weser is also confident that he can improve the
image of the IMF in the eyes of a skeptical US Congress, address concerns about
inequality and globalization, and build a more effective partnership 
between the
World Bank and the IMF.