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.