Carstens states his case for the top job

Carstens’ presentation to the IMF board reads like a power play in challenging the legitimacy of the Fund and their commitment to a transparent and merit-based selection process.

Lagarde will no doubt benefit from Carstens’ statement being made public before she meets with the board on Thursday. Still, Carstens sure to have the Lagarde camp working overtime produce a convincing declaration of her suitability for the post.

It started in May with an eight page curriculum vitae of sorts in which he spelled out why he should get the job, starting:

To facilitate the transparent and merit-based selection process, I hereby offer an overview of my professional background; economic policymaking record; managerial and diplomatic skills, with particular attention to multilateral cooperation; understanding of the Fund and the policy challenges facing the Fund´s diverse membership; and, in closing, my strategic vision for the institution.

Long-time readers of the blog will no doubt be interested to see how it compares to the candidate assessments offered by some of his critics…

Throughout there are digs at the European stitch up such as: “we need a Managing Director who can best serve all of the member countries, not merely those experiencing challenges at one particular point in time.”

Advertisement

Candidates ready themselves to face the panel

We had a pretty good idea already but yesterday the IMF board made public the interview dates for each candidate. Carstens will meet the Board today whilst Lagarde will have her interview on Thursday the 23 June. The statement reads:

During their informal meetings with the Board, each candidate will present their views on issues facing the Fund and the membership, and the Executive Directors will be able to exchange views with the candidates. Candidates’ statements will be published on the Fund’s website following these meetings.

We look forward to reading them.

The Board will review each candidate next week and make a final decision by June 30.

Lagarde left for Washington with a box chocolates and best wishes from her European counterparts. Not that she needs the luck, I mean, they’ll be voting for her either way, right?

In the news: Yes, but what will they do? Did you hear the one about the economist and the lawyer?

Sunday’s Financial Times Editorial offered some thoughts on what the next IMF recruitment process should look like and what should be expected of future candidates. The focus, it argues, should be on what the prospective candidate would do as managing director, not their support base or geographical origins, i.e. their plans and policy positions should be made clear. It claims “a better recruitment process for the top IMF leadership will be one of the many things the next managing director will owe to poor and middle-income countries, especially if it is Ms Lagarde.” Amongst others is the deputy managing director position, which by convention is held by the US; and a reform of the Fund’s governance structure.

Hinting throughout at the conflict of interest that would meet a European head given the current eurozone crisis it asks that the next MD “devise a gradual exit strategy from the eurozone” and that the Fund be reinvented “so it can do its part in managing the shift of economic power to the emerging world.” It ends by stating: “Its next boss should make clear that the IMF will be more useful to all its members the less beholden it is to any one of them.”

The New York Times too opines that “we need to know more to decide who would make the best IMF leader at this critical juncture.”

What have the candidates got to hide?

If news reports are to be believed, IMF MD-elect Christine Lagarde will be interviewed by the IMF board next Thursday (23rd June), with IMF MD loser-elect, Augustine Carstens on Tuesday (21st). The IMF is refusing to provide any information about the interviews – which will be held in secret – and doesn’t even have their dates on its website. This despite IMF governors promising – many many times – a truly transparent process, and campaigners calling for open interviews.

Which got me thinking: what might the candidates – and the board – have to hide? Perhaps they are fearful that a clinical dissection of Lagarde’s disastrous approach towards Greece would be too much for us to hear?  Or maybe we’d find out that Carstens would be even more hardline? Or could it be that they want to really get to the bottom of the skeletons in the candidates’ closets?

Surely all the secrecy can’t be because the interviews are likely to be a polite, meaningless formality, to rubber stamp decisions that have already been made?  Perish the thought.

Is IMF choosing the right boss?

By John Jacobs, program officer for the Halifax Initiative. A coalition of development, environment, faith-based, human rights and labour groups, and the Canadian presence for public interest work and education on the IFIs.

Originally published in the Chronicle Herald

The candidates being considered for International Monetary Fund’s new boss do not inspire much hope for an institution in need of credibility. Much of the media’s focus has been on the nationality of the candidates rather than on which capabilities are needed to address the IMF’s major challenges: shifting to a more flexible policy orientation and adapting to a changed global economy.

According to a recent report by the IMF’s Independent Evaluation Office, the Fund’s effectiveness has been hindered by a “high degree of groupthink, intellectual capture and inadequate intellectual approaches.” The groupthink was founded on the belief that “market discipline and self-regulation [are] sufficient to stave off serious problems in financial institutions.”

Put another way, the IMF believed that the global financial markets should be left to their own devices to chart the contours of economic globalization. As a result, mere months before the financial crisis, the “IMF’s banner message was one of continued optimism and … pointed to a positive near-term outlook and fundamentally sound financial market conditions.” The Fund continued to endorse “light-touch regulation and supervision policies” — policies that we now know contributed to the crisis.