The International Monetary Fund has long drawn fire from
emerging markets and the third world, a result of its track record
of imposing harsh austerity measures on relatively poor but
indebted nations. Backed by the globe's largest economies and
drawing its leadership from their professional classes, it's
currently on the receiving end of a great deal of bitterness and
bile from nations like Greece, Ireland and Portugal.
Its former managing director, Dominique Strauss-Kahn,
the position after becoming embattled by accusations of sexual
assault. A housekeeper at a New York hotel came to the NYPD, saying
the IMF director had sexually assaulted her in his bedroom when she
entered to clean; since then,
have come forward, stating that Strauss-Kahn also attacked or
Leaderless, the IMF now represents a clear arena for a power
struggle between the new and old economic guard. The
for the top spot - French finance minister Christian Lagarde -
creates a certain continuity between old and new. Both Lagarde and
Strauss-Kahn are French, from that nation's political elite and
generally represent the interests of the IMF's European members.
Not everyone agrees with this plan, however.
"For too long, the IMF's legitimacy has been undermined by a
convention to appoint its senior management on the basis of their
nationality," said finance ministers Pravin Gordhan of South
Africa and Wayne Swan of Australia in a joint statement.
On the other side of the Atlantic, the Mexican government
its central bank governor, Agustín Carstens, to take the
The contest will be fought over ideology and history as well as
qualifications, given the IMF's historical role as the arbiter of
fiscal discipline on indebted and developing nations. In the wake
of the 2008 financial crisis, countries like Brazil and Argentina,
which had their own bruising encounters with the international
financial community, sharply criticized the apparent hypocrisy of
the United States, Britain and the European Union.
In the past, poorer countries were told to follow orthodox economic
principles and 'take their medicine' in a debt crisis, slashing
spending and social programs and raising
to close budget holes, while allowing ailing companies to fail. The
world's great powers did exactly the opposite - which seems to have
been more effective than the traditional harsh remedy.
Whoever takes the top seat at the IMF, further controversy over
austerity and debt will surely ensue.