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Tuesday, May 24, 2011

IMF Boss Will Not Come From the Africa:Why

Former South African finance minister Trevor Manuel is being touted as one of the contenders for the top job, while his chances of landing it are very slim as candidates are political appointees. Should Manuel land the post, then he would control the world body's economic purse, and who knows, he may advocate more financial support and favourable policies for Africa.

He would certainly also enjoy privileges of flying first class and sleeping in a $3,000 per night hotel like Strauss-Kahn did. If our local five star hotels cost over $100 a night, you can imagine what $3,000 can get you. Food for thought!

Ironically, while the IMF boss was busy splashing cash around, including raising a US$1 million bail, developing countries continue to struggle to repay Bretton Woods institutions' loans resulting in them being caught up in a perpetual debt trap as their citizens wallow in abject poverty.
During a recent online debate on this latest ‘economic scandal' with fellow business journalists from Africa and Asia, we agreed that it was time an emerging market took over the reins at IMF.

One journalist from Uganda said this required someone with the competence; while another from Rwanda questioned whether an emerging country could afford it because voting rights at the IMF just like at the other Bretton Woods institution (the World Bank), are based on financial contributions.
In as much as countries such as China may have the financial muscle, and while Manuel might have the right qualifications, the issue is about political power.
President, Nicolas Sarkozy in toasting, following the demise of former International Monetary Fund (IMF) managing director, Dominique Strauss-Kahn due to an alleged sex scandal, their joy maybe short-lived.

For Mr Sarkozy, the fall of Strauss-Kahn means a step closer to victory in the 2012 presidential elections, as the disgraced Socialist candidate will certainly not make it to the polls.

The IMF and World Bank at times do not have a clue about countries they assist. The IMF has a tendency of jetting in and out experts without having a full understanding of the operations of a particular country it is assisting.

Zimbabwe is a good example of failed Bretton Woods institutions' policies in the 90s after the prescribed Economic Structural Adjustment Programme failed to yield positive results leaving the country in a worse off situation.

"A leader from an emerging market will have a more grounded understanding of the needs of these economies, and could be a strong advocate for favourable policies", said the Ugandan journalist. The Rwandese still insisted that the world was better off with a European leader.

Gone are the days when Africans looked up to the West for "salvation". Africa has the skills and capacity to run the IMF so, why not let them run it in the spirit of "democracy?"

Other journalists said it was time for change and to revolutionise the IMF to which a Nigerian journalist responded, "Yes we can." Anyway, the next IMF boss is going to come from the West - and if it happens otherwise then history would have been made! Fatoumata Jawara and Aileen Kwa in their book, "Behind the Scenes at the WTO: The Real World of International Trade Negotiations" published in 2003 expose the goings-on at WTO.

They argue that the secretariat lacks neutrality and is biased towards the EU and the US, which are influential in the appointment of the director-general.
The WTO is regarded as undemocratic, elitist resembling a rich men's club. The most powerful players in the global economy (EU and the US) are firmly entrenched at the top of the bullying hierarchy at WTO.

They have the political and economic muscle to call the shots, issue threats and make promises where necessary, to further their interests.
Other tactics used are: divide and rule, arm-twisting, incentives (technical assistance, aid), harassment, disinformation, sanctions, unseating of delegates, withdrawal of bilateral agreements/aid, threats to relieve negotiators (including ambassadors) of their duties, blacklisting of unfriendly countries, and in classic divide and rule style deploy middle-income countries to convince low income countries to change their positions.

So if this is what goes on at WTO you can imagine what transpires at IMF. This is the reason why Africans are still far from running IMF even though the time has come to have an African leader.

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