European Monetary Fund

The former Managing Director of the International Monetary Fund, Mr. Dominique Strauss-Kahn, has been in the news lately because he tried to rape a hotel employee in New York City. He's denied all charges, and has been let out on a bail of USD 1 million and a USD 5 million insurance bond. I think according to the latest news, his DNA has been found on the dress that the lady wore at the time he tried to rape her.

In such high profile cases, its quite possible that the actual truth might get muddied with a lot of conspiracy theories and special interests, and this is probably going to be another example of just that. However, this is where I stop talking about it.

Now that Strauss-Kahn has stepped down, the race to be the next MD of the IMF is speeding up, and a few names have already come to the fore, actually, just one, and Europe's already pushing all its might behind her. She's the Finance Minister of France, Christine Lagarde. According to many western media news sources, she's a popular candidate of the west, and the IMF itself. Somehow, my own impression of the news coverage of the BRICS, and other emerging economies' protest, is that they are reporting it as an irritant to the process, and that it will be once again, upon the west to help out the third world which can't seem to get its act together.

Lagarde, who would succeed countryman Dominique Strauss- Kahn and become the first woman to lead the Washington-based lender since its founding in 1945, now has the backing of Europe’s main economies and, according to her government, China. Brazil will also privately support her rather than backing her main rival, Mexican central bank governor Agustin Carstens, a Brazilian government official said.

“It’s looking like it’s almost a done deal for Lagarde,” Desmond Lachman, a former deputy director at the IMF and now a resident fellow at the American Enterprise Institute in Washington, said by telephone. “The emerging markets can’t get their act together and back one candidate.”

The IMF executive directors representing Brazil, Russia, India, China and South Africa did unite yesterday to protest publicly the presumption that the fund’s next chief once again be a European.

“We are concerned with public statements made recently by high-level European officials to the effect that the position of managing director should continue to be occupied by a European,” the directors, who serve on the IMF board, said in a statement yesterday. “If the fund is to have credibility and legitimacy, its managing director should be selected after broad consultation with the membership.”

I really don't know what game the Chinese are playing when they are supporting Lagarde's candidacy nonetheless, by allowing France to officially announce that she has the Chinese support as well.

The IMF and the World Bank have been the playgrounds of the Americans and the Europeans ever since they were formed, and these two entities are determined that it remains that way.

"It's a European consensus," Francois Baroin, France's budget minister and government spokesman, told Europe 1 radio.

"The euro needs our attention. We need to have the Europeans (on board), the Chinese support the candidacy of Christine Lagarde," he said.

The United States, who sources in Washington have said will back a European, and European nations have enough joint voting power at the IMF to decide who leads it.

I get the idea that the Americans and the western Europeans have already started taking the third world's opinions NOT seriously in this matter, and like I said, they probably consider that its just a minor irritant that they will be able to brush aside without much effort. Unfortunately, they may be right, unless the BRICS, being the most vocal of the third world economic blocs, raises its voice and shows that it is very serious when it says it believes in "abandoning the obsolete unwritten convention that requires that the head of the IMF be necessarily from Europe."

For the Europeans, the need to stay of top of the IMF appears to emerge primarily from the fact that their own economy is screwed up, and that controlling the agency will allow them to perhaps circumvent many rules and regulations that the IMF and the WB have historically forced the third world nations to be subjected to. That is my opinion.

According to the media, there seems to be a common theme in reporting - lack of unity. The Asians apparently are unwilling to support a non- Asian candidate, Brazil does not want to support a Mexican candidate, and China's supporting France because it does not have its own strong candidate. While at the same time, Europe and the US seem united in backing Lagarde.

Ah, I guess the world still has to be a white man's burden, but this time its to shamelessly protect their own economies while the developing world watches.