Discontent as Former IMF Chief


by Akhilesh Upadhyay

Inter Press Service
January 22, 2002

Secretary-General Kofi Annan's appointment of former International Monetary Fund (IMF) chief Michel Camdessus to oversee the 'Financing for Development' initiative has drawn stinging criticism from grassroots groups, who say the move constitutes callous disregard for their experiences and a ringing endorsement of the market-friendly orthodoxy.

Proponents of compassionate globalisation accused the Frenchman, who in 2000 stepped down as IMF managing director after 13 years in office, of bullying developing countries with a combination of bad economic advice, which devastated their economies, and harsh policy requirements imposed as conditions for bail-out funds.

"Camdessus is an unrepentant free marketeer," says Arjun Karki, who represents Asian non-governmental organisations (NGOs) at the ongoing preparatory meeting for the International Conference on Financing for Development (FfD). "All over the world, more and more people have actually turned poor due to policies dictated by the IMF and World Bank. How could the Secretary-General appoint a person who as IMF chief has been responsible for the current mess, including the one now in Argentina?"

Alongside Camdessus, Annan has chosen South African Finance Minister Trevor Manuel to oversee the FfD process, which encompasses a number of emotive issues including debt relief and aid levels. It is generally accepted that more of each is needed but this has been a difficult proposition even at the best of times; prospects appear bleak amid deepening recession.

Annan's chief spokesman, Fred Eckhard, defended the appointment of Camdessus, saying his stature and expertise were unquestionable.

"But neither are we questioning Camdessus' expertise," said Karki. "But that expertise doesn't mean anything to me if it can't be used for the betterment of a poor country like mine." Nepal, he added, spends almost 40 percent of its earnings on debt servicing.

"While the number of countries failing is going up, institutions like the IMF continue their same old macroeconomic policies," says Gemma Adaba, U.N. representative of the International Confederation of Free Trade Unions. "Unless there's a paradigm shift, we will be in a bind. But I don't see that happening any time soon."

People like Camdessus like to talk about poverty alleviation and increased spending on education and health, says Adaba, yet they continue to demand strict adherence to conditions that clearly are at odds with these stated goals. "He is not a fortunate choice for developing countries. His appointment doesn't send a signal to developing countries (from the U.N.), that 'we have come to a moment where we want to change'."

Yet, the world must change, say Karki, Adaba, and other critics of corporate-led globalisation. They see the protests that now routinely accompany international financial and trade conferences, and summits of corporate and government leaders from wealthy countries, as ample proof that millions of people around the world view the market - as currently designed and imposed - as a hostile and exclusionary force.

Camdessus was supported in his bid to head the FfD by some developing countries, because of his role in debt reschedulings. In the last year or so of his tenure at the agency, he took to publicly reminding wealthy nations of their unfulfilled promises to increase aid to poor ones and urged them to open their markets to exports from poor countries. Not doing so, he argued, was tantamount to "giving with one hand but taking away with the other."

"People have the right to change,'' said Sonia Correa of Ibase, a human rights group from Brazil. ''Personally, I would rather have someone like Joseph Stiglitz", the former World Bank chief economist who in the late 1990s lambasted the IMF and last year received the Nobel Prize for economics.

At the IMF, Camdessus was a lightning rod for criticism. Shortly before his retirement in February 2000, he was struck in the face by a pie hurled by U.S. activist Robert Naiman during a meeting in Thailand organised by the U.N. Conference on Trade and Development. Naiman cited outrage with the IMF's policies under Camdessus as the reason for targeting the outgoing IMF chief.

However, the IMF also has been accused of being in lockstep with United States, which controls the single largest share of IMF board votes, nearly one-fifth. This is enough to effectively veto any significant policy shift since the IMF's charter requires an 85 percent vote in support of policy overhauls.

Preparatory talks for the FfD conference began here last Monday and are scheduled to conclude Friday. The conference is slated for March in Monterrey, Mexico.

More Information on Financing for Development
More Information on the Financing for Development Summit

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