The IMF and colonialism

Moises Naim, a former executive director of the World Bank, identifies the stench of colonialism in the battle to choose the next director of the International Monetary Fund.

A stench of colonialism is wafting around 19th and H streets in Northwest Washington, site of the headquarters of the International Monetary Fund. These foul fumes do not originate in the fact that the powerful, wealthy 62-year-old Frenchman who until this week ran that institution stands accused of sexually assaulting a young and poor African maid in a posh New York hotel. They’re emanating instead from the strong colonial legacy that is already tainting the selection of Dominique Strauss-Kahn’s successor.

This legacy — a product of an antiquated, post-World War II bargain struck among the world’s richest countries — means that only a European can become the new managing director of the IMF, an institution owned by 187 member nations. This arrangement, which effectively discriminates against 93 percent of humanity, has enjoyed the support of the United States, the IMF’s largest shareholder. . .

Influential European columnists such as Martin Wolf and Wolfgang Munchau have argued in the Financial Times that given the IMF’s critical role in the rescue of the continent’s troubled economies, only someone with vast political contacts in the region can operate effectively there. “Certainly, no non-European could play the role Mr. Strauss-Kahn did in the eurozone,” Wolf writes. Or as Munchau puts it, “I wonder to what extent a highly competent Mexican central banker, for example, would be able to fulfill this role?” . . .

Another unwarranted assumption is that European politicians will put up greater resistance than their Asian and Latin American counterparts did to the unpopular economic measures that come with any IMF bailout — and that only a fellow European can make them see the light. So is the tacit implication that Europeans deserve gentler treatment than what the IMF proffered to the governments of South Korea and Brazil when they needed bailouts.

The stench of colonialism surrounds the IMF, not only in the process of choosing the new director but in subjecting people around the world to austerity measures in order to keep the existing empire of finance in place.

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