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Et tu, Brute

So even Alastair Darling has turned against Gordon Brown for the IMF job. But what is disturbing about all the jockeying and jostling now going on is the focus on the wrong criteria. This is not a position – ‘the world’s banker’ – to be decided on the basis of personality incompatibilities (Cameron-Brown) or on whether the successor should be appointed from the same country (DSK-Lagarde) or whether the appointment should follow the switch of economic power to the East and South (Carstens-Manuel) or whether the Eurozone crisis should commend or disqualify an EU candidate for the job, or whether the IMF remains the fiefdom of the Europeans to balance the Americans at the World Bank.

The criterion should exclusively be whether a candidate supports the badly needed reform of the IMF and the right policies, not only to resolve the problems of the Eurozone, but also to reject a business-as-usual approach to global economic recovery in favour of a more far-sighted alternative to the busted neoliberal capitalist model. On those criteria the current favourite, Christine Lagarde, is the wrong candidate.

She is the full-blown monetarist candidate, which is why she appeals to Hilary Clinton, David Cameron and Angela Merkel. Lagarde is a former lawyer with no background in economics, and largely a cipher of Sarkozy who has left virtually no imprint of her own on French economic policy. Her deadening fiscal conservatism led her to fluff her one big challenge of how to handle the Eurozone crises in Greece, Ireland and Portugal. First she (true, like others) sought to impose punitive and unrealisable conditions, then she was forced to back down and participate in the €700b financial stability mechanism which was still inadequate. Having initially opposed any restructuring of the Greek debt, when this proved untenable she changed tack and agreed a new bail-out but with similar austerity conditions which had made the first bail-out fail. Now she supports the idea that Greece should be made to pay off a large chunk of its debts by privatising €50b of its assets and selling them off to Chinese buyers. Not a very distinguished record for a candidate for the top job at the IMF!

Who then should get the job? One is tempted to say, anyone but Lagarde who would represent the reincarnation of pre-2008 neo-liberal economics. Either Agustín Carstens, Mexico’s central bank governor, or Trevor Manuel, the former South African finance minister, would be better. Manuel in particular would be much more sensitive to the need to switch the IMF away from the Structural Development Programme strait-jacket imposed on all developing countries to make them fit the Western-dominated Washington Consensus model, and to construct a much more equally balanced world economic development model. My vote (if I had one) would go to Manuel.

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