All change at the top of the Fund
News||17 June 2008|update 61|
With 13 of the IMF's 20 Washington-based departments seeing a change of leadership and its credibility and legitimacy questioned, the IMF may be at its most malleable state ever, offering managing director Dominique Strauss-Kahn a chance to put his imprint on the institution.
The voluntary retirement packages offered to facilitate the Fund's downsizing (see Update 59) were enough to convince more than 590 Fund staff members, including six department directors, to jump ship. The IMF had planned to reduce staff levels by 380, meaning it is now in the position of having to reject applications for voluntary separation and keep staff who no longer want to be there.
With the previously planned departure of the heads of the African and European departments, the announcement by chief economist Simon Johnson that he was returning to academia, and several internal moves, there is a near wholesale change at the upper levels of management. Because the deputy managing director posts are largely political appointees - the first deputy managing director is always an American while another of the three is always Japanese - department directors are the highest level functionaries at the IMF where the appointments are controlled by Strauss-Kahn. The raft of leavers means that every area department, the primary point of contact between the IMF and its member countries will have new directors this year.
Notably, Antoinette Sayeh, the former finance minister for Liberia and previously a 17-year veteran at the World Bank, will join as the director for the African department. Ezekiel Pajibo, the director of Monrovia-based NGO Center for Democratic Empowerment was sceptical that Sayeh would bring any significant changes to the much-criticised macroeconomic models pushed by the Fund in Africa's low income countries: "Dr. Sayeh is a consummate World Bank bureaucrat and would not even dare to speak any language other than what the IFIs stand for. I think she would simply carry out whatever assigned task is given her and would not advocate for nor inspire changes."
According to Vitalice Meja of Harare-based NGO African Network for Debt and Development, "for technocrats such as Sayeh to bring about any meaningful changes with regard to policy direction at the Fund, there will need to be total overhaul over the governance structure. The policy format is not a technical issue but rather a mixture of politics and power in the IMF, and Sayeh does not have the backing to shift the policy of the institution."
Other key appointments are Reza Moghadam as the director of the policy development and review (PDR) department and Oliver Blanchard as the new chief economist and research director. Moghadam has most recently been an adviser in the office of the managing director, so presumably has a close relationship with Strauss-Kahn. Before that he was the mission chief for Turkey, and was thus the chief architect of the controversial pension reforms included in Turkey's IMF programmes (see Comment, Update 60, 57). In his early career at the Fund, Moghadam authored a number of working papers arguing for more labour market flexibility in European countries such as France and Belgium.
Oliver Blanchard might be seen as a safe pair of hands for the research function at the IMF. Where Simon Johnson had been a bit of a maverick without the standard background in macroeconomics, Blanchard, a French national who is currently an economics professor at the Massachusetts Institute of Technology (MIT) is the author of multiple textbooks on the subject. But he is not purely ensconced in the ivory tower and has supported the left parties in France, writing in late 2002: "A clear commitment to the poor, to the sick, and to the unlucky, must be the message of the left. . And the left, hopefully, will return to power." Strauss-Kahn appointed Blanchard, who he has known for many years from French political circles, despite Blanchard's support for right-wing candidate Nicolas Sarkozy in the 2007 French presidential election.
Two further appointments important to civil society have not yet been announced. The new head of the fiscal affairs department (FAD) will be chiefly responsible for the Fund's advice on core macroeconomic issues such as inflation and deficit targets, which have been criticised as too conservative in low-income countries (see Update 57, 56). And with Masood Ahmed leaving as the head of external relations to become the director in the Eastern Europe and Central Asia department, the IMF needs a new spin doctor to implement the Fund's unidirectional communications strategy (see Update 57).
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Published: 17 June 2008 , last edited: 18 June 2008
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