The IMF's new head
Wanted: a French revolution
The task facing Christine Lagarde in her new job
Jun 30th 2011 | from the print edition
DESPITE all the talk of an “open, merit-based and transparent” contest, there was little reason to doubt that Christine Lagarde—France’s finance minister, a former head of a big global law firm, and one-time member of her country’s synchronised-swimming team—would get the top job at the IMF. The European Union, whose members control around a third of the votes on the fund’s board, had united behind her as soon as she entered the fray.
Emerging markets made much of their desire to see a non-European take the job but conspicuously failed to rally around her only rival, Mexico’s Agustín Carstens. All that remained was for America formally to throw its weight behind Ms Lagarde. It did so on June 28th, and soon after the fund’s board confirmed that she would be its 11th managing director.
In most ways, her appointment is in keeping with past practice. Like all ten managing directors who have preceded her, Ms Lagarde is European and got the job largely because of support from the fund’s rich-world shareholders. But there are some differences as well.
Ms Lagarde will be the first woman to run the IMF. Given that the position opened up because the fund’s last head, Dominique Strauss-Kahn, was charged with attempted rape, this is no bad thing. More importantly, and unlike previous IMF bosses, Ms Lagarde takes the job when Europe itself is the fund’s biggest client. Establishing and maintaining her independence from her former euro-area colleagues—whose support was crucial to her landing the role—will be a more important task for her than for her predecessors.
That will determine whether she succeeds in fulfilling the vision she outlined in her first official comments after being selected. In those remarks, Ms Lagarde stressed that she would seek to ensure that the IMF was “relevant, responsive, effective and legitimate”. On the first two counts she should have a relatively smooth ride. The IMF’s relevance may have been in doubt during the boom years but the crisis has seen it return decisively to centre stage. Contributions from its members have tripled its pre-crisis lending capacity, which now exceeds $750 billion. This increased firepower has allowed it to respond swiftly in 22 countries since the crisis. Having more money has also enabled it to offer financing on more flexible terms than before.
The linked goals of effectiveness and legitimacy are harder to achieve. Success here will depend on the degree to which the IMF under Ms Lagarde is able and willing to act independently of its biggest shareholders. To be an effective institution, the IMF needs to tell governments awkward truths about their economic policies. But countries are unlikely to heed its advice unless they believe in its impartiality.
Many of its poorer members regard it as an institution dominated by the views of richer countries. The manner of Ms Lagarde’s selection will give them little reason to change their minds. Nor will a recent assessment by its own internal watchdog, which reckons that the IMF’s economists feel “pressure to align their conclusions with IMF views”. To change this perception of bias into one of even-handedness, Ms Lagarde will have to lead by example.
Her biggest challenge will be the euro-area debt crisis. Many emerging markets are troubled by the IMF’s willingness to lend large amounts of money to struggling European states, arguing that it would have been less generous to non-euro-area countries in similar circumstances. The amount it has agreed to lend to Greece, for example, is about 24 times the amount Greece contributes to the IMF. In contrast, countries like Ukraine and Pakistan have received about seven times their contribution. The $111 billion the fund has agreed to lend Ireland, Greece and Portugal is twice the combined size of its 19 programmes with non-euro-area countries. Critics argue that this amounts to an unusual concentration of risks in a single region, with damaging consequences should one of these countries default.
Matters could get more complicated still if Greece fails to live up to the terms of its agreement and the fund and the EU disagree on the way ahead. Should that happen, Ms Lagarde would need to push the IMF’s point of view in negotiations with her former colleagues, perhaps to the extent of arguing that an orderly restructuring of Greece’s debts is preferable to imposing further austerity measures on its people. Given that Ms Lagarde has so far been firmly in the anti-restructuring camp, it remains to be seen how well she could make that switch. A new proposal on rolling over privately held Greek debt, which does little to solve Greece’s problems but has the backing of the French government (see article), will provide an early test.
Ms Lagarde may also have to confront her backers in Europe if the IMF is to achieve longer-term goals. One of the most important is persuading emerging economies to rely on the fund’s resources, rather than their own reserves, in times of crisis. By doing this, and more generally by influencing countries to adopt more sustainable economic policies, the fund seeks to reduce the macroeconomic imbalances that many argue lay at the heart of the global financial and economic meltdown. But this, too, relies on convincing emerging economies to trust the fund.
They are unlikely to do so as long as they continue to be under-represented at the IMF. Despite some changes that were agreed upon during the tenure of Mr Strauss-Kahn, countries like China, Brazil, India and Russia have far fewer votes than their economic heft merits. But remedying this requires over-represented countries like Belgium and the Netherlands to agree to cede more votes to emerging economies than they have thus far been willing to. Ms Lagarde’s formidable negotiating skills and political savvy should help; so might her proximity to and rapport with the European establishment. If she uses those advantages well, that would go some way towards justifying yet another European at the helm of the IMF.
20,3
It is hard to reform, but it will come sooner or later. Europe is a powerful group that can be a threat to the US, so its status should be supported in some way. The reform should not only be taken in IMF, but it should contain more in many different aspects, including other organizations like World Bank. I hope Ms Largarde will bring us something different. And I expect Mr Zhu Min will be vice president of IMF.
Congratulations to Ms Lagarde as the first woman to run the IMF. It is shocked to me that the difficult process to win the selection. Unlike her previous IMF bosses, Ms Lagarde takes the job when Europe itself is the fund’s biggest client. In that case, she will have a more important task for her than for her predecessors. Whether how you get the position , I show my respect to her and sincerely wish that she can copy with anything successfully.
Her biggest challenge will be the euro-area debt crisis. Many emerging markets are troubled by the IMF’s willingness to lend large amounts of money to struggling European states, arguing that it would have been less generous to non-euro-area countries in similar circumstances.
55,55
Fair is a nice word, people are willing to listen and make it a propaganda. Inequality is seen everywhere across the globle, let it be a international institution or SMEs. One way to break this is to be open to the outside. Sunlight is the most important disinfect, everyone knows this, but how to do it and what measures shall be taken is another story. Hope this new chief of IMF will lead a good example as to show real fairness, rather the superficial things and acts.
one-time
adj. 一次的, 以前的
synchronised
v. 使, 使同时, 使同速进行
adj. 双人
fray [frei]
v.恼火, 紧张
v.磨损
n.吵闹, 吵架, 争斗
n.磨损处
enter the fray
参与
投入
throw its weight behind
鼎立支持
firepower ['fai??pau?]
n. 火力
heed [hi:d]
v.注意, 留心
n.注意, 留心
impartiality ['im?pɑ:?i'?liti]
n. 公平, 无私, 不偏
watchdog
监督部门
舆论监督
看门狗
监视人;忠实的看守人
even-handedness
刻意采取的等距，不偏不倚
lead by example
以身作则
Ukraine [ju:'krein]
n. 乌克兰
live up to
遵守，实践(诺言等)；符合，不辜负
on the way ahead
前进的道路上
camp [k?mp]
n.野营, 帐篷, 营地
vt.宿营, 露营, 扎营
n.做作
adj.娘娘腔的,做作的
vi.做作
roll over
翻滚, 延缓付款, 滚动还债
confront [k?n?fr?nt]
vt.遭遇；勇敢地面对，正视；使对质
meltdown ['melt?daun]
n.熔毁, 灾难, 崩溃
heft [heft]
n. 重量, 分量, 重要性
vt. 举起试重量, 举起
cede [si:d]
v. 割让(领土, 权利)
v. 放弃
formidable [?f?:mid?b?l]
a.可怕的；难以克服的，难对付的
savvy ['s?vi]
v.理解
n.理解能力, 悟性, 常识
adj.机智的,有常识的
proximity [pr?k'simiti]
n.接近, 亲近
rapport [r?'p?:t]
n.关系, 亲善, 一致
establishment [i?st?bli?m?nt]
n.建立，确立，确定；企业，机构；当权人物
at the helm of
掌握着
tenure [?tenju?]
n.终身职位；任期；(土地)保有权，保有期
Ms. Lagarde was elected as the head of IMF with around a third of votes from firmly backed EU and the United States. Her challenge is obvious, especially on the point of fairness. Those who backed her strongly want to get more benefit from her policy, and other non-European countries long for more votes in IMF.
It is apparent that Ms. Lagarde will take the interests of EU first, not to mention that it used to be like this. But if she takes too much unequitable terms between the EU and non-Europeans, the latter are sure to unite to confront the European dominated IMF next time, maybe the helm will be taken over by someone in China, Japan or US. It’s not an easy task for Ms. Lagarde to find an equilibrium point, especially when the European sovereign debt crisis is approaching.
57,57
At least she will not be charged with attempted rape( just joking ) ~hha
what challenges her is that how to allocate the limited cake to better meet the masses. a title means a responsibility```
besides ,I expect Mr Zhu Min will be the vice president of IMF.
Ms Lagarde stressed that she would seek to ensure that the IMF was “relevant, responsive, effective and legitimate”. On the first two counts she should have a relatively smooth ride. The linked goals of effectiveness and legitimacy are harder to achieve. Success here will depend on the degree to which the IMF under Ms Lagarde is able and willing to act independently of its biggest shareholders.
Whatever the leader is an Asian or Latin, the US and its allies would still dominate the world order.
The rule is made by them, we have no choice but to obey under protest
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