Benn Thinking

15 March 2006



British Minister Calls for World Bank and IMF Reform

The British international development secretary, Hilary Benn, addressed MPs and aid workers in one of the House of Commons committee rooms earlier this week. Normally, this wouldn’t amount to anything more than an excuse for a drink at Annie’s Bar afterward. Mr. Benn, however, actually said something important, suggesting that the top jobs at the World Bank and IMF shouldn’t automatically go to an American or European respectively. As a government minister, this reflects official British thinking, and it is welcome.

Under the current set up, the World Bank job goes to a Yank, while the IMF job is a plum for a European who can’t get elected in his own country. Currently, Paul Wolfowitz, who did such a splendid job getting America to attack Iraq, heads the World Bank. Rodrigo de Rato, Spain’s former finance minister, is managing director of the IMF. Never has a person with a passport from anyplace outside the US or Europe ever been selected for these positions.

Holding global capitalism to its own standards, Mr. Benn said, “Perhaps we should move towards a rules and merit-based process for appointing the senior management of all the international financial institutions. Is it really acceptable that the presidencies of the World Bank and the IMF should be restricted to European and US nationals respectively, because of a cozy deal made 60 years ago?” No, Mr. Benn, it isn’t.

These jobs are more than just sinecures for political has-beens; they are actual positions of power. To tell a highly trained Japanese economist that he can’t aspire to such a place merely because his nation was run by an aggressive military dictatorship until 1945 is plain silly. In the not-too-distant future, China will have the largest GDP in the world, and India will be following close behind. The current arrangement, though, rules out the 1/3 of humanity that resides in these nations from consideration (let alone appointment) for these jobs.

Mr. Benn, quite rightly, notes that the nations of Asia and South America (and one might add Africa, though he didn’t) could well walk out of these institutions if there is no reform. The value of these institutions is their universal membership and the legitimacy that confers. If those two linked qualities are lost, two major supports for the global economy will be undermined. One looks forward to the Government’s white paper later this year.

© Copyright 2006 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.


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