- Sanjay Sharma
- Maastricht
- Netherlands
Ex Director, Maastricht University India Institute, Maastricht University
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High time that IMF be headed by a candidate from emerging economies?
Traditionally IMF head has been a European. Now could be a good time to democratize this international institution and make it relevant in the changed/changing economic environment in which the pivot of global finance and economy is shifting towards newly emerging economies.
Sanjay Sharma
Nice to see all nice comments and ideas. I just read this article by Roubini; thought you might like it in connection with the question. Something more to think about who can help as leader in this organization.
http://www.slate.com/id/2294207/pagenum/all/#p2
Lindsay Newland Bowker 50+
.thanks.great article.
those little piigs got no market.
..will be interesting to see what happens.and how it effect the EUand the IMF
want to make a bet????
The World Bank will be in this somehow.
(Sanjays link is about the apparently irresolveable debt crisi in the PIIGS..Portgugal, Italy, Ireland, Grece and Spain)
Debra Smith 200+
If it is a silly idea, just ignore this.
Salim Solaiman 50+
Lindsay Newland Bowker 50+
Didn't mention the IMF or World Bank by name but very encouraging that tese two institutions will have to redaically reorganize themselves and change their whole orientation to the osuthern hemsiphere,
Riht mow the head is irrelavant as long as the funadmental structure and policy remain sin place.
Salim Solaiman 50+
Debra Smith 200+
(I ask as a learner.)
Salim Solaiman 50+
Just hypothetical example , say if we send someone very good to lead Libya in it's current condition with out changing the fundamentals of it's country and goverment , what will be the result after sometime , you think ?
Leader's job is to give direction and vision (at times s/he might apply "lead by example" but that's not necessary). For execution of he needs a good team that trusts her/him and follow. Well you might say , thats leader's job to influence , yes it is that's why Leaders hand pick their teams both in political and business arena once s/he is in helm to execute her/his vision the way s/he wants.
(I am also a learner Debra..........)
Lindsay Newland Bowker 50+
so you & salim & I and others here who also din't know that much about the iMF are doing good work here and this conversation is achnace to bring these important wold isues tot he attention of the Ted Community.
Many nay excellent links have been provided above. The woodward one is excellent if you didn't already read it.
PrseidentObama's speech today, an inspiring speech that has given me much hopem, seemed to refernce the need to rebuld these institutions from scratch..
No leader could make a difference at IMF..because of its very structure and how votes are cast etc. not toention its entire charter and focs for donkey's years.
Sanjay Sharma
http://edition.cnn.com/2011/OPINION/05/19/saez.imf.developing.world/index.html
Lindsay Newland Bowker 50+
. Your question seems to assume that the overall revamping in strategy and purpose , the overall rehabilitation of the IMF would naturally follow from that. But without a formal reorganization control would not change because of the way the voting blocs work. Also without a concurrent simultaneous revamping of the World Bank ( they are twins joined at the hip) I'm not sure how much a change in head alone will benefit the developing and undeveloped nation sof the world.
Or have I assumed too much here? I assumed that the purpose for seeking a non EU leader for the IMF was to effect a radical and desperately needed change in how the IMF treats undeveloped and developing nations. Was that not the point of your premise?
Salim Solaiman 50+
Lindsay Newland Bowker 50+
I see them as really different subsidiearies in the same big corporation..same phiosphies, same goals,,idistinguishable really and very much in synch with each other.
am i wromg?
Comment deleted
Lindsay Newland Bowker 50+
Lindsay Newland Bowker 50+
.www.g24.org/pbno2.pdf
Here is one quote that underscores the importance of Sanjay's question.
"The resulting concentration of power in the hands of the developed country governments, in an institution whose policies almost exclusively impact on developing countries, has seriously limited the Fund’s effectiveness, legitimacy and credibility."
.
"
Debra Smith 200+
Mohamed El-Erian, Egypt
Stanley Fischer, Israel
Gordon Brown, UK
Kemal Dervis, Turkey
Peer Steinbruck, Germany
Montek Singh Ahluwalia, India
Christine Lagarde, France
Agustin Carstens, Mexico
Trevor Manuel, South Africa
Axel Weber, Germany
I would be very interested to know your perspectives on them and whether anyone here has a preference
Sanjay Sharma
BBC also cannot help but suffer from shotsightedness. The best way to choose would be to ask a question: why Europe led IMF so far? If the answer is the same as it was before, then let it continue. If not, then delete all the names form the list. No bias no napotism :)
Debra Smith 200+
Lindsay Newland Bowker 50+
.",Global policies are discussed and decided behind dosed doors by exclusive groups, such as the GS, OECD, the Bank of International Settlements, the World Bank, the International Monetary Fund, the World Trade Organisation and others. These agencies are reinforced by informal networks of high officials and powerful alliances. Together they have created what can be seen as dominant and exclusive institutions of world government. All too often they are influenced by transnational corporations which pursue their own world strategies These agencies of actual world government must be made accountable. If there are to be global policies, let them be answerable to the peoples of the world. We want to know what decisions are being taken and why. We want the decision takers to know they are answerable to the public in every country which feels the breath of international bodies.".http://www.iheu.org/node/352
So in a way the desire expressed in your question Sanjay,is asking the IMF to rebuild and recast itself from the ground up to benefit of all peoples of the world when in fact they exist to keep the rest of the world accountable to the interest of a few. to the interests of the global plutonomy. The IMF was created to be governed by EU interests. It wasn't formed to be a world body in service to the interests of the world. So how would that democratization come about?
Lindsay Newland Bowker 50+
Lindsay Newland Bowker 50+
Debra Smith 200+
Lindsay Newland Bowker 50+
Debra Smith 200+
Salim Solaiman 50+
We had U Thant, Kofi Annan & now Ban Ki Moon heading UN did that make any difference at all ?
Sanjay Sharma
Good point, but regarding the UN heads from non-mature economies, we know that the most crucial issues rest ultimately in the hands of veto powers no matter who heads the organization. Current frustration over climate change, aid-debt-trade dilemma are simple examples of how these issues go in non-decision bin as/if they do not serve the interest of the big-5, hence the quest for reform and democratization.
But our question talks about financial institution i.e. IMF (or World Bank for that matter). We know that the World Bank heads come from the US and IMF from Europe. With the passage of time, we see the gravity of global economy shifting to the emerging economies (be it manufacturing, consumption, reserve surplus, sovereign wealth funds, FDIs, innovation, employment, GDP growth rate, and so on) it might not be very constructive if the member states with little or no money dominate and act as financial managers for those with money.
Lindsay Newland Bowker 50+
Salim Solaiman 50+
You exactly came to the point to which I wanted to focus. Thanks
Being from a country where the funds from World Bank & IMF has been flowing since decades for so called eradication of poverty for decades with no change .... Until Dr. Younus came up with Micro-Credit concept though that also debateable for some other reason , but definitely that had some impact in generating money flow at village level. That means until something happens intrinsically , extrinsic factor has nothing to do but develop dependency on it as it is designed to do so....... just one example
The World Bank , Food for Work starts just during the harvesting time of farmers in my countrty. What does it mean ? It means after investing their hard labour, merit & small money they have when farmer is about to get a bit of return (i can't term that as profit, it's so marginal) , Food for Work program keeps price down , farmers loose what they invested and push them further down the poverty line.
I wonder a CEO from developing country or poor country how can change this game ?
Sanjay Sharma
Good point you made. But I guess the discussion is about those countries who have demonstrated that they can raise the quality of life, eradicate poverty in whatever degree. A CEO from developing country could surely change if he/she has done it at home. And there are far too many examples of such CEOs in that re-emering part of the globe :)
Key lies in sincerety of leadership, hard work and integrity of people - work ethics. Someone said long ago ' no lunches are free'... I thought, even breakfasts are not :)
Salim Solaiman 50+
As moderator you are doing great and your subject is great as well.
Ok I am focusing to a country who raised quality of life to a great extent , that's South Korea. Just giving an example of 1997 economic crash what happened South Korea. When the crash came what was the role of those two global institutions? Did they come forward to rescue ?
Many Korean Conglomerate went in the hand of US economic Giants, funds from World Bank & IMF could stop that but they didn't. Finally with a call from goverment korean ladies queued infront central bank with thier jwelleries to give it to bank so that national economy survive.
You can say 1997 is too far from 2011, I agree , but did the economic or political erena shifted to a greater extent during this time.Do you think a Ban Ki Mun in IMF or World Bank 1997 could do anything different. CEO needs his full team to support him in his execution , that's my point.
Hypothetically , just think to what will happen to highly growing & emerging economy of China if suddenly if only US / EU conglomerates in one fine morning say , no we will no more place any order to China , what will happen to numerous manfacturing factories and millions of workers ?
These so called emerging economy is not innovation based , they are just manufacturer. Marketing strength elementary , Brand equity almost zero. Only have their huge domestic market , but right that time domestic market lost purchasing capability hence consuming. Only penetrated to the lower segment of consumers global market where profitability is low.
Please don't take me wrong as I drew a gloomy hypothetical picture. I jsut drew that to show how dependent these emerging economies are on developed economy.
Not being an economic or financial expert I talked much where many thing can be wrong even, just point out those , I want take the learning opportunity being wrong.
Salim Solaiman 50+
Understand your point, I have no disagreement with you about someone to head IMF & World Bank from Emerging Economy. My worry is that there is a high possiblity the person will be acting as acted by UN head. By the way World bank started as an extended agency of UN.
Moreover who funds and controls the fund of IMF & World Bank? Funds of both are linked with world financial market and of which 5 big shareholders are France, Germany, Japan, the United Kingdom and the United States. In such scenario do you think being headed by someone from emerging economy will shape up the game any differently ?
But if s/he can really change the game that definitely will be a great achievement !!!
Lindsay Newland Bowker 50+
Many have this idea that the IMF and the World Bank are some how benevelont associtions inteded to help emerging nations take control of their own destinities, Important for evryone ti take a look themselves beyod this mythology and understand what the UN, Wolrd Bank, Nato, and IMF really are about..
Lindsay Newland Bowker 50+
my purpose isn't to bust Sanjay's dream but to look toward what I believe he dreams of with him..in support of all the undeveloped and under developed countries so poorly served by the IMF and the Wolrd Bank.
My internal gyroscope alines in only one direction
and that is towards the truth.
towards discerning truth
toward uncovering truth where it has been long hidden.
Lindsay Newland Bowker 50+
I now see that is not so. I am shocked even frightened by that. Still trying to understand it and still trying o work throgh what the EU should do about the IMF and wht the united states should do about the Wolrd bank.
For the health of our wolrd..for the sake of rights tha we hold to be for all poeple..they cannot continue to be as they have been.
I am hoping to visit thi ssoon in a speparte TED Converstaion when I have more of my facts tsraight and understand more of the history. But thnak you for telling the Ted Community that all is not what it seems to be with the IMF.
Salim Solaiman 50+
So far I know one of the big sources of fund of IMF & World Bank is Money Managers of Stock markets like Wall Street. The interest rate in matur economy like US & Europe is very low , so they lend money to World Bank & IMF as they lend that money to the third world and devloping world who needs cash flow for they survival of their economy at a much higher rate, so stock market Money Managers makes money out of that.
So it's not solely in the hand of political leadershi as well.
I don't want to demoralize Sanjay who actually having good dream , just giving some reality touch. Like Sanjay I also love dreaming, because every new thing happens starts with a dream.
Jáfia Câmara 50+
I agree. I don't see it happening anytime soon though. First world countries will make the ''emerging countries'' remain as ''emerging'' for as long as they can get away with. Hope I'm wrong.
Sanjay Sharma
I think we are witnessing a fundamental change in the global setup, thus it may just be a matter of time. So be ready for surprises in the time to come :)
Lindsay Newland Bowker 50+
Sanjay Sharma
Might sound a wishful thinking but it's not. I am positive it will change. Put it differently, there is only one way out and that is change :)
Simple reason is: time changes, situation changes, people change and thus all man-made creations need a reshaping suiting to the times OR ELSE they run a high risk of being de facto defunct. Good examples: League of Nations, G7, G8, recent debates on the reform of most of these outdated structures etc....If this were not the case, we would not have the UN instead of League of Nations, and G20 instead of G8. If you look at the definition of G8, you can see it is not what it used to be - neither the richest, not the most powerful not a proportionate representation of larger mass on the planet - all that not anymore. Same goes for the veto powers in the security council in the UN. Another one, people are already mulling over the pros and cons of an Asian Economic Union.
Human mind is by nature programed to be biased . It likes to see what it wants. But as life tells us, reality does not evolve around one's desires. So it is always confrontational for one or the other parties.
Very interesting phase we are living in :) Many interesting stories to unfold in the coming times.....
Debra Smith 200+