Zim must be interested in next IMF boss

arrested in New York on sexual assault allegations, which he denies.
“It is with infinite sadness that I present the board with my resignation,” were the words he wrote in his letter and it was anyone’s guess whether he was being sincere in saying this.
This swansong will help define the technocrat from the time he took over the IMF top post on September 28, 2007 till the present day.
Mr Strauss-Kahn is no stranger to controversy. That he has remained a high public official has more to do with the French magnanimity than his personal integrity.
In 1999, he was accused of corruption in two financial scandals related to EIF Aquitane and the MNEF, in mutual health insurance, and decided to resign from his ministerial office to fight these charges.
He was acquitted in 2001 and was re-elected in a by-election. If the French had their way, they would re-elect him after his recent misdemeanours I suppose.
Within the IMF in 2008, the board appointed a private investigation team to look into his conduct following allegations that he had an affair with a subordinate who was married at the time to economist Mario Blejer.
Despite his numerous scandals Mr Strauss-Kahn had a positive side to him because in 1997 he became the Minister of Economics, Finance and Industry till 1999.
He managed to implement a unilateral cum wide privatisation programme, which included an IPO for France Telecom.
This created about 300 000 jobs in 1998, a level which was last seen in 1969. His background has an African bias since his mother was a Sephardic Jewish from Tunisia and this made him consider Africa an important continent though it was untenable to fight poverty directly due to the fact that he was not from the World Bank.
His past sexual escapades have shown that the French are forgiving and they might be willing to forgive him come election time next year.
The French lawyer, economist and politician, who is a member of the French Socialist Party, is tipped to win a ticket for presidential candidate for the party.
Some might be pessimistic on his political star but I see him surviving the dry patch.
At one point, he sought the nomination in the primaries to the Socialist presidential candidacy for the 2007 election but was defeated by Segolene Royal in November 2006.
So as the sun has set on Mr Strauss-Kahn ‘s IMF career the world is watching with interest as the race to appoint a new managing director is heating up.
Several names have been suggested with African, Asian and Middle East countries tipping their own nationals to land the post.
For starters, IMF is an institution which is responsible for balance of payments support and also to lubricate the international financial system.
When Strauss-Kahn came to office, he had the unanimous support of the 27 European Union nations, United States of America, China and most of Africa.
He replaced Spain’s Rodrigo Rato. If such countries are to say no to another European appointment, I’m sure there won’t be any discrimination at play.
As much as the appointment of an African or Asian will not change the IMF’s relationship with Zimbabwe, the coming in of a national from our continent will, however, definitely induce confidence on Zimbabwe in the world markets.
The reason why this Bretton Woods institution won’t help us is because of the presence of legislation such as the Zimbabwe Democracy and Economic Recovery Act.
It forbids the sitting boards of World Bank, IMF, AfDB and other multilateral institutions from lending money to the Zimbabwean Government regardless of who is at the helm.
However, it is such Bretton Woods institutions which impacts on the confidence index of the nation, their country visits can determine the pace and trajectory the economy is bound to follow.
With a capital account, which is distressed and with chronic shortage of cash in the economy, Zimbabwe needs to integrate more and more into the world’s banking cycle.
The absence of a lender of last resort and compromised interbank activity increases the opportunity cost of not having a healthy relationship with the multilateral institutions.
So it will be in our best interest if the next IMF boss is to come from our part of the World.
The names, which had been thrown around for the IMF top post include that of South Africa’s former finance minister Trevor Manuel, Singapore Finance Minister Tharman Shanmugaratnam, Turkey’s former Economic Affairs Minister Kermal Dervis and France’s Finance Minister Christine Lagarde.
With Russia and South Africa supporting the next boss to come from the emerging markets, it is highly impractical that their demands will be met.
Germany Chancellor Angela Merkel has been so blunt in her support of the tradition to be retained. The fact that it is coming from the Europe’s biggest economy’s number one resident dismisses any iota of hope Africa might have of seeing a change of culture.
Looking at South Africa’s choice I am certainly not sure if Trevor Manuel is qualified for the post since his rise to the top job in South Africa was met with mixed feelings.
His achievements in his homeland are quite outstanding. However, his profile is not convincing for such a top job.
China is definitely keeping a close eye on the happenings at the New Hampshire, at the height of the financial crisis. They lend the institution more than it lends out to its member countries which will definitely give them a voice on senior appointments at the institution.
However, given its current standoff with the USA, the latter cannot afford to allow the Asian giant to sway the vote on the next IMF boss especially with accusations of currency manipulation being levelled against China’s yuan.
At the same time, the Western countries will look at the founding of the Bretton Woods institutions and see it as a basis for their emotional attachment.
This therefore strengthens the chances of Mrs Lagarde taking over the reins at the Fund especially considering her impeccable record in her management of the French economy.
With China holding foreign reserves of more than US$2 trillion which is enough to buy all the properties in London, it is definitely going to be a huge victory if the West is to appoint their own again.
Thank you and God bless.
l Christopher Takunda Mugaga
Head of Research
Econometer Global Capital
[email protected]
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