Based on public proclamations of support, the tally kept by the excellent global memo suggests that Lagarde already has 55 per cent of the votes – already enough to be the next IMF Managing Director. She had these before the IMF even bothered to confirm the list of candidates; and well before she’ll have to submit herself to the indignity of answering questions – in private – at the IMF executive board.
How is this possible? Three reasons; most important first.
1. IMF votes are doled out in an arcane manner that favours western powers, particularly the Europeans. This advantage is magnified because, of the 24 IMF board seats, European bums sit in eight (nine when Spain gets its turn at the rotating seat it shares with Mexico and others.) Last year they agreed – how generous! – to reduce this number by two, but that hasn’t taken effect yet, hence their indecent haste to shut down alternatives and promote their candidate while their inbuilt advantage is still so favourable.
Let’s have a look at the numbers. Three European states have permanent chairs – the UK, France and Germany – so they can stuff their votes directly into Lagarde’s box. That gives her 14.4 per cent. Four European Union seats are the chair for a ‘mixed constituency’ of states. Some, such as the Netherlands and Belgium have quite varied constituencies, including developing countries, but no matter. All that really counts is that the Europeans control the lion’s share of the votes within the constituency. And as you can’t split the vote of a constituency, they’ll cast them all for Lagarde. There’s one anomaly – Switzerland, not a member of the EU. I’ll take any odds you like that the Swiss will back Lagarde.
So the European chairs alone will deliver Lagarde 34.4 per cent of the vote.
2. The quid pro quo for a European IMF boss is an American World Bank president. Everyone knows that the Europeans felt confident in clinging onto ‘their’ IMF position because they knew the Americans would back them in order to hold onto ‘their’ World Bank position. Neither side has reformed their foreign policy enough to realise that grabbing the spoils of the multilateral system for your nation’s sons and daughters actually undermines your national interest – by delegitimising the global institutions our increasingly unsettled world needs. So we safely can add the US’s 16.8 per cent. Voila, as the French would say, 51.2 per cent, and a guaranteed winner. Without the need to consult any other countries!
3. This short-sighted stitch up has a chilling effect on everyone else. Why would smaller states back a loser? Togo – representing 22 African countries and has already come out in favour of Lagarde, small wonder, when you remember that Europeans dominate the aid business and European trade ties are powerful. And for all the carping at the BRICS’ failure to muster their own candidate, who can’t understand an attitude that says ‘let’s not bother entering a bruising contest which we can’t win; we don’t need or like the IMF anyway – why bolster its credibility?’
One thing is certain – when Lagarde wins, her legitimacy will be seriously undermined. Some are suggesting she should volunteer to only see out the remainder of DSK’s term until 2013. Of course, she may not last til then – the French court of justice may torpedo her candidacy by launching a full investigation into allegations of abuse of office in July.
This debacle is looking increasingly damaging for the precarious legitimacy of the IMF.