The head of one of the most powerful institutions in the world, a hotel scene, a poor and powerless cleaning maid, victim of the callous lust of an old rich man who, swayed by the might of his position, makes a sexual assault with minimal regard for the puny victim’s protests being registered beyond the room and finds himself caught and nailed. If this seems like a scene from a B-grade Bollywood slick movie, rest assured it is not. It is a real life drama enacted by the head of IMF, the “honourable” Mr Dominique Strauss-Kahn.
The IMF chief was unceremoniously removed from an Air France jet minutes before its scheduled departure from John F Kennedy International Airport amid allegations of a sexual assault on a New York hotel maid. He of course has been denying all these accusations but the fact that this is not his first transgression make his denials look like more evidence of the shallowness of his claims and character. The institution seems to find such digressions not too serious as in the previous case as well Mr Strauss-Kahn had finally admitted having a relationship with a subordinate, Hungarian economist Piroska Nagy, in January 2008.The relationship was discovered by Nagy’s husband, and the IMF had hired a law firm in Washington to conduct an investigation. But the probe concluded that the relationship had been consensual and had not resulted in favouritism. In October 2008, the IMF board decided to keep Strauss-Kahn in his current job while criticising him for a lack of “good judgement”.
The leadership at the IMF is less bothered about continuous leakages of morality and more about its timing’s impact on the future of the IMF’s great money lending run thanks to the blessed recession creating economic holes in many countries’ purses. The IMF is currently confronting one of the most critical phases in its history, as it grapples with the fallout of the economic crisis sweeping the euro zone. A Fund delegation began work in Athens to discuss with the European Commission and European Central Bank conditions for disbursing the payment of the fifth tranche of a loan to be given to Greece in May 2010. The 30 billion euro ($ 42.3 billion) loan is considered to be the largest ever granted by the institution. The IMF also needs to give the green light to a similar loan to Portugal. European finance ministers were to meet in Brussels this week for talks that Strauss-Kahn had been due to attend. Finally, the IMF board of directors was scheduled to consider a payment of the second and third tranches of a 22.5 billion euro ($ 31.7 billion) loan granted in December to Ireland. With such devastation all around, Strauss-Kahn’s arm-twisting skills to get iron-proof conditionalities were critical. France has additional worries of a political nature in this incident. Mr Strauss-Kahn was supposed to be a strong contender for the position of the next president. He has been a star lead for the Socialist Party and was predicted to give the present president Sarkozy a real run for his money in the next elections.
The leader’s philosophy and conduct reflects what the mindset of the organisation is. Every research shows that the leader’s beliefs and example builds up the culture in the organisations he heads. Thus the IMF’s leadership style and conduct is perhaps the reason for the IMF having the reputation of an institution that is more of a destroyer of the independence of small and weak economies rather than a builder of countries in the hour of need. The famous economist Joseph Stiglitz in his book, Global Discontent, has clearly declared the IMF unfit for restoring financial health in small countries. Instead of restoring health, these countries become deeply mired in debt, having serious implications for the social health of the country. Pakistan is a prime example that has sacrificed its already depleted development funds to pay off the threatening IMF demands. Thus, while the IMF is trying to arrange a multi-billion bailout for Greece, a mere $ 5 billion to Pakistan is used to twist political and economic demands that are crippling the already reeling economy. Of course the fault lies with the country for being so weak and for sustaining corrupt leaders who in order to feed their own insatiable financial lust partner with manipulative institutions like the IMF to wreak havoc in the country. A classic example of this is the continuous back-breaking tariff hikes on energy and oil sectors on the IMF say so but no action on imposing agricultural tax, which will hit most of the feudals sitting in parliament. It is this double-faced conduct of the IMF that makes its interventions inequitable and counterproductive.
The international financial institutions have been suffering a reputation creep in the last few years. Not too long ago the ex-head of the World Bank, Mr Wolfowitz, was embroiled in another scandal of Hollywood standards. Mr Wolfowitz secured this job after having been the chief architect of planning the Iraq war in the Bush administration. He had “blessed” his girlfriend Shaha Raza with a fantastic reward and benefit package in return for “services rendered”. Fortunately, the scandal became too hot to handle and he had to resign.
The race for immorality is on. Regardless of rank and age, country and culture, the story of human beings lowering themselves to levels unbelievable is more and more in vogue. Italian Prime Minister Silvio Berlusconi has been in court for his involvement with an 18-year-old. The belief that personal life does not affect public or professional life is a folly. You cannot have one character at home and another at the office. Sooner or later what you really are overtakes your title and position. The arrogance of an institution is the result of the arrogance of people governing it. For years the IMF and the World Bank have been perceived as institutions that are the instrumental bodies of the elite western countries with designs to suppress and subjugate underdeveloped countries to a level where their dependence on the richer countries makes the lesser countries give in to all demands of the money lenders. However, these institutions have fallen from grace many times. Most countries, having more honest and honourable leadership, have rejected any overtures by these institutions to come to their rescue with aid. It is really time for some genuine soul-searching in not only these institutions but countries all across the world about what the real purpose of these institutions is and what countries should be looking for while turning to these “lenders of last resort”. The criteria for choosing heads of such global institutions need to change from mere expertise plus performance ranking to really a more wholesome approach of selection based on equal, if not more, emphasis on the real character of the individual. Otherwise the eventual end of some of them may be to just provide more content for a cinematic soap opera.
The writer is a consultant and can be reached at [email protected]