Headquartered in Washington, the IMF has a staff of some 3,000. It holds $90 billion in outstanding loans to almost 90 countries and plays an important role in defending imperialist property holdings and investments, especially in the Third World. In particular, the IMF promotes the prerogatives of U.S. capital.

The formal decision as to who the managing director of the fund should be has been left to the European imperialist powers. Michel Camdessus, a Frenchman, has retired after 13 years in the post. American Stanley Fischer, who has run the day-to-day operations for years, is acting director.

The main candidate put forward is Caio Koch-Weser, a longtime World Bank official who is currently the state secretary in the German finance ministry. After a long silence greeted his nomination by the German government, the European Union gave a lukewarm endorsement to his appointment. The French government, for example, issued a statement saying it would not block Koch-Weser for the seat.

[As we go to press, U.S. president William Clinton rejected Koch-Weser for the post, leading the Financial Times to observe that "it is barely conceivable that a candidate could win over the opposition of its (the IMF's) largest shareholder." Fisher, and Eisuke Sakakibara of Japan, are the two other nominees now on the table.]

The Financial Times of London said in an editorial it would be a mistake to appoint Koch-Weser. "The key task for the new managing director," the big business newspaper said, "is to take the IMF in precisely the opposite direction.... It needs a new leader who can refocus its role on macroeconomic surveillance and managing financial crises."

This is the same position put forward by U.S. treasury secretary Lawrence Summers, who outlined a major shift in December. He proposed the IMF stop long-term loans and only focus on short-term lending to countries facing currency crises or other financial emergencies.

The proposals by Washington to alter the IMF's role reflects the growing disorder of capitalism, in which IMF demands for austerity in countries such as Indonesia and south Korea have deepened economic turmoil and led to increased resistance by workers and peasants there. It also reflects the inability of IMF loan practices to make any headway in overturning the workers states in Russia and throughout eastern Europe.

Concerns over Koch-Weser's candidacy have also been expressed by some South American countries, according to the Financial Times. Among the alternatives who have been mentioned are Fischer and Jacob Frenkel, former chairman of the Israeli central bank.

German Chancellor Gerhard Schröder has argued that his country should take a role in world affairs which better reflects it economic weight. The truth of the matter, though, is that banks in Germany hold more than 40 percent of the outstanding loans to Russia, a much bigger proportion as compared to banks in other imperialist countries. German banks are also a main creditor in the third world, especially in Asia. What is at stake for German imperialism is that if Washington's proposed policy shift for the IMF is put into effect, German banks will have a harder time getting payments from their debtors in these countries.

For example, on February 12, the London Club of international commercial creditors reached an agreement with Russia to write off about one-third of its $32 billion private sector debt left over from the Soviet Union. This spurred hope in Moscow that the Paris Club of official creditors will also write off a large proportion of its $42 billion debt to foreign governments. The German government holds about half of the Soviet sovereign debt and has strongly opposed a big write off within the Paris Club, arguing that Russia is a naturally rich country that is unwilling rather than unable, to service its obligations.

Another example of the seriousness of the interimperialist rivalry over the future role of the IMF is that Paris, although it sees the Berlin-Paris axis as the core of the EU, is floating the idea of an informal poll of IMF members to test the support for Koch-Weser.

Revelations indicating the Ukraine misled the IMF on how it used its foreign currency reserves in 1997-98 was seized on by U.S. Congressman Jim Saxton, vice-chairman of the joint economic committee, to press for the changes advocated by Washington. Saxton said the evidence shows "the IMF's traditional 'hear no evil, see no evil' approach continues to raise questions about the IMF's stewardship of taxpayers' money."

The New York Times noted that the Clinton administration does not regard Koch-Weser as having "the right résumé to carry out such changes." Given the tentative green light in Europe, the United States, it says, "will have to choose between accepting Mr. Koch-Weser or using its standing at the IMF to oppose him, perhaps in alliance with some developing countries. Washington would have to weigh the importance of finding what it considers an ideal candidate for the post against the cost of straining relations with European allies."

Carl-Erik Isacsson is a member of the Metalworkers Union in Södertälje, Sweden.  
 
 
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