Why Gordon Brown can’t run the IMF

By Felix Salmon
April 19, 2011
IMFC, for many years, and he would love to take the top job of managing director.

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Gordon Brown is very comfortable at the IMF. He chaired its most important committee, the IMFC, for many years, and he would love to take the top job of managing director. There might be a vacancy soon, if the incumbent, Dominique Strauss Kahn, steps down to run for president of France. But it won’t be filled by Brown, now that UK prime minister David Cameron has made his opinions crystal clear.

Mr. Cameron told BBC Radio 4′s Today program: “I haven’t spent a huge amount of time thinking about this. But it does seem to me that, if you have someone who didn’t think we had a debt problem in the UK, when we self-evidently do, they might not be the best person to work out whether other countries around the world have a debt and deficit problem”.

He added: “Above all what matters is the person running the IMF someone who understands the dangers of excessive debt, excessive deficit, and it really must be someone who gets that rather than someone who says that they don’t see a problem.”

Mr. Cameron also said: “I certainly don’t want a washed-up politician from another country. It’s important that the IMF is led by someone extraordinarily competent.”

He suggested that the next IMF head could come from “another part of the world”, such as China or India. By convention they are usually chosen from European countries.

All of this is exactly right. Brown comes with way too much baggage: he’ll never be able to admit that enormous chunks of what he did as Chancellor turned out, in hindsight, to be disastrous.

The head of the IMF has to deliver tough news about debt and deficits to heads of state around the world — and Brown simply has no credibility on that front. And his diplomatic skills leave something to be desired as well.

More generally, it would be crazy to appoint a European to head the IMF right now, just as the biggest sovereign crises in the world look set to take place in Europe. If the IMF itself wants credibility, it must appoint a non-European to provide independent leadership in an era when the IMF will surely be asked to help bail out troubled European sovereigns.

It long since time that the head of the IMF stopped being a European. If and when DSK leaves, let’s replace him with someone highly qualified — someone who wasn’t a partial cause of the last financial crisis — from elsewhere in the world. It doesn’t really matter where, just so long as it’s not Europe or the U.S. Gordon Brown should be disqualified on both counts.

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10 comments so far

Compare Cameron’s vast credibility – look at the results of his austerity program – about as disastrous as many of us predicted they would be.

Posted by 3oosion | Report as abusive

Felix, all of this is not exactly right. Cameron says:

“Above all what matters is the person running the IMF someone who understands the dangers of excessive debt, excessive deficit, and it really must be someone who gets that rather than someone who says that they don’t see a problem.”

This is not statesman-like olympian and objective insight – this is Cameron sounding off on his own not very-well informed ideological prejudices. A whole slew of major economists think that Cameron’s attitude to debt and deficit is deluded and may possibly be extremely damaging to the UK economy. There may be any number of good reasons why Gordon Brown should not head up the IMF – David Cameron’s assessment of his macroeconomic competence is not one of them.

Posted by seanmatthews | Report as abusive

I don’t agree with the Tory lie that “large chunks of what Brown did turned out to be disastrous”, because it’s a ridiculous lie.

But you’re right that he’ll never be a plausible head of the IMF, because David Cameron decided even before the 2010 election that his party line for the UK’s financial problems was to lie that they were Gordon Brown’s fault, and shows no signs of letting up on that lie. That kind of tension between the MD and a major member couldn’t ever be workable.

Posted by johnband | Report as abusive

Anyone who disagrees with Cameron’s prescription of bleeding and leeches is unfit to run the IMF, it seems

Posted by johnhhaskell | Report as abusive

If we get rid of a European as always the choice for head of the IMF then let’s also get rid of the ‘Americans only’ selections for the World Bank – such as a Brazilian or a Russian? Surely the lack of attention to detail of the American financial sector that led to the sub-prime crisis disqualifies them as much as Gordon Brown’s rescue of the situation excludes him?

I now await a barrage of hostility from American financial people who can never see things from anyone else’s point of view.

Posted by FifthDecade | Report as abusive

*who really understands the IMF and its process of non functionality – it was the IMF that killed the Copenhagen Accords “because they did not have the expertise” to understand the environment. The IMF is a US controlled vehicle, that is run by bureaucrats. I think Brown would be the perfect guy to run it. Not only does he have some inside clout but he understood what Lester B Pearson indicated back in 1956 when he proposed the.7 %of GDP for International support mechanisms (actually it was 1% but no one reading this would be aware of that detail and its distinction – not being elitist in this information – but if you were aware of what I point out – you would be in the .oooooo1 minority of economists.

Posted by Peacemaker2012 | Report as abusive

Given the balance of power in the world I think the US should give up the world bank before the Europeans give up the IMF, but anyway Mr Cameron’s characterisation of Mr Brown in simple political poison.

It is no good talking about a list of people unqualified for the job. Perhaps you would like to mention someone you think would be a good choice? Zhou Xiaochan?

Posted by Dafydd | Report as abusive

The boom and the deficit were both apparent ahead of the UK’s general election in 2005. Mr Brown’s pro-cyclical deficit spending was already conspicuous. I remember the OECD pointing out the folly.

Did the IMF? A challenge for it’s next leader is to be impartial of it’s member governments and tell their voters plainly how things are.

Good idea about Mr Zhou.

Posted by Harry_Pilgrim | Report as abusive

@FifthDecade

“lack of attention to detail of the American financial sector” ??

Sir, DETAILS?!! The US Americans who gamed the entire event got what they wished for!!

Posted by warren_currier | Report as abusive

Yeap, it is all politics. Brown left a fantastic legacy of no boom and bust, very low debt, strong currency, great record of GDP growth and a bullet-proof financial system. I didn’t even need “A whole slew of major economists” to tell me that. And he clearly is not responsible for any of the issues that the UK that the UK doesn’t have anyway. After all he was merely in charge of the economy for 13 years, not nearly enough time to have any impact whatsoever, apart from the positive impact which is all due to him whilst clearly the non-existent negative impact, that only lying political opponents that can’t grasp his innate genuius claim exist, are all down to everyone else.

Just goes to show you can fool some of the people all of the time.

Posted by Danny_Black | Report as abusive
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