Money Is Power An Inside View of the IMF's Massive Global Influence
Part 4: Shedding Its Image as the Headquarters of Hardcore Neoliberalism
An IMF director leads a glamorous life. There is only one photo hanging on the wall in Strauss-Kahn's office in Washington. It depicts Strauss-Kahn and US President Barack Obama, smiling congenially like two boys in the same sports club.
Now Strauss-Kahn is sitting in seat 4F, a window seat, on an Air France flight from Paris to Oslo, on his way to one of those conferences with interchangeable names. The title of today's meeting is: "The Challenges of Growth, Employment and Social Cohesion." Strauss-Kahn falls asleep as the plane taxis toward the runway. He is a weary globetrotter, a man whose life consists largely of trips and flights from one time zone to the next, a brutal life that only someone who believes in himself can endure.
The IMF is hosting the Oslo conference jointly with the United Nations' International Labor Organization (ILO). This pairing is significant, because the IMF and the ILO are natural enemies, "like dogs and chickens in one room," says Strauss-Kahn. The Fund pushes through reforms against social opposition. While the ILO is on the side of those who organize the protests at the World Social Forum, the Fund has consistently been the target of the greatest amount of popular rage. It has repeatedly been described as an evil, anonymous power that does its utmost to prevent a different world from taking shape.
'We Need New Fuel'
At 10 p.m., Strauss-Kahn asks the SPIEGEL reporter to come into the lobby for a brief conversation. He looks cleaned up, almost fatherly, speaking in a pleasant voice that's part of his capital, along with his wrinkled face and the bags under his darting eyes.
He emphasizes the importance of the conference with the ILO, and says that it shows that the IMF isn't merely concerned about macroeconomics, but also about social issues. The crisis, says Strauss-Kahn, isn't over yet. "We need new fuel to get out of the crisis," he adds, pointing out that growth isn't the only key element. "Growth without jobs will be no good," he says, and insists that "jobless growth" must be avoided. This explains the meeting with the ILO. "We have changed. The unions have changed. Of course, we still don't necessarily love each other, but we're talking with each other and we're learning from one another."
Never before has an IMF director spoken this frankly. Before Strauss-Kahn, the IMF was a factory that spat out blueprints which national governments were forced to implement, without objection, if they hoped to receive IMF loans. A country that refused to fulfill the conditions, even if it did so because it feared the social repercussions, was thrown off the credit merry-go-round. The Asian countries, in particular, turned away. The crises in Central and South America remained unresolved for a long time, and anyone who wanted to malign the IMF simply had to mention the word "Argentina." Before the 2008 crash, the Fund had both an image and an identity problem. Many people asked whether the organization even served a purpose anymore.
As of late, DSK has been publicly thinking about making the social consequences and costs of reforms a part of the IMF's programs. This has already become a reality in the case of El Salvador. Under Strauss-Kahn, the IMF, which has always been criticized for pursuing a one-size-fits-all policy and ignoring the unique aspects of individual countries, is beginning to embrace the complexity of globalization. "Some have some fiscal and monetary room to maneuver, others don't. Every country is different, every situation is unique," says Strauss-Kahn.
Transforming the IMF
This is the IMF director's program: He wants to transform the organization, which used to structure its reform programs with a rigid view toward interest rates, taxes and currencies, into a task force that can offer advice, analysis and money to countries in trouble. The IMF wants to shed its image as the headquarters of hardcore neoliberalism.
Blanchard laughs, perhaps a little artificially, when he is asked about these plans. He says that they do not exist, and that the IMF develops as a result of its everyday activities. "What you're saying sounds almost like a conspiracy," he adds. He is standing on the 35th floor of the Radisson Plaza in Oslo, holding a plate of finger food in his hand. "Of course there is a new line," he says. "We want to be open, honest and skeptical."
When he speaks French and not, as is so often the case, English, he seems even more sincere than he already is. Blanchard is not adept in the use of political rhetoric, and of the clichéd sort of language the French call "langue de bois," or "wooden speech." He also doesn't shy away from addressing the Greek problem. A few days after the Oslo conference, an IMF team will leave for Athens to get a first-hand look at how the Greeks are managing their crisis. Greek Prime Minister Georgios Papandreou is also in Oslo. He looks older. He talks about Greek pessimism, which he says is "fundamental" for the crisis. What would happen if the IMF team returned from Athens to report that Greece is a lost cause?
Blanchard could say something superficial, but he addresses the question directly instead. "We certainly wouldn't simply release that information to the public," he says. "We would have to reconsider and negotiate with everyone involved to find a passable solution."
The Fund cannot afford a failure of the Greek bailout. Through Greece, it has gained a foot in the door of the First World, and if the IMF hopes to become the new world organization for economic policy, a thinking army to implement G-20 decisions, then now is the time. If Greece defaults, it could turn into another Argentina for the IMF.
- Part 1: An Inside View of the IMF's Massive Global Influence
- Part 2: From Capitalist Mean Machine to Think Tank
- Part 3: Instant Flows of Cash
- Part 4: Shedding Its Image as the Headquarters of Hardcore Neoliberalism
- Part 5: Dropping 250 Billion over Europe
- Part 6: 'The End of Begging'
- Part 7: 'A Greek Bankruptcy Is Unavoidable'
- Part 8: Europe's Euro Challenge
- Part 9: 'Europe Must Reform Itself, That's Clear'