IMF and Christine Lagarde: Change but no change?

Expectedly, for all but dreamers, naive Third World cohorts if you will, the International Monetary Fund board named Christine Lagarde managing director.

Pleasantly smiling in Paris' National Assembly on Tuesday, she accepted congratulatory greetings from her peers.

Ms Lagarde now moves from her French finance minister position to the fund's top job. In a statement, she promises to make the IMF continuingly "relevant, responsive, effective, and legitimate, to achieve stronger and sustainable growth, macroeconomic stability, and a better future for all."

Spoken like a true politician - that, indeed, she is.

Politically, Sarkozy loses his gender-balancing tough financial cop but Europe gets to keep its fit, tasty IMF June Plum! As a key player in finance among Europe's strongest economies, Ms Lagarde is at the spearhead, along with German Chancellor Merkel, of efforts to manage and control the potentially catastrophic European financial crisis into which sovereign-debt problems of Greece, Ireland and Portugal threaten to plunge it.

Her appointment represents at one level, a big change - she is a woman. Late night stand-up comedians shall no longer have the IMF to provide jokes surrounding sexual innuendo and harassment.

Rich man's club

That is a good thing; but leaving the background scandal and impetus for the change aside, the major issues remain. The IMF has always been seen as a rich man's club with its top position reserved for a European.

It is not a merit thing. Mind you, Lagarde is well qualified, but so too was her only competitor for the job, Mexican central bank governor Agustin Carstens.

That she got China's backing is a big thing. The US endorsed her candidacy too, with US Treasury Secretary Tim Geithner noting that: "Minister Lagarde's exceptional talent and broad experience will provide invaluable leadership for this indispensable institution at a critical time for the global economy."

He went on to mention that the US was "encouraged by the broad support she has secured among the fund's membership, including from the emerging economies."

The language of diplomacy, beautiful as it is, cannot mask the power of the undeclared convention of a European head of the IMF. For that to change, a more realistic acknowledgment of the new global economy must permeate the financial power corridors of Europe and America.

Geithner may speak of indispensable leadership but the question remains: leadership in what direction? To what end, and in whose vision?

The Wall Street juggernaut, completely supported by an extreme right wing of the Republicans in US politics, along with those among its lawmakers, seem hell-bent on wrecking the global economy.

They support quantitative easing by the Federal Reserve that is nothing but magnetising debt or creating money out of thin air, as some see it. They refuse to contemplate policies to help poor exploited US consumers and homeowners to give the economy a stimulus.

They play brinksmanship with the US government's debt ceiling and therefore its ability to pay its bills and they invest the words 'tax cut' with the power of Cinderella's lost slipper.

That bunch surely is not confidence inspiring. Now, Christine Lagarde was once entirely opposed to policies of that ilk. She was, indeed, one of the saner minds and voices during the 2008 Wall Street meltdown pressing for true reform of the regulatory system, at least in her public comments, appearances and interviews.

She is sharp and knowledgeable, well-qualified and politically astute. Problem: can she transcend ways of thinking governed by the old centre core and periphery world financial system that truly serves only the minority?

For that to happen, the expanded G20 of Europe, USA and the so-called emerging economies must agree on a new pact or global financial accord. Should one hold one's breath in anticipation of the change? Perhaps that would be unwise.

Wilberne Persaud, Financial Gleaner Columnist

wilbe65@yahoo.com