Saturday, 10 March 2012

Will Christine Lagarde destroy IMF? (PO)

M D Nalapat
An international civil servant is presumed to be exactly that: international. She or he ought to function in a manner that protects universal interests, rather than focus exclusively and obsessively on the interests of a particular country or group. Sadly, some of the most prominent of such officials are guilty of the latter course. Take the case of Paul Volcker, who conducted a “neutral” study of the UN’s 1990s Oil for Food programme in Iraq. It seems too much of a coincidence that the only names divulged by Volcker were precisely those known to have views different from that of US administrations. For example, suspicion was thrown on Jacques Chirac, a former French Head of State known for challenging Washington’s view of developments, most notably during the 2003 invasion and occupation of Iraq. In the case of India, Volcker named the “Congress Party” and then External Affairs Minister Kunwar Natwar Singh as having received benefits from the alleged scam.

It is impossible that import and export licenses were given in the name of a political party by the authorities in Baghdad. There would definitely have been an office-bearer of the Congress Party who actually got the benefit of the petroleum quotas sanctioned by Saddam Hussein. Perhaps because that office-bearer was (and probably still is) a US asset, Volcker avoided mentioning the name. He had no such hesitation in outing the name of Natwar Singh, who believes that India ought to have a foreign policy independent of the wishes of Washington. Someday, Volcker needs to confess as to just how much consultation he had with US agencies and authorities while writing his “neutral” report The world is now aware of the mendacity of the UN weapons inspectors who scoured every corner of Iraq, ostensibly searching for WMD but in reality fixing coordinates for a future US military attack. The “neutral” inspectors were mostly from NATO members, or from countries such as Australia, who follow the NATO line without even changing a comma. They searched for WMD precisely in installations that were subsequently bombed to smithereens during the 2003 conquest of Iraq by the US and the UK. Of course, no WMD was found in any such installation, although that did not prevent the weapons inspectors from exercising their imaginations (or following scripts given to them by NATO intelligence agencies) and inventing all sorts of imaginary sightings of WMD, so that more intrusive visits could be justified. It is a measure of how emaciated the UN has become - rather like the League of Naions at its nadir - that its secretariat never once sought to intervene at such an obvious military and espionage use of its cover. Small wonder that Iran declined permission to the IAEA (another organisation dancing to NATO’s tune) when it sent a team filled with NATO member-state representatives to search for nuclear reactors in - you guessed it - military installations that the CIA had for years been attempting to penetrate. At this time of financial stringency, it would be best for UN agencies fronting for NATO to prepare their reports at home.

After all, that is where they are written. What gets seen in the field is disregarded, the way it was in Iraq India is presumed to have become independent in 1947 (and immediately thereafter begged the British Viceroy to continue to remain Head of State, with a change in designation to Governor-General). However, so complete is the domination of NATO intelligence agencies over their Indian counterparts that the latter ditto whatever they have been told by NATO personnel. An example is the attempt on the life of the wife of a senior Israeli diplomat in Delhi some weeks ago. The effort of the numerous “investigators” from afar (who have been given a free run of the entire process by Home Minister Chidambaram, who has made no secret of his affinity to NATO member-states) has been to somehow pin the blame on Tehran. Now a suspect has been discovered, who – conveniently for those interested in nailing Iran for the crime - has connections with Iran. This columnist has been to Tehran several times, and has seen at first-hand the incompetence of the Revolutionary Guard and other authorities there. So remote are ekements of the Iranian regime from reality that they do not even credit the fact of the massacre by the German state of millions of Jews during 1933-45. Denying the Holocaust shows up the lack of empirical grounding of the authorities in Tehran, who subscribe to fantasist theories peddled by neo-Nazis across Europe.

Clearly, Indian agencies are falling into the trap of blaming Iran for an action that would only hurt that country’s crucial economic relations with India, just as they have done on so many previous occasions. As the “evidence” of WMD in Iraq presented during 2001-2003 has shown, mendacity is the main characteristic of certain agencies, who twist facts to suit their immediate needs, but who have willing dupes in establishments in South Asia and West Asia Christine Lagarde is following in the footsteps of the weapons inspectors who blamed Saddam Hussein for WMD that was just not there. She came to her “neutral” office with the clear agenda of using the resources of the IMF to shift the risk of bailouts in several European states from France and Germany onto Japan, China and the GCC countries.

She is demanding that these Asian countries pour hundreds of billions of dollars into the IMF, hat she can then use to retire debt by private individuals and institutions based in Europe and the US. The more IMF Managing Director Lagarde can squeeze out of economies in Asia (and a few elsewhere than in NATO member-states), the better she would have fulfilled her real task, which is not the protection of the international economy, but the protection of selected investors in NATO member-states. These have poured money into select European economies out of pure greed. They deserve to pay a substantial price for their lack of scruple. However, they are looking to Lagarde for rescue. The former French finance minister has very close personal links with the very financial entities who are enmeshed in the ocean of bad loans that is flooding European economies. Most of her time is spent with them or in Europe, not in the countries with desperately poor populations.To the wealthy shall be given more, all taken from the poor of the globe. 

Sometime in the future, a lawsuit may need to get filed against the Board of Directors of the IMF. Why are these worthies - who draw huge salaries, especially the Executive Directors - looking the other way when Lagarde has reportedly diverted 60% of the resources of the IMF to just three countries in Europe? Why is it that they have not demanded of these countries that they first fulfill the conditions that other countries have been forced to accept before getting IMF loans? Why has the process of loan approval been fast-tracked to a degree that has reduced Due Diligence and oversight to levels that are below those needed to ensure that the interests of the IMF are protected? The fact is that only those with no concern for even the most attenuated norms of banking prudence would sanction the accomodation to select European economies that the IMF is doing on a weekly basis since Lagarde took office.Indeed, since her predecessor was in office. Dominque Strauss-Kahn, in between his social surveys of working-class immigrants in New York, ought to have conducted studies of certain European economies so that the IMF could have identified the malaise that became so obvious during the final year of his term. Why did he not do so? Why did he relax standards of supervision for European entities in a way never done for those elsewhere? Was there any consultation between him and Christine Lagarde or Nicholas Sarkozy in such transactions? We may never know, as no one in the IMF seems at all curious about the huge bulge in accomodation to Europe from a fund that proclaims that it is wedded to the “reduction of poverty”. Presumably, what is meant by this is that billionaires ought to be assisted, so as to prevent them from dropping to the status of mere millionaires.

The NATO powers talk incessantly of “rules-based” systems. However, they themselves seem to be exempted from following any of the rules they insist that others ought to follow to the letter, even if these be painful in the extreme. Christine Legarde is in that tradition of immunity from accountability that NATO member-states regard as their due in the global order. She is busy asking capitals in Asia to fork out cash to divert to the world’s richest continent. In the process, she is adding to the misery and poverty that os endemic across so much of Asia, by placing at risk the savings of hundreds of millions of innocents whose lifestyles are way below those whom the IMF is showering with billions. Hopefully, the Board of Directors of the IMF will awaken from their slumber before Lagarde converts it into another Lehman Brothers.

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