THE FINANCE MINISTRY’S DISSERVICE

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Why did Russia nominate Josef Tosovsky for IMF managing director?

All of Russia’s debts to the International Monetary Fund have been repaid, so Moscow’s unexpected intervention – nominating a candidate of its own to head the IMF – should have been an easy demonstration of Russia’s independent stance. But it turned into a classic scandal.


To borrow an opening line: the whole platoon is marching out of step, with only the sergeant keeping in step. What does this mean? I might suggest the following interpretation: this is about Russia’s sovereign democracy. And who would say that I’m digressing from the image of a platoon of soldiers? If you don’t like the sovereign democracy analogy, let me offer another. It’s analogous to Russia striving to take an independent stance (primarily to spite global imperialism, of course, as represented by Washington and Brussels) even in a situation where it’s self-evidently impossible to do so. That is, Russia can declare its dissenting stance – but cannot possibly prevail. At times, of course, even taking a stand is valuable in itself; but not when Moscow just ends up making a laughing-stock of itself.

That is exactly what has happened here – even though it might seem that Moscow carefully chose an arena where it couldn’t lose: the selection of a new managing director for the International Monetary Fund (IMF). All of Russia’s debts have been repaid, so Moscow’s unexpected intervention – nominating a candidate of its own to head the IMF – should have been an easy demonstration of Russia’s independent stance. But it turned into a classic scandal.

The problem wasn’t confined to the identity of Russia’s candidate, although even this turned out to be ambiguous. Yes, Josef Tosovsky is a prominent Czech financier and politician. But why did the Russian Finance Ministry decide to nominate this person in particular, and announce that it had held “extensive consultations with colleagues in other countries,” when this was immediately followed by Prague’s official refusal to support Tosovsky’s candidacy? What’s more, the refusal was accompanied by an unequivocal hint at Tosovsky’s possible links to the special services in the former Czechoslovakia.

Prague chose to look to Brussels. (The European Union, followed by the United States, are endorsing the candidacy of former French finance minister Dominique Strauss-Kahn.) In my view, there was absolutely no doubt that Prague would make this choice – and it isn’t clear what Moscow could have expected from this situation, other than a scandal.

There’s an interesting prelude to this scandal. When Strauss-Kahn visited Moscow, as part of a campaign tour seeking support for his candidacy, Finance Minister Alexei Kudrin and Deputy Prime Minister Alexander Zhukov argued that the IMF’s selection procedures ought to be more democratic. Kudrin and Zhukov are certainly aware that the IMF is kind of like a corporation – in which Russia owns a stake of 2.79%, while the United States, with 17%, has the right to veto any decisions, including appointment decisions. Reforms might be possible – but Russia’s subsequent actions have probably compromised its reform proposals rather than enhancing them.

Moscow really does have a creativity problem. Choosing Ramzan Kadyrov for a mission to Saudi Arabia was effective, but the Josef Tosovsky scheme has been an utter failure. If the objective was to shake the IMF, along with Washington and Brussels, Moscow should have nominated Viktor Gerashchenko for managing director of the IMF. Then Moscow wouldn’t have been the one in an uncomfortable position.

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