The International Monetary Fund's effort to negotiate a $4.8 billion loan with Egypt's government has hit new trouble on multiple fronts. First, Egypt's point person for the negotiations resigned, for reasons that remain unclear. Via Ahram Online:

A key Egyptian negotiator with the International Monetary Fund said on Sunday he has resigned as first deputy finance minister, in a potential blow to Cairo's prospects of an early IMF deal.

Hany Kadry Dimian has been the crucial point man in Egypt's protracted and so far fruitless negotiations to obtain a $4.8 billion loan needed to help combat a severe economic crisis...

Kadry gave no explanation for his decision to quit, first reported on the Egyptian dissident Rebel Economy blog, saying he would say more on Tuesday. A senior European diplomat said his departure was not a good omen for Egypt's hopes of wrapping up a deal on the long delayed IMF loan next month, as the government has said it aims to do.

Kadry was the one expert in the ministry who fully understood the IMF programme and was able to deal with the global lender professionally, the diplomat said.

Then a prominent Egyptian politician inveighed against the draft loan package:

Egypt should refuse a $4.8 billion (3 billion pounds) loan from the International Monetary Fund rather than submit to terms that would further impoverish the poor and could spark a revolution of the hungry, leftist leader Hamdeen Sabahi said on Monday.

Sabahi, 58, who came third in a presidential election last year after the 2011 uprising that toppled autocratic President Hosni Mubarak, told Reuters that neither the global lender nor Egypt's Islamist-led government had told the public the truth about austerity conditions attached to the proposed loan.

Meanwhile, Egypt's parliament has delayed consideration of legislation insisted upon by the Fund. Via Reuters:

Speaker of the upper house of parliament Ahmed Fahmy appeared visibly frustrated as he announced that the chamber would halt what had been scheduled as its final reading of the law because it did not have the necessary government data.

"What finance ministry or tax authority does not know how to calculate the income bracket or who benefits and who is harmed? This is not worthy of the council," Fahmy said, as members clapped their support.

Fahmy said that debate was suspended "until the government provides correct data, otherwise this government can go wherever it wants to go."

In addition to cutting fuel subsidies and raising sales taxes, Egypt has said it will rein in its soaring budget deficit with measures including tax changes targeting the wealthy.

Last Thursday, the United Nations Security Council unanimously approved a substantial new peacekeeping mission. The new operation--ponderously named the Multidimensional Integrated Stabilization Mission in Mali (MINUSMA)—will likely become the UN's third-largest peacekeeping mission, after those in Congo and Darfur. But just how multidimensional the force will be is a matter of debate and interpretation. In voting for the mission, Russia's UN envoy, Vitaly Churkin, endorsed a narrow view of its mandate:

[W]e are disturbed by the growing shift towards the military aspects of United Nations peacekeeping. What was once the exception now threatens to become unacknowledged standard practice, with unpredictable and unclear consequences for the security of United Nations personnel and their international legal status.

Russia also doesn't want the peacekeepers getting in the business of arresting war criminals (the International Criminal Court has an ongoing investigation of alleged atrocities in Mali):

We believe that using Blue Helmets for the tasks  involved in arresting those accused by the International  Criminal Court, including through the use of force, is not part of United Nations peacekeeping and carries a  number of risks for the peacekeepers, who could find themselves required to take part in actions that should be conducted by specially trained troops.

Moscow's interpretation is at least in tension with the text of the resolution, which provides that the mission should conduct a wide range of tasks, including the following:

Stabilization of key population centres and support for the reestablishment of State authority throughout the country...to stabilize the key population centres, especially in the north of Mali and, in this context, to deter threats and take active steps to prevent the return of armed elements to those areas;

To protect, without prejudice to the responsibility of the transitional authorities of Mali, civilians under imminent threat of physical violence, within its capacities and areas of deployment...

To provide specific protection for women and children affected by armed conflict..

To protect the United Nations personnel, installations and equipment and ensure the security and freedom of movement of United Nations and associated personnel...

To monitor, help investigate and report to the Council on any abuses or violations of human rights or violations of international humanitarian law committed throughout Mali and to contribute to efforts to prevent such violations and abuses...

To assist the transitional authorities of Mali, as necessary and feasible, in protecting from attack the cultural and historical sites in Mali, in collaboration with UNESCO...

To support, as feasible and appropriate, the efforts of the transitional authorities of Mali, without prejudice to their responsibilities, to bring to justice those responsible for war crimes and crimes against humanity in Mali...

For all these tasks, the resolution "[a]uthorizes MINUSMA to use all necessary means, within the limits of its capacities and areas of deployment, to carry out its mandate." As always, there is plenty of wiggle room in the text, and the force commander will get to decide what the "limits of [the mission's] capacity" are. But it's fair to ask whether there was a meeting of the minds between Russia and other key players on the Mali mandate.

The stagnant politics of the U.N. Security Council reform campaign are well known: While mouthing niceties about the need for reform, the current permanent council members have little interest in advancing the process. Meanwhile, the broader U.N. membership -- which would have to approve any reform -- cannot agree on a plan. The four leading aspirants for permanent seats (Brazil, Germany, India, and Japan -- known as the G4) are viewed suspiciously by another group of states, who argue that they only want to expand the council's oligarchic structure rather than fundamentally alter it. 

In essence, that's where the process has been stuck for decades. Along the way, the prospects for reform have ebbed and flowed. In 1997, a Malaysian diplomat introduced a plan that won significant support but ultimately succumbed to divisions in the General Assembly. In 2005, a High-Level Panel launched by Kofi Annan developed several possible reform packages and spurred serious negotiations on a draft resolution. In 2009, negotiations formally shifted from an open-ended working group to an intergovernmental track. But that procedural change meant little in practice, and negotiations have sputtered since then.

For all the rhetoric about the urgency of reform, there's no sign that anything will change. So what might move the process forward? There's one simple but dramatic step that U.N. members seeking reform could take: stop endorsing the council's current structure through their votes. Every fall, the General Assembly elects new non-permanent members to the council. For the most part, these elections are regional deals, with decisions made long in advance of the formal voting (some regional groups even assign their slots more than a decade in advance). But the entire U.N. membership must vote, and no country can be elected without securing two-thirds support in the assembly.

Refusing to engage in the annual Security Council election process until there is reform would be a modest and proportional act of disobedience. There would be a significant collective action problem, of course, and states would have to pledge in advance to abstain. But if that cooperation could hold, the manuever might radically change the landscape. With a large bloc of states withholding votes, no new members could be elected, and the council would face an institutional crisis. Large-scale abstention could force the permanent members to engage in the reform debate in a way they have mostly avoided to this point. Even more important, it would compel the competing blocs within the General Assembly to settle their differences and forge a plan that could win the two-thirds necessary to amend the charter.

There is precedent for the use of voting power in the assembly to force council reform. In 1963, the assembly voted to increase the non-permanent seats on the council from six to ten. A few years later, the permanent members all acquiesced by ratifying those amendments. Why? In large part, they agreed because newly decolonized states in Asia and Africa implicitly threatened to use their voting power to stuff the council with their members and exclude states from eastern and western Europe, the Americas, and elsewhere. As a U.S. State Department official wrote at the time, the U.S. "would do better to acquiesce in enlargement than fight it." 

If U.N. members are serious about forcing Security Council reform, they should stop complaining -- and then stop voting every year to endorse the body's current structure. The fact that they are not prepared to do so says something important about political realities at the United Nations: Many members ostensibly in favor of reform prefer the council they know to a reformed council they don't.

The World Bank is under pressure from one of its largest clients to do more infrastructure funding. Via the Wall Street Journal:

The World Bank is working on setting up a global infrastructure facility that would channel funding into much-needed projects, nurturing domestic and global economic growth, India's finance minister said. 

P. Chidambaram told The Wall Street Journal that the World Bank had done a lot of work on the proposal, and had tasked two of its managing directors to come up with a paper on the subject. The idea was most recently discussed in meetings on Friday morning in Washington, he said.

"I've urged the World Bank president that the global infrastructure facility should be set up as early as possible because countries like India require a large amount of finances for infrastructure," Mr. Chidambaram said in an interview on the sidelines of meetings of the Group of 20 leading economies, the International Monetary Fund and the World Bank.

Milan Vaishnav, an India expert at the Carnegie Endowment for International Peace, told me that India's push for new Bank infrastructure funding likely reflects several developments. Government spending is drying up because of a clampdown on deficit spending. Meanwhile, public-private partnerships to invest in infrastructure haven't produced the desired results. Given these constraints, Indian officials are hunting for other options to address its enormous infrastructure needs. The much ballyhooed BRICS bank could be an option, but it still exists only on paper (and may never move off the drawing board).   

The World Bank can't easily ignore the priorities of its largest client, but it faces a much broader question of what sectors to prioritize and how best to pursue its mission. The Bank's focus has changed significantly over time as the politics and philosophy of development aid have shifted. Shortly after World War II, the Bank prioritized big reconstruction projects (its first loan helped France purchase industrial material, petroleum and coal). The Bank moved into agriculture in the 1960s, and then became much more involved in governance efforts (including anti-corruption) in the 1990s. While the Bank still does some big infrastructure projects (including several large roads projects in India), law, justice and public administration is the largest sector for Bank funding globally.

More infrastructure work makes a lot of sense from the demand side, but it can be problematic from the standpoint of the Bank's biggest funders. The United States and Europe, in particular, have recently prioritized anti-corruption and the environment, and the Bank has responded. The lender has cracked down on corruption, and new president Jim Kim has also made climate change a priority.

These new imperatives don't necessarily mesh well with infrastructure projects, which can be environmentally messy. The Bank's 2010 decision to fund a South African coal power plant was  controversial, and the United States ultimately abstained on the vote. Corruption is also a heightened concern with infrastructure projects. According to Vaishnav, "because these are big-ticket projects, the potential for rent-seeking is significant." The Bank's largest funders and its largest clients have quite different ideas about how much those kinds of complications should matter.

With the Doha Round of multilateral trade talks becalmed, it's often tough these days to find a cheerful global trade expert. But former U.S. trade representative Carla Hills is having none of the doom and gloom. She is quite sure that the negotiations of NAFTA in 1990-1991 saved the Uruguay Round of global trade talks and that another blockbuster regional trade deal could have the same catalytic effect:

In 1990, the Uruguay Round collapsed in Brussels. In June 1991 the United States, Mexico and Canada launched the negotiations of a North American Free Trade Agreement (Nafta). Fourteen months later negotiations were concluded. President George H.W. Bush signed the agreement in December 1992; President Clinton secured congressional approval of the agreement the following year.

By joining the economies of Canada, Mexico and the U.S., Nafta created a regional market of over 400 million people. It was the first comprehensive free trade agreement to join developed and developing nations, and it achieved broader and deeper trade liberalization than any prior trade agreement.

The world’s reaction was broad, deep and fast. In just a few months following the passage of the Nafta, trade negotiators returned to the bargaining table, completed the Uruguay Round, and created the W.T.O. to the enormous benefit of the global economy.

It's a powerful claim. And for those who favor deeper trade liberalization, it's a very appealing one. As Hills goes on to argue, if NAFTA saved Uruguay, why couldn't a U.S.-EU trade agreement save Doha? If she's right, a sufficiently strong regional jolt should spur global talks. But Hills provides no direct evidence that NAFTA did in fact save  the Uruguay Round. It's not fair to ask her to produce that evidence in the space of an op-ed, but there's some cause for skepticism. The WTO's official description of the Uruguay negotiations makes no mention of NAFTA. I'd be curious to hear from trade historians whether her account of NAFTA's healing powers is well accepted.

One of the subplots from last week's International Monetary Fund spring meetings was evidence that the Fund's leadership has turned sour on Britain's austerity program. During the release of the Fund's World Economic Outlook, IMF chief economist Olivier Blanchard expressed concern that austerity has now gone too far. "In the face of very weak private demand," he said, "it is clearly time to consider adjustment to the initial fiscal consolidation plans." (Playing good cop to Blanchard's bad cop, managing director Christine Lagarde was significantly more cautious in her comments on the issue and insisted that Fund policy had not changed.)

If it were so inclined, the IMF could become a serious political liability for the Cameron government as it defends an economic program that is already unpopular. The Guardian reports today that Chancellor George Osborne is not concerned:

Osborne has laughed off suggestions he is in a state of panic about the slow rate of Britain's economic recovery, denying that the International Monetary Fund (IMF) has rejected his austerity policies.

He said the full verdict of the IMF would come in May, when it visits the UK to make a complete assessment, adding that the recently reported critical views of the IMF chief economist, Oliver Blanchard, represented the views of only one man....

Osborne said of Blanchard: "He is one voice. He has a well-known set of views on this that he has expressed over several years. The IMF will do its analysis of the British economy as it does of all economies when it comes to Britain in May."

The May analysis that Osborne refers to is the Fund's regular "surveillance" report. A team of IMF experts will in the next few weeks arrive in London and conduct a thorough review of Britain's economic and fiscal position. They will then submit a confidential report to the Fund's executive board, which will debate it. Along the way, however, the British  government will be able to request amendments, corrections, and deletions. By the time the surveillance report sees the light of day, there's very little chance it will include anything like a direct indictment of British fiscal policy; the IMF simply isn't in the business of directly and publicly confronting major shareholders.

The deeper question may be whether Blanchard's views and those the IMF privately communicates will influence British policymakers. Not long ago, the Fund examined the question of whether its function as a "trusted advisor" to member states is a meaningful one. That report identified tension between its roles as watchdog for the global financial system and advisor to sovereign governments and between the need for transparency and the continued importance of confidential discussions. The report found that most countries want the Fund to be candid--but in private:

Most country authorities wanted candor (“ruthless truth-telling”) from IMF staff in their private discussions with them. They wanted to be able to have an exchange of views without concerns about disclosure, particularly on sensitive issues. At the same time, they recognized that transparency contributed to increased effectiveness and accountability, for boththe member country and the IMF. In this regard, most expressed satisfaction with the IMF’s transparency policy and treatment of confidential issues. Many noted that they trusted Fund staff to use good judgment in not publicly disclosing issues in counterproductive ways.

The satisfaction of major governments with the Fund is a precious commodity, and intervening too forcefully in fraught domestic debates  is a sure way to forfeit it.  In short, it's very likely that Blanchard's statements are about as far as the Fund will go in criticizing Britain's austerity program. George Osborne may have reasons to panic, but the IMF isn't one of them.

In the wake of their agreement to normalize relations, Serbia and Kosovo have received what they were seeking: progress in their respective bids for European Union membership. Via BBC:

The European Commission has recommended opening EU membership talks with Serbia, following Friday's landmark deal to normalise Serbia-Kosovo ties.

Serbia's government has approved the EU-brokered deal with its former province of Kosovo. Both Serbia and Kosovo want to join the EU...[snip]

The Commission, which steers EU membership negotiations, said it "recommends that negotiations for accession to the European Union should be opened with Serbia". EU foreign ministers will consider the issue on Monday.

In a report the Commission said Serbia had "actively and constructively" engaged in dialogue with Kosovo and had improved its co-operation with Eulex, the EU rule-of-law mission in Kosovo.

In a separate report the Commission also recommended opening talks with Kosovo on reaching a Stabilisation and Association Agreement with the EU - a key step towards full EU accession negotiations.

Hardliners have squawked, but the signs are that the deal will stick. Kosovo's parliament endorsed the deal and Serbia's will reportedly follow suit this week. Writing in the FT, Misha Glenny describes Brussels' leveraging of the membership process as masterful:

There are potholes in the road to a functioning deal, and there will be challenges to implementation. But it is a measure of Baroness Ashton’s ability that Belgrade and Pristina have both indicated that they want her help in overseeing the process.

One reason she was able to coax them to make a deal (she insists that the parties are responsible for the overall content) is it was thought so impossible no other party wanted a role in negotiations. This proves that when the EU speaks with a single voice, it can use its leverage to overcome the claim that it is an economic?giant but a political pygmy.

The FT's Adam Thomson looks at what Mexico's well organized campaign to get Herminio Blanco the top job at the World Trade Organization (WTO) says about the country's diplomacy:

Peña Nieto’s administration sees Blanco’s candidacy for the WTO job as a perfect vehicle to project Mexico as a defender of free-trade values and practices globally. The 46-year-old president has personally backed Blanco for the post, and he tasked the country’s foreign ministry, as well as the network of embassies and consulates around the world, to explore ways of promoting the Mexican’s chances wherever and whenever possible.

Leading the campaign co-ordination is Lourdes Aranda, a respected and highly capable member of Mexico’s foreign service, who was a key figure during Mexico’s time in the presidency of the G-20.

Such commitment from the state creates a telling contrast with the experience of Angel Gurría, Mexico’s former finance minister who in 2006 made it to the top job of the Organisation for Economic Co-operation and Development thanks mainly to his own substantial efforts. Greater support from Mexico’s previous administration for Agustín Carstens, Mexico’s central bank governor, may not have changed the outcome of his failure to reach the top post at the International Monetary Fund. But it wouldn’t have hurt, either.