U.S. undercuts Lagarde's fundraising campaign

Poor Christine Lagarde. Even as the IMF managing director seeks to drum up new resources for the Fund to help prevent a European meltdown, senior U.S. officials keep signaling a distinct lack of enthusiasm.

Lagarde has argued repeatedly that the IMF needs to boost its lending capacity to nearly $900 billion and has been making that case around the world, including in Saudi Arabia, South Africa, Brazil, China, and at Davos. Lagarde acknowledges of course that the onus is on Europe to craft a more robust response, in particular by merging the two bailout funds Europe has already created. And she's certainly not keen to accentuate any differences with the United States, the IMF's largest shareholder.

But the differences are impossible to ignore, and this weekend's meeting of the G20 highlighted them. Treasury Secretary Tim Geithner repeated the administration's mantra that substantial IMF action would be premature. Via Reuters:

"There is broad agreement that the IMF cannot substitute for the absence of a stronger European firewall and the IMF cannot move forward without more clarity on Europe's own plans," Geithner said.

The U.S. Treasury chief repeated that he was not prepared to go to Congress now to seek more resources for the IMF because he didn't feel they were needed at this time.

He declined to say how big a financial firewall he felt Europe needed to put up now but noted that, in order to be credible in markets, it had to be bigger relative to possible claims that might be made on it. 

For her part, Lagarde appeared to acknowledge this weekend that her dreams of a much bigger IMF war chest won't be realized any time soon. "Raising significantly the firepower of the IMF is not something you can do by flicking your fingers," she said.

What's at work here are different responsibilities and political realities as much as different economic analyses. Senior IMF officials have a responsibility to the international system as a whole and do not face the political pressures politicians do. The IMF appears to have accepted that Europe, for a host of architectural and historical reasons, may be unable to devise its own solution to the debt crisis in a timely manner and are determined to put a backup system is in place.

My sense is that U.S. officials share those fears, but they face the countervailing political reality that Congress, not to mention Republican presidential candidates, would howl about new U.S. funds to "bailout" Europe. And that makes all the difference. Because of immediate political pressures, the United States is willing to run the risk that there simply won't be a firewall. Lagarde, as steward of the global financial system, is much less comfortable doing so.

The Multilateralist

The merits of Kofi Annan

Yesterday, via Twitter, I questioned whether Kofi Annan was an inspired choice to serve as the international community's lead envoy on Syria. I pointed out, too caustically, that Annan has as part of his record leadership of UN peacekeeping during the Bosnia and Rwanda catastrophes. 

Over the next several hours, I took a pretty serious drubbing from some very well-informed folks arguing that Annan is a strong choice and has real potential to make a difference. Bruce Jones, who has actually worked with Annan at the UN on Middle East issues, offered this list of his virtues:

He has huge credibility worldwide; a strong track record of calling for demo reforms in ME before anyone else; and

he's incredibly calming, in a situ where that's desperately needed, if forceful intervention isn't forthcoming.

Middle East expert and fellow FP blogger Marc Lynch pointed out that as a former Secretary General, Annan is as high profile an envoy as could be found.

the argument for Annan is pretty simple - former Sec-Gen is highest possible ranking envoy from UN system.

Jeff Laurenti (echoing Mark Leon Goldberg) argued that Annan's post-UN work as a mediator in Kenya produced results and showed considerable deftness.

@abuaardvark @multilateralist Shouldn't forget his patching #Kenya back together. #Annan has unique int'l respect and standing

In the face of this onslaught, I'm ready to beat a tactical retreat and concede that Annan might indeed be a wise choice for this post. My real beef here is not with Annan's particular skill set but with the way in which past policy failures often slide down the memory hole. Annan headed up UN peacekeeping during the horrific years of 1994-1995. During that time, blue-helmeted peacekeepers were bystanders to the Rwandan genocide and the Srebrenica massacre. These were epic disasters.  Annan's performance, particularly in the run-up to the Rwanda genocide, was uninspired to put it mildly.

Few if any of the key international players in those disasters suffered professionally. Quite the contrary.  Annan of course was shortly thereafter elevated to the top UN job. The American UN ambassador Madeleine Albright, who insisted at the Security Council that the UN withdraw its forces from Rwanda entirely and helped rebuff calls from the peacekeeping commander for reinforcements, soon became secretary of state. Her boss, Warren Christopher--who played a lead role in fashioning America's awful Bosnia policy--glided off into gilded retirement and elder-statesman status. The U.S. assistant secretary of state for Africa U.S. National Security Council's peacekeeping expert at the time, Susan Rice, is now America's U.N. ambassador (and, to be fair, her role appears to have been fairly marginal.)

I am not ready to argue that any of these individuals should have been deemed unfit for future public responsiblities. These and other players all had distinct roles, responsibilities and duties.  But it is striking that there was almost no meaningful personal accountability for those disasters. The UN belatedly undertook examinations that sprinkled blame around liberally, but blaming everyone means blaming no one.

This points to a broader problem with international organizations that a number of scholars and policymakers have addressed: the accountability gap. Not long ago, a unit of the International Monetary Fund wrote a report on why the organization's many highly trained economists failed to anticipate the 2007-2008 financial crisis. It's a fascinating read, chock full of insights into the psychological and technical blind spots Fund staff and leaders experienced. But, once again, no one was really responsible.

Referencing Bosnia and Rwanda, Marc Lynch argued yesterday that "most learned from those failures and [are] determined not to repeat." Maybe he's right. But unless epic failures like Bosnia and Rwanda constantly dog--and are made to dog--those associated with them, there's an altogether less constructive lesson that could be drawn: catastrophic inaction ain't all that bad for your career.