Saturday, August 27, 2011

IMF Supports Jobs While Secretly Getting Rid of Many

Read post below but be aware the IMF and World Bank constantly promote women and minorities and then once the statistics on their promotion are tracted they then proceed to quickly get rid of them.  This well know game is played by even the IMF.

IMF chief urges US policymakers to help economy

JACKSON HOLE, Wyo. -- The new head of the International Monetary Fund urged U.S. policymakers to take more aggressive steps to stimulate the economy and ease the housing crisis.

IMF chief Christine Lagarde, speaking at an economic conference in Jackson Hole Saturday, said the United States should reach a "credible" plan to control government debts in the future, but push for stronger economic growth now.

If the economy stagnates, she said, plans to cut government spending in the future will lose credibility. "Who will believe that commitments to cut spending can survive a lengthy stagnation with prolonged unemployment and social dissatisfaction?" she said.

Her comments echoed those of Federal Reserve Chairman Ben Bernanke, who in a speech here Friday urged Congress to do more to help the ailing U.S. economy. Congress, led by House Republicans, has emphasized reducing government budget deficits over short-term measures to create jobs.

Lagarde also pushed U.S. policymakers to halt "the downward spiral of foreclosures, falling house prices and deteriorating household spending." She said they could move more aggressively to reduce amount of principal homeowners owe on their mortgages; about one in four U.S. homeowners owe more on their mortgages than their homes are worth.

The government could help homeowners take advantage of super-low mortgage rates to refinance their homes and reduce their monthly payments, she said.

In July, Lagarde replaced Dominique Strauss-Kahn as managing director of the IMF. He had been accused of assaulting a hotel maid. Those charges were dismissed last week.

Private investors or governments must replenish the capital of banks facing potential losses if ailing European countries such as Greece, Italy and Portugal cannot meet government debt payments, Lagarde said.

Lagarde urged central banks around the world to keep interest rates low and consider "unconventional" steps if they are required to protect the fragile global recovery. On Friday, Fed chief Bernanke did not announce any further steps to jolt the economy. He did say the Fed would discuss its options at its policy meeting next month. One unconventional step the Fed could take would be a third round of bond purchases, a policy known as "quantitative easing," designed to help the economy by lowering long-term interest rates.

"The downside risks to the global economy are increasing," Lagarde said. "Those risks have been aggravated further by a deterioration in confidence and a growing sense that policymakers do not have the conviction, or simply are not willing, to take the decisions that are needed."

(c) 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Friday, May 20, 2011

At I.M.F., Men on Prowl and Women on Guard

WASHINGTON — It is an international island in the midst of the American capital, a sharp-elbowed place ruled by alpha male economists. The days are long, and employees are regularly pressed together for weeks on end during overseas “missions.” It is a climate in which romances often flourish — and lines are sometimes crossed.

Some women avoid wearing skirts for fear of attracting unwanted attention. Others trade whispered tips about overly forward bosses. A 2008 internal review found few restraints on the conduct of senior managers, concluding that “the absence of public ethics scandals seems to be more a consequence of luck than good planning and action.”


This is life at the International Monetary Fund, the lender of last resort for governments that need money and, under the leadership of Dominique Strauss-Kahn, an emerging force in the regulation of the global economy.
But with Mr. Strauss-Kahn’s arrest earlier this week and indictment on Thursday on charges that he tried to rape a New York hotel housekeeper, a spotlight has been cast on the culture of the institution. And questions have been revived about a 2008 episode in which the I.M.F. decided that Mr. Strauss-Kahn had not broken any rules in sleeping with a female employee.
What may draw even more attention to the culture of the fund is the revelation of an affair involving a potential successor to Mr. Strauss-Kahn, who resigned as managing director on Wednesday. Kemal Dervis of Turkey had a liaison while working at the World Bank years ago with a woman who now works at the I.M.F., according to a person with direct knowledge of the relationship.
Interviews and documents paint a picture of the fund as an institution whose sexual norms and customs are markedly different from those of Washington, leaving its female employees vulnerable to harassment. The laws of the United States do not apply inside its walls, and until earlier this month the I.M.F.’s own rules contained an unusual provision that some experts and former officials say has encouraged managers to pursue the women who work for them: “Intimate personal relationships between supervisors and subordinates do not, in themselves, constitute harassment.”
“It’s sort of like ‘Pirates of the Caribbean’; the rules are more like guidelines,” said Carmen M. Reinhart, a prominent female economist who served as the I.M.F.’s deputy director for research from 2001 to 2003. “That sets the stage, I think, for more risk-taking.”
In 2007, officials at the fund declined to investigate a complaint by an administrative assistant who had slept with her supervisor, and who charged that he had given her poor performance reviews to pressure her to continue the relationship. Officials told the woman that the supervisor planned to retire soon, and therefore there was no point in investigating the charges, according to findings by the I.M.F.’s internal court.
The official, who is not named in the records, told investigators that he also had a sexual relationship with a second employee, and that he did not believe he had acted improperly.
In another case, a young woman who has since left the I.M.F. said that in 2009, a senior manager in her department started sending her increasingly explicit e-mails seeking a relationship. She complained to her boss, who did not take any action.
“They said they took it seriously, but two minutes later they were turning around and acting like everything was O.K. to the person who had done it to me,” said the woman, who spoke on condition of anonymity because she still works in the international development community. “He wasn’t punished. Not at all.”
Virginia R. Canter, who joined the I.M.F. last year with responsibility for investigating harassment claims, said the institution recently took a series of strong steps to protect employees. A new code of conduct adopted on May 6 specifies that intimate relationships with subordinates “are likely to result in conflicts of interest” and must be disclosed to the proper authorities.

It’s recognizing that sometimes relationships grow in the workplace,” Ms. Canter said. “But it doesn’t mean we’re not sensitive to this issue and we will investigate if there is evidence to suggest harassment.”

She also said that the fund would not again brush aside an employee complaint like the one from the assistant who was sleeping with her boss. “Absolutely that wouldn’t have happened today,” she said. “We would investigate the matter.”

The I.M.F., created in 1945, has 2,400 employees evaluating the economic health of nations from a pair of huge Washington buildings and on regular trips abroad. When nations borrow money from the fund, they typically must agree to adopt economic reforms, and employees are sent to watch their progress.
In recent years the fund has tried to diversify by hiring more women, Even so, only six of the I.M.F.’s 30 senior executives are women. Only 21.5 percent of all managers at the fund are women, compared with 32 percent at its sister institution, the World Bank, and 26 percent at the United Nations secretariat.
Some women say the fund is a welcoming work environment.
“I haven’t met any cases in my career of sexual harassment,” said Teresa Ter-Minassian, who spent 37 years at the I.M.F. and retired last year as director of the fiscal affairs department.
Some issues arise from cultural differences. In one case, a married Muslim woman complained when her European boss paid her a compliment that was innocuous but unrelated to work, the only subject she considered permissible.
“Culturally, there are a lot of people thrown together,” said Susan Schadler, who spent 32 years at the fund, rising to deputy director of the European department before leaving in 2007. “There’s a lot of scope for misunderstanding, misreading signals. I think that’s a particular vulnerability for the fund.”
The new relationship policy is a response to the 2008 case in which a Hungarian economist, Piroska M. Nagy, had a relationship with Mr. Strauss-Kahn.
Ms. Nagy described herself in a letter to investigators as “damned if I did and damned if I didn’t.”
An independent investigation found that Mr. Strauss-Kahn had not abused his power. Though he apologized publicly, many women at the I.M.F. were dismayed by the outcome.
“What are we supposed to make of this when we go into Strauss-Kahn’s office?” Ms. Schadler said, recounting conversations with former colleagues. “Do we sit there and think, ‘He’s sizing me up as a potential sexual object?’ ”
“There is this implicit culture that this wasn’t really seen as something that the fund is going to worry about,” she said, “and I think that’s what bothered women.”

Sunday, October 3, 2010

What was the IMF and its brilliant economists doing as the international financial system was becoming systemically fragile?

The IMF was in the process of scaling down its staff as it thought that with the robust activity in the private markets there was no need for their existence. This is true.  See media report below:

IMF to cut staff by 15%

7 December 2007
Washington, DC

In an exclusive interview with the Wall Street Journal, Dominique Strauss-Kahn, the new Managing Director of the International Monetary Fund (IMF), reveals plans for significant layoffs at the institution, by as many as 300-400 jobs.

As part of his efforts to revive its relevancy and increase income, Dominique Strauss-Kahn, the new Managing Director of the International Monetary Fund (IMF) plans to cut IMF staff by as much as 15% -- the first significant round of layoffs since the institution was founded in 1945.

In an exclusive interview with the Wall Street Journal, Strauss-Kahn noted that the cuts would depend on his getting approval from member governments for his plans to increase income.

The IMF faces annual loan deficits of $400 million by 2010, according to the article. The IMF currently employs 2,634 staff. By cutting 300-400 positions, Strauss-Kahn would reduce the deficit by $100 million. In addition, the new Managing Director hopes to realize cost savings by reducing the bureaucracy in the institution and cutting the number of economists it employs.

"This institution works well, with dedicated people and very high-level staff, but it is a factory to produce paper," Strauss-Kahn said in the interview.

Strauss-Kahn hopes that the U.S. and other large shareholders will increase IMF's income in exchange for the proposed savings. He also plans to sell 400 metric tons of IMF's gold stock and invest institutional reserves in "higher-yielding instruments."

Though Strauss-Kahn says he wouldn't go ahead with the cuts without approval for his plans to boost income, the article notes that IMF members are "likely to force him to go through with the job cuts anyway."


IMF Plans to Cut Jobs, Lift Income, by Bob Davis, December 7, 2007. (Wall Street Journal website)
Strauss-Kahn Seeks to Quickly Refocus IMF, IMF Survey Magazing, December 7, 2007. (IMF website)

Wednesday, July 7, 2010

Do Our Institutions Understand Austerity? - Pay raises at World Bank, IMF draw criticism

By Howard Schneider
Washington Post Staff Writer
Friday, June 25, 2010
Austerity may be the new reality for public employees in the developed world, whether it is pay cuts in Greece, layoffs in Germany or pension reform in Britain.
But the International Monetary Fund and the World Bank have pushed ahead with pay raises above the rate of inflation for thousands of workers -- despite opposition from major funders in the United States and Europe.
U.S. representatives on the IMF and World Bank boards abstained in the recent votes that approved raises of 4.9 percent and 3.7 percent, respectively. They were joined by European nations that felt the increases set the wrong tone when governments are being pushed to retrench. The IMF just released its "Ten Commandments for Fiscal Adjustment in Advanced Economies."
Raises at the World Bank were approved at a Wednesday board meeting, just a day after Britain released an austerity package featuring new taxes and spending cuts -- not the best timing for winning the British board member's support.
"We greatly value the hard work and expertise of bank staff," said Rob Kelly, a spokesman for Britain's Department for International Development. But "when governments worldwide are cutting public spending, increasing taxes, and reducing or freezing public-sector pay, to award an above-inflation pay rise risks making the bank appear out of touch."
The dispute mirrors some of the broader dynamics in the world economy. The United States and Europe remain the major financial backers of the IMF and World Bank, and they were recently tapped to help replenish the coffers of both institutions after the global crisis spurred record lending to support economies around the world. Salaries of top World Bank staff were frozen last year in recognition of the crisis.
At the same time, developed nations are coping with the uncomfortable new role as a source of world economic weakness. Although that status made representatives from some countries leery of approving raises at the two institutions, officials from Latin America and Asia noted that there were no such complaints when their countries went through similar periods of crisis and retrenchment, according to officials familiar with the discussions.
In the bank's case, raises for the roughly 7,000 employees at its headquarters are set by a formula based on inflation and labor-market data in the United States. Inflation is currently about 2 percent annually; the formula would have allowed raises of up to 4.3 percent, but the request was scaled back to 3.7 percent. According to bank officials, individual raises are based on job reviews, and most employees will not receive the full amount. The IMF uses a similar system; its pay raises were approved in April.
"Our board representing 187 countries approved this recognizing [the] record work by staff on behalf of clients during the crisis, and it is well below other multilateral institutions," such as the IMF and major development banks, said Hasan Tuluy, vice president for human resources at the World Bank.
The World Bank's overall budget was approved at the same meeting without abstention, and at $1.77 billion, it was essentially flat compared with the year before when adjusted for inflation, according to bank officials.
U.S. officials, speaking on the condition of anonymity because the pay discussions were private, said they are pushing for a fuller review of a compensation system that outpaces the cost of living.

Tuesday, February 23, 2010

Time for Change, IMF and World Bank

IMF and World Bank

The two sister organizations engaged in international lending reside across the street from each other in downtown Washington. While the IMF’s mandate covers surveillance of country and regional economies, in particular in relation to banking and currency, and crisis lending, the World Bank focuses on project-based lending for economic development. Regardless of their respective mandates, their actual work entails substantial overlap. More often than expected, they step on each other’s toes and even compromise the objectives of each other—and thus they compromise the objectives of the countries that they represent and those that they serve. Two sets of Executive Boards and two sets of staff are involved. There is substantial duplication and significant “intentional differentiation” of operational and support activities between the two organizations, e.g., human resources policies and practices, technology. These organizations do not only represent two major bureaucracies but in fact a represent a preponderance of excess. The financial year of the two organizations is also different which makes it hard to reconcile and control costs. Time after time, whenever the discussion turns to consolidating these two lenders, there is lack of support from within--given their interests to preserve their respective bureaucracies and high paying jobs--every effort is made to justify keeping the two organizations separate. The staffs of the two organizations earn excessively high salaries for the value added. In today’s financial environment, we cannot afford not to consolidate these two organizations.