EDITORIAL : THE GUARDIAN, ENGLAND

 

 

The next IMF boss: Inside job

The IMF to hold an open contest, otherwise the choice will be between two poor candidates

Ever since Dominique Strauss-Kahn resigned last month as head of the International Monetary Fund there have been two related arguments. The first is that his replacement must come from Europe, on the grounds that only a European politician would be able to get up to speed with the intricacies of eurozone debt crisis and negotiate with the continental heavyweights. The second argument is that it must be someone from Asia, Africa or another part of the developing world, on the grounds that it was time for a non-European to have a pop at running one of the world's most important international financial institutions.

In both cases, nothing more is required of the candidate than that they bear the right passport. What has been notable about the feeble debate aired in the papers and on broadcast media over the past few weeks is how little it gets beyond questions of nationality and the vague, and vaguely offensive, notion of "representation". And the result is clear this week. The one European candidate to have thrown her hat in the ring is Christine Lagarde. The one developing-world runner to have left his blocks is Agustin Carstens. Neither is suitable, and both show just how poor the process is.

First, Ms Lagarde, the candidate of choice for David Cameron, Silvio Berlusconi and Nicolas Sarkozy. As advocates point out, the French finance minister is a poised performer. She has also had a role in the eurozone bailouts of the past year and so, friends claim, is well qualified to take up the biggest task that any new IMF boss will inherit. One might equally well argue that the utter mess the eurozone packages have become shows how ill-suited Ms Lagarde is for the job. The French minister has stuck up for the rights of banks and making implausible demands of bust countries.

Mr Carstens also makes a lamentable candidate. From Mexico, which most economists would no longer think of as part of the developing world (unless, of course, a job at the IMF depended on it), his record is poor. Senior at the IMF from 2003 to 2006, he was a key player in a period which the fund has itself described as characterised by "a high degree of groupthink, intellectual capture, a ... mindset that a major financial crisis in large advanced economies was unlikely". More recently, as central-bank governor of Mexico he has been disastrously hawkish on monetary policy.

Rather than choose a boss on the grounds of nationality, it would make more sense for the IMF to hold an open contest. And it would be sensible for observers to debate what role they want the fund and its head to play. Otherwise the choice will be between two poor candidates – which isn't much of a choice at all.
 
 

In praise of … winter fuel payments

They have warmed hearts who like to think state action can make a difference

Free money is a reliably popular policy, although not necessarily a good one. When Gordon Brown first wrote elderly people cheques for the winter, the priests of the technocracy lined up to dismiss a shameless con. Two-brained Tory David Willetts said he'd treat pensioners as grown-ups by doing away with the bung, and rolling the cash into the basic pension. The Institute for Fiscal Studies, meanwhile, suggested that piling yet another payment on to a creaking benefit system would achieve nothing more than alliterative headlines about Mr Brown's winter warmer. Well, a decade on, the institute has shown its characteristic determination to follow the evidence wherever it leads, and reached some startling conclusions. In the world of the wonks, people are assumed to possess the single-minded rationality of a robot. As such, they should recognise that every pound is the same, and spend it the same, wherever it has happened to come from or whatever it is said to be for. But the IFS found that if you give a pensioner a £100 fuel payment, they will spend well over a third on keeping warm, as against a mere 30th if the cash was not labelled this way. Doubts linger about the affordability of spraying cash on well-to-do 62-year-olds who use it to settle their Wine Society bill. But fuel payments have, at least, lent winter some real warmth. In the process, they've warmed hearts who like to think state action can make a difference, and to imagine people are something more than desiccated calculating machines.

Counter-terrorism: Prevention and cure

The coalition has fudged its answer to the conundrum of how to contain threats to democracy without damaging democracy itself

If there was a single area that might have been predicted a year ago as a major test of the unity of purpose of the coalition, it was domestic counter-terrorism strategy. Yesterday's unveiling of the new approach comes nearly six months after it was first promised. That indicates just how hard it was to hammer out an agreement that squared the old circle of containing a threat to democracy without damaging democracy itself. The result is a fudge. It is not all bad for the Lib Dems. In areas such as proscription of extremist groups, some sharp edges have been filed down. In other areas, the deliberate lack of clarity will leave organisations like schools, prisons and universities making sensitive judgments in a fog of uncertainty. And at its heart is an illiberal intolerance of ideas that amounts to a new curtailment on freedom of speech – one that will do nothing to end, among law-abiding communities, Muslim or otherwise, a damaging sense of exclusion.

For the last election, the Conservatives built a detailed counter-terror agenda around the idea – made explicit for the first time by David Cameron in his Munich speech in February – that multiculturalism had failed. Instead of mutual respect for difference, integration should be at the forefront of the strategy. At the same time it should be recognised that non-violent extremist organisations contributed to a climate where violent extremism became acceptable. Tories wanted Islamist groups such as Hizb ut-Tahrir to be banned (still no progress there), along with any other organisation that supported attacks on British troops or incited hatred. They demanded a much more robust line on excluding visitors with extremist views, and deportations of those who incited hatred from here. After the election Lib Dem negotiators, reassured by a common resistance to Labour's control orders and detention without trial, signed up to most of the Tory programme. But then came Mr Cameron's Munich speech and the differences were launched into the public space. Nick Clegg went to Luton to argue for engagement rather than exclusion. The result of the trimming that followed is a convenient fudge over the precise definition of extremism that will leave some flexibility of implementation for Lib Dem ministers, and allow them freedom to pursue their policy of engagement at conferences where other speakers might be classed as extremists.

But what works at the top may create problems on the ground. Too hazy a definition of "extreme" will place a heavy burden on the university administrators Theresa May accused of being slack in an interview on Monday. More support to help schools and prisons identify the vulnerable is welcome, and it is true that earlier choices of groups that were selected for their capacity to represent parts of the Muslim community turned out to be plain wrong. But now funding choices will be made on the basis of a willingness to subscribe to "British" values, which puts politicians in the role of theological arbiter and risks sending the most challenging groups deeper into the shadows.

Counter-terrorist strategies are, inevitably, a continual process of reconstruction. Yesterday's sensible decision to separate out community cohesion programmes – whose inclusion in earlier Prevent packages had led to accusations of spy networks – is welcome. But the warning from MPs last year that a well-meant project to support Muslim social institutions had become tainted by negative association with counter-terrorism illustrates the difficulties of intervention in this area. Yet yesterday's proposal that NHS workers should be alert to terrorist activity among colleagues suggests the lesson hasn't been taken on board. It risks outlawing people who express legitimate opposition to foreign policy. By stifling debate it diminishes the chance of winning the argument. If this is the muscular Liberalism Nick Clegg promised last month, it is speaking through a muffler.