There's probably more to finance minister Pranab Mukherjee skipping the G20 foreign ministers meeting at Mexico than merely being busy with Budget 2012 - there is almost a month to the Budget, while the G20 meeting ends on February 26. As I wrote in one of my previous column, the G20 has lost its
relevance as the political-economy board of global finance. And is now losing its credibility as well.
After the crude and predictable hijacking of the International Monetary Fund (IMF) top job by France's Christie Lagarde - a fitting person, no doubt - G20's attempt at meritocracy and transparency at IMF and World Bank Group (WBG) has been thrown out of the door. "As part of a comprehensive reform package, we agree that the heads and senior leadership of all international institutions should be appointed through an open, transparent and merit-based process," the September 25, 2009 Pittsburgh statement had boldly stated.
Predictably, with the June 2011 breach of this promise over the IMF leadership behind us, when WBG president Robert B Zoellick announced last week that he would step down on June 30, the immediate and instinctive replacement for the world was US secretary of state Hillary Clinton (as per the terms of an invisible contract signed in 1944, the top jobs at IMF and WBG go to Europe and the US respectively).
Despite the fact that an April 4, 2011 document by the WBG development committee pushed for an "open, merit-based and transparent selection of the World Bank president", chances of it fructifying are low. The required job profile - track record of leadership; experience of managing large organisations with international exposure; firm commitment to multilateral cooperation; and effective and diplomatic communication skills - misses out on a crucial one: the person should be a US citizen. We'll know what the entries probably are by March 23, though the process has confidentiality built into it.
Like it or not, the global financial system is fast losing its legitimacy. On one side, enormous income inequalities have been plaguing citizens across the world. These are sharp and loud in the developing world, with abject poverty on one side living hand in hand with super-luxury skyscrapers. Following the economic crisis, however, these divides have emerged from the wealthiest nations, including the US, where the Occupy movement has accentuated the economic rift into a political movement. On the other, the shift in economic power to the East, to what was once 'third world', is a fact that rich incumbents of the West are unable and unwilling to accept.
"Much of the World Bank's history has been associated with the third world," writes Zoellick in the latest edition of Foreign Affairs. "The third world is an outdated concept. But development is not. In fact, lessons of development - just like principles of sound economics - are increasingly applicable to all countries."
The future of sound economics, however, is based on equality. How the WBG presidency shapes up will tell us whether that future is secure, or not. Like Mukherjee, who probably doesn't want to waste time clubbing without tangible results, I am not very hopeful.