Western racism in the IMF and the World Bank

By Peter Baofu, Ph.D.

The extensive Western mainstream media coverage of the arrest of Dominique Strauss-Kahn, the head of the International Monetary Fund (IMF), in May of 2011 with charges of sexual assault, and his replacement by Christine Lagarde, has distracted the attention to one of the most serious problems confronting the global institutions like the IMF and the World Bank, namely, their long history of Western racism, which still exists today. 

Let me explain this serious problem below, first (1) in regard to the IMF and then (2) in regard to the World Bank.

(1) First, in regard to the IMF, it is a global institution responsible for the management of "the global financial system by taking part in the macroeconomic policies of its established members, in particular those with an impact on exchange rate and the balance of payments" -- and, because of this global mission, the IMF has "a relatively high influence in world affairs and development."

Yet, ever since its creation in 1944 (originally with "45 members") until now (with "187 members" around the world), the head of the IMF has always been a white (or more precisely, a white Western European), and non-whites have been marginalized in its leadership hierarchy, as shown by the following list of the heads of the IMF since its creation in 1944:

1946-1951, Camille Gutt (a white from Belgium)

1951-1956, Ivar Rooth (a white from Sweden)

1956-1963, Per Jacobsson (a white from Sweden)

1963-1973, Pierre-Paul Schweitzer (a white from France)

1973-1978, Johannes Witteveen (a white from Netherlands)

1978-1987, Jacques de Larosière (a white from France)

1987-2000, Michel Camdessus (a white from France)

2000-2004, Horst Köhler (a white from Germany)

2004-2007, Rodrigo Rato (a white from Spain)

2007-2011, Dominique Strauss-Kahn (a white from France)

2011-now, Christine Lagarde (a white from France)

More importantly, if one examines the distribution of the voting rights in the IMF, the problem of Western racism is even more severe. In the IMF, major decisions must have the support of "an 85 percent supermajority," which guarantees that all decisions need the approval of the United States (which has "42,122.4 votes," or "17.72%" of the total) and the European Union, whose "27 member states...have a combined vote of 710,786 (32.07%)."

Non-white countries have been marginalized in the IMF. Even China, which is currently the world's second largest economy (and is expected to surpass the economy of the U.S. to be the world's largest economy before the end of this decade, according to a recent estimate by The Economist in the UK), has a voting right which is less than that of France or the UK, even though these two European countries have a much smaller economy by comparison (or more precisely, about 5 times smaller than the economy of China, if measured in terms of GDP PPP).

And (2) in regard to the World Bank, it is a global institution responsible for "the reduction of poverty" by providing "loans to...countries for capital programmes." Because of this mission, the World Bank also has a relatively high influence in world affairs.

Yet, ever since its creation in 1944 until now (with "186 countries" from all over the world as members), the head of the World Bank, like its counterpart in the IMF, has always been a white (or more precisely, a white American), and non-whites have been marginalized in its leadership hierarchy, as shown by the following list of the heads of the World Bank since its creation in 1944:

1946-1946, Eugene Meyer (a white from the U.S.)

1947-1949, John J. McCloy (a white from the U.S.)

1949-1963, Eugene R. Black, Sr. (a white from the U.S.)

1963-1968, George Woods (a white from the U.S.)

1968-1981, Robert McNamara (a white from the U.S.)

1981-1986, Alden W. Clausen (a white from the U.S.)

1986-1991, Barber Conable (a white from the U.S.)

1991-1995, Lewis T. Preston (a white from the U.S.)

1995-2005, Sir James Wolfensohn (a white from the U.S.)

2005-2007, Paul Wolfowitz (a white from the U.S.)

2007-now, Robert B. Zoellick (a white from the U.S.)

More importantly, if one examines the distribution of the voting rights in the World Bank, the problem of Western racism is even more severe (just as this problem exists in the IMF, as already shown above). In the World Bank, major decisions must have the support of a "85% majority," which guarantees that all decisions need the approval of the United States (which has "15.85%" of the voting rights in the World Bank) and, for that matter, of the European Union.

Non-white countries have been marginalized in the World Bank, just as they are similarly discriminated against in the IMF. Even China, which is currently the world's second largest economy (and is expected to surpass the economy of the U.S. to be the world's largest economy before the end of this decade, according to a recent estimate by The Economist in the UK), has a voting right which is only comparable to that of France, Germany, or the UK, even though these three European countries have a much smaller economy by comparison (or more precisely, several times smaller than the economy of China, if measured in terms of GDP PPP, as already indicated above).

Lest any misunderstanding occurs, the figures as cited above are current, which already reflect the most recent "reforms" in the World Bank and the IMF to increase the voting rights of developing countries (almost all of which are not whites from the U.S. or Western Europe). But the problem here is that these so-called "reforms" are extremely superficial, because the overall power hierarchy in both the IMF and the World Bank for Western global domination remains unchanged. The World Bank and the IMF remain two Western-white-dominated institutions, even though they are global by membership.

The lesson to learn here is that the West has so often preached human rights and equality on paper (for its global soft-power propaganda) but has so often practiced the most sophisticated forms of racism in the global institutions which it controls for its global domination. Western mainstream media are often the cheerleaders for the perpetuation of the racist power structure of these global institutions as something entirely legitimate (or natural).

Even Joseph E. Stiglitz, himself a Nobel laureate in economics, once thus criticized the IMF, in that its policies often "reflect...the interests and ideology of the Western financial community," as pointed out by Benjamin Friedman in his 2002 article "Globalization: Stiglitz's Case." And Catherine Caufield in "Masters of Illusion: The World Bank and the Poverty of Nations" (1996) argued that the policies of the World Bank often "harm...southern nations."

In this light, it is quite sensible for Hugo Chavez, the president of Venezuela, to call the IMF and the World Bank as "the tools of the empire" that "serve the interests of the North" in a speech delivered in 2007 -- in light of the notorious history of the U.S., for instance, which has time and again used its veto power in the IMF and the World Bank to prevent them from "taking action against its interests" and to promote other actions for itself, at the expense of other countries.

In conclusion, freedom and equality -- thus speaks Western rhetoric in global media. But racism and domination -- thus behaves Western practice in global institutions.

But this Western racism in the IMF and the World Bank has its days numbered, since the world nowadays is no longer what it used to be at the end of WWII (when victorious Western powers at the end of the war created the IMF and the World Bank with rules set up for their own global domination), because the global balance of power is now quickly changing towards the direction of an Asian century (as already analyzed in depth in my 2007 book titled "Beyond the World of Titans, and the Remaking of World Order").

Unless the IMF and the World Bank are willing to undergo a radical reform, not a superficial one (to prolong its power structure for Western domination), their historical relevance will come to an end soon, to be replaced by alternative global institutions when the new powers in the Asian century (and others) take their turn to reshape the world order.

This is no wishing thinking, as things are already moving towards that direction. For instance, only a few weeks ago, the BRIC nations (Brazil, Russia, India, and China) issued a rather unusual collective statement to show their displeasure with the current "tradition of appointing a European as managing director" (that is, head of the IMF), which only "undermined the legitimacy of the IMF," so they "called for the appointment to be merit-based," as reported by Robin Harding in the article "Brics Say European IMF Claim 'Obsolete'" in The Financial Times (May 24, 2011).

In South America, they are already forming "the Bank of the South" as a way to reduce Western domination through the IMF and the World Bank in the region. Similar alternatives also exist in other regions of the world, like "the East African Development Bank" for East Africa. And global protests had already been organized against the IMF and the World Bank, and good examples include "the World Bank Oslo 2002 Protests," "the October Rebellion," and "the Battle of Seattle."

Peoples and countries in the non-Western world are really sick and tired of Western racism in global institutions, which has been going on since the modern European colonization of the world (and its contemporary successor like the U.S.). Many in the Non-West are rebelling against this continuation of Western racism.

Thus, there will be a change of the guards, as the old ones (like the current Western powers) are slowly forced out and the new ones (like the Asian powers and others) will rise for the remaking of world order.

Although this racist (non-merit-based) old power structure of the IMF and the World Bank for Western global domination is still alive and well, it is living its last days (of historical obsolescence) -- as a new world order is already in the making, although it is not fully formed yet.

We are living in this transitional period of world history at an interesting time.

(Note: The figures and quotes as cited above are from the articles on the "IMF" and the "World Bank" in Wikipedia.)

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About the author: Dr. Peter Baofu is the author of 46 books and 54 new theories (as of July, 2011) in different fields, ranging from the social sciences through the formal sciences and the natural sciences to the humanities, with the final convergence into a "unified theory of everything." Some of his latest books include "The Future of Post-Human Geography" (2011, forthcoming), "The Future of Post-Human Data Analysis" (2011), "The Future of Post-Human Literature" (2011), "The Future of Post-Human Computing" (2011), "Beyond Ethics to Post-Ethics" (2011), "The Future of Post-Human Humor" (2011), "Beyond Cosmology to Post-Cosmology" (2010), "The Future of Post-Human Education" (2011), "The Future of Post-Human Religion" (2010), "The Future of Post-Human Personality" (2010), "The Future of Post-Human War and Peace" (2010), "The Future of Post-Human Law" (2010), "The Future of Post-Human Mass Media" (2009), "Beyond the World of Titans, and the Remaking of World Order" (2007), "The Rise of Authoritarian Liberal Democracy" (2007), "Beyond Nature and Nurture" (2006), "Beyond Civilization to Post-Civilization" (2006), "Beyond Capitalism to Post-Capitalism" (2005), the 2 volumes of "Beyond Democracy to Post-Democracy" (2004), "The Future of Capitalism and Democracy" (2002), and the 2 volumes of "The Future of Human Civilization" (2000). The rest of his 46 books touch on numerous other fields in the natural sciences, the formal sciences, the humanities, and the social sciences -- ultimately for a "unified theory of everything."