What Really Happens During an IMF Annual Meeting
What does the annual IMF/World Bank annual meeting look like from inside?
September 29, 2001
Among the striking aspects of past IMF/World Bank annual meetings has been the division of rewards between the older and younger participants in the carnival.
“Seniors” enjoy their importance in various caucuses which are essentially formed for self-congratulation — and finger-pointing at others outside the caucus. They eat and drink the very best, decorously, at parties in venues like the Corcoran Gallery and the Folger Library.
Meanwhile, the “juniors” are mostly drafted during the day to provide an audience for the big shots at the plenary conference sessions. These conferences are held in the enormous ballroom of the Sheraton Park Hotel near the National Zoo, and other venues. Then the juniors party vigorously and late into the night — and mostly do so at the expense of various publications and other suppliers to the finance community.
All the 182 countries that belong to the World Bank and the International Monetary Fund are represented, usually by both finance minister and central bank chairman. All their expenses are paid by the Bank or the Fund. And all the world’s 200 largest banks are there as well, but at their own expense. Some of these banks have delegations of 30 and 40 people.
Not much work is required. Some of the pleasantries exchanged in the corridors will turn into business deals — and everybody’s Rolodex certainly grows larger. But the closing communiqués of the IMF/World Bank annual meeting are in large part ritual.
And where in fact real decisions must be made, the terms — if not the details — are arranged before the first limousine ever takes the first delegate from Dulles International Airport to his or her hotel.
After all, “the deputies” — that is the deputy finance ministers from key economies around the world have already met in Paris or Tokyo or Rome to write the draft of the communiqué. Their document will be presented in Washington to selected representatives of the outlier nations of the global economy. Noblesse oblige, this presentation happens well before the public meetings begin on Monday.
If disagreements persist, they are resolved on the Saturday before the Annual Meeting opens for real. That day, the finance ministers of the seven big financial powers (the list includes Canada, but not China or Russia) traditionally meet as a group.
But these official meetings are only part of the show. Perhaps the most important side event is the traditional Monday morning conference sponsored by the Group of Thirty, a think tank established in the late 1970s with help from the Rockefeller Foundation.
The anointed Thirty include active executives of the Bank for International Settlements in Basle, the Banque de France, the European Central Bank, the Bank of England and the Bank of Israel.
In addition, former chief executives of the U.S. Federal Reserve, the Bank of Japan, Danmarks Nationalbank, the International Monetary Fund and the Federal Reserve Bank of New York attend — as do half a dozen academics as well as present (or recently retired) senior executives of banks such as Citibank, Dresdner Bank, Deutsche Bank, Goldman Sachs, Industrial Bank of Japan, Merrill Lynch, J. P. Morgan and Morgan Stanley. They all belong to the club.
In years when the World Bank/IMF meeting is in Washington, the Group of Thirty affair occurs at the Pan-American Union or in the top-floor meeting room of the Federal Reserve’s Martin Building. Beneath the practiced mallet of Paul Voicker, a former Fed chairman, the conference proceeds in an orderly fashion for three hours through presentations by a dozen speakers. It always, miraculously, ends on time.
Private bankers, finance ministers and central bankers — since 1987, the list has always included Federal Reserve chairman Alan Greenspan — present their views on the world’s financial situation and respond to a few questions from the audience.
None of that will happen this year. In the aftermath of September 11, the Washington police and the Secret Service said they could not guarantee the security of the delegates, making it impossible for the international financial institutions to stage their show.
It was easy to make fun of that show, but something has bee been lost. The participants in the international economy need to know which of their colleagues will say anything — and which will say nothing or who is straight forward — and who isn’t. And basically the only way you find that out is face to face.
Like fans of the Washington Redskins, the U.S. capital’s football team, which is destined for a losing season, we will have to wait until next year.