Of Money and Power

I just finished the week of conferences called The IMF-WorldBank Spring Meetings. Made up of the International Monetary and Financial Committee, the Developpement Committee and many preparatory meetings, the summit is the G7 Finance ministers meeting.
I have been working for these conferences for most of 25 years. Until recently, the US Secretary of the Treasury gave the tone, and everybody else, donors and beneficiaries aligned themselves, more or less on his august pronouncements. But given the parlous state of US finances, the loss of respect for the nation that launched a preemptive war on Iraq, Mr Snow had little to say. Instead, and for the second year in a row, Mr Zhou, the Chinese governor, was the star. Not only did he take the lead, but he seemed to find many disciples. What would be the used, he scoffed, of revaluating the yuan? Americans would not buy less Chinese goods and more US goods. The US no longer manufacture most of the products they buy from China...
You sense now, in the austere surroudings of our Financial Temples, the passing of the torch. Sure, China is a very long way from passing the USA economically, but its mounting power has already been acknowledged in Washington.
I also had the opportunity to work on the visit of many African ministers who came to pay their respects to the Bretton Woods institutions. Respects or good-byes?
It turns out that emerging countries (Argentina, Turkey, Brazil,) are turning their back on Washington. They reimbursed their loans and will go to private banks from now on.
African countries have seen their debt "forgiven" by the West. That means no more reflows to the Bretton Woods institutions, the IFIs.
In the medium term, deprived of reimbursements and forced by the US to only give grants to assisted countries, the IFIs will soon run out of funds, or lose their AAA rating and thus their raison d'etre.
The Meltzer report, which advocated the slow death of the IFIs through the very methods, had been rejected by the Clinton Administration. It seems that the Bush Administration has finally delivered to its masters, the head of its IFIs rivals on a silver platter.