Michel Camdessus, the cultured French economist who as head of the International Monetary Fund oversaw huge and often painful bailouts for country after country roiled by financial crisis, announced yesterday he will step down early in the new year.
He cited unspecified personal reasons for his departure after 13 years on the job. His announcement, made to hundreds of IMF employees gathered at its headquarters on 19th Street NW, comes at a time when global economic conditions are generally looking up after two years of turmoil.
More than two years remain in Camdessus's current five-year term. Serving them out "would be inappropriate in a world in permanent need of renewal of its institutions," he told his staff. Camdessus, now 66, had been hinting for months that he would soon leave, triggering the start of succession politicking. By custom, the countries of Western Europe pick the IMF's "managing director," as the top job is known, with its executive committee approving the selection.
Names being mentioned include Gordon Brown, Britain's top finance official; Andrew Crockett, head of the Bank for International Settlements; German Deputy Finance Minister Caio Koch-Weser; Mario Draghi, an Italian finance official; Nigel Wicks of the British treasury; and Horst Kohler, head of the European Bank for Reconstruction and Development.
President Clinton and Treasury Secretary Lawrence H. Summers, who have worked closely with Camdessus in recent years, yesterday issued statements of praise. At the same time, as he nears the 13-year mark, officials do not appear to have made a concerted effort to get him to extend his stay.
Members of Congress have been criticizing the IMF for years, focusing recently on what is perhaps the biggest item of unfinished business of Camdessus's tenure: the huge aid program to Russia. That country remains stuck in economic crisis.
Allegations that some IMF money has been diverted to illegal purposes have dogged the fund for months. So far, no evidence that fund money was misused has come to light, something Camdessus has pointed out often, sometimes with rare testiness.
"The fund was pushed to provide support for Russia as much for political reasons as for economic ones," said Robert Hormats, vice chairman of investment bank Goldman Sachs Group Inc. "It was put in a very difficult position for donor countries to bend further than it would for most other countries. . . . He should not be blamed for Russia."
An elegant but unassuming man who managed occasionally to spin humor out of the drudgery of macroeconomics and international finance, Camdessus went on radio and speaking tours to defend the fund's policy. When a news correspondent from Vatican City asked him about debt relief in September, Camdessus noted that countries receiving this help will have to meet conditions. "This will not be time for them to relax and to wait for things to fall from heaven," he said, "and I tell you because you have the keys of heaven--no?--in the Vatican."
Few people had heard of the IMF before his arrival in 1987. But it broke onto the front pages again and again as it put together jumbo rescue packages for Mexico in the early 1990s, then the faltering "tiger" economies of East Asia and Russia and Brazil in the late 1990s.
"He guided the fund through a very difficult time," said Hormats. "I think while the fund made its share of mistakes, the world is certainly better off because it was there."
To critics on the right--Senate Majority Leader Trent Lott (R-Miss.) once dismissed Camdessus as a "socialist from France"--he operated in secrecy with little accountability. The fund's bailouts--$100 billion worth went to East Asia in 1997 alone--were said to weaken international stability in the long run, by making investors willing to put money into shaky ventures on the assumption the IMF would save them.
To the left, he was a heartless accountant, who without thought to the human consequences routinely demanded that teetering countries cut social programs such as price supports for food.
Camdessus himself argued he worked to reduce poverty from the moment he arrived. "Inflation is the most cruel tax on the poorest of countries," he told reporters yesterday, pointing to IMF efforts to control it.
In an interview, he said in countries that the IMF aided a "virtuous circle" was created as better monetary policies and poverty reduction reinforced each other to the benefit of inhabitants.
In Brazil, Camdessus won points earlier this year when he admitted the IMF needed to recognize the social costs of some of its policies, said Eustaquio Reis, director of research for the Institute of Applied Economic Research, a Brazilian government agency.
But other Brazilians continue to feel contempt for the agency. "They force policies on us that aren't good for us, that don't fit our model," said Aline Winckler Brufato, a 28-year-old researcher at the Federal University of Rio de Janeiro. "They're absurd for Brazil."
Camdessus studied at the University of Paris and earned graduate degrees in economics. He worked in his country's treasury and at the European Union, then headed the French central bank in 1984.
Correspondent Steven Buckley contributed to this report from Rio de Janeiro.