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The current Chinese nomenklatura seems confident that they will win the second Cold War, because in the west the politicians, bureaucrats and intellectuals are for sale, and China clearly has the money to buy them. They believe that whoever in the west is not sold for one bag of money is sold for two, and that if some are not sold, those who are sold will take care of those who are not.
A good example of the problem was that Kristalina Georgieva, director of the International Monetary Fund (IMF) was accused of having manipulated data in favor of China when she was the executive director of the World Bank. Despite the Biden administration’s usual accommodating stance towards supranational bureaucracies, Secretary of the Treasury Yellen felt compelled to distance herself from Georgieva over the alleged manipulation of data in favor of Beijing, but in the end, the IMF board decided to confirm Georgieva in her strategic position.
Beijing seems to rely on being able to influence by obscure means supranational organizations that have lost their purpose and replaced their founding agendas, giving its officials ample room to pursue hidden agendas. Multilateral groups such as the IMF, the World Bank, or the Organization for Economic Cooperation and Development (OECD) were created under consensuses of reasonable political legitimacy for purposes that in most cases no longer have a raison de être. They are opaque supranational bureaucracies with no real scrutiny. And like all bureaucracies, they cling to their budgets, inventing new and growing functions to survive and grow.
When supranational bureaucracies decided to redefine their original purposes, they authorized themselves to impose new rules and regulations on the international community. To achieve this, they leveraged the great powers, aligning their own agendas with certain interests of the larger G20 countries. Mainly “national” interests manipulated by concentrated interest groups that capture rents through anticompetitive ideological agendas.
In 1944, representatives from 45 countries went to Bretton Woods to establish a post-war monetary system. They created the IMF and the World Bank. The latter to promote development in member countries and the Fund to maintain the balance of payment stability in the gold-dollar standard fixed exchange rate system they established at Bretton Woods. But when in 1971 the Nixon administration ordered the “temporary” closure of the gold window, abandoning the Bretton Woods agreements, it initiated a collapse of the system that was completed in 1973.
Without a fixed exchange rate regime, the IMF lost its raison d’être and a World Bank with no real achievements to show for promoting development was an organization of dubious usefulness. Ideally, both should have been closed by the end of the 1970s. Or at least the IMF should have been closed while the World Bank’s functions, strategies, limits and transparent scrutiny mechanisms were being redefined.
But both organizations survived and, without any scrutiny, redefined their functions, by and for themselves, increasing their bureaucracies. They pushed through technocratic measures with generally dubious and sometimes clearly disastrous results. Their activities have overlapped, their agendas and functions ranging from similar to identical. With ill-defined responsibilities, they have become increasingly opaque and confusing. Their programs attack fiscal competition and are disguised as being oriented towards anti-market, anti-Western and neo-Marxist ideological content.
Decades ago, these supranationals left behind ideas such as the Washington Consensus that attempted to reorient economies in structural crisis towards free-market reforms, including privatizations of inefficient and corrupt government corporations. In the Southeast Asian economic crisis, IMF measures were detrimental. Its intervention, together with the European Union, in the Greek debt crisis worsened the situation and prevented fundamental structural adjustment.
As long as the major Western powers are inclined to ideologically radicalize anticompetitive agendas, these opaque supranational bureaucracies will leverage those interests to push their own hidden agendas. And they can easily become prone to Beijing’s hegemonic interests for unspeakable reasons.
Guillermo Rodríguez is a professor of Political Economy in the extension area of the Faculty of Economic and Administrative Sciences at Universidad Monteávila, in Caracas. A researcher at the Juan de Mariana Center and author of several books // Guillermo es profesor de Economía Política en el área de extensión de la Facultad de Ciencias Económicas y Administrativas de la Universidad Monteávila, en Caracas, investigador en el Centro Juan de Mariana y autor de varios libros