Workers Try to Halt Cyanide Spill

BAIA MARE, Romania�Workers toiled yesterday to prevent more cyanide from spilling out of a gold mine and reaching European rivers as children played in the snow nearby.

The poison streamed from a containment dam at the mine near Baia Mare on Jan. 30, flowing down the Szamos and Tisa rivers into Hungary and Yugoslavia and back into Romania on the Danube.

Australia-based Esmeralda Ltd., co-owner of the mine, has denied responsibility for the spill, saying the extent of the poisoning has been exaggerated. Romania has also said that the damage was overstated and that it has suffered the most.

In Yugoslavia, ecologists warned of long-term food poisoning, not only through the cyanide but also because of concentrations of lead and other toxic metals that have already killed tons of fish in the Danube and Tisa.

Russians Shell Rebel Strongholds

ALKHAZUROVO, Russia�Explosions shook the foothills of southern Chechnya as Russian artillery began round-the-clock shelling of Chechen rebels� mountain strongholds, where they retreated after losing control of the regional capital, Grozny.

Most of the rebels who survived the exodus are believed to have joined comrades; Russian officials estimate that as many as 8,000 rebels are based in the mountains.

Serbian Media Decry Exclusion

BELGRADE�Independent Serbian media said they had been denied accreditation to cover a meeting of Yugoslav President Slobodan Milosevic�s Socialist Party, the latest sign of increasingly strained relations between nongovernment media and the ruling coalition.

The party, founded by Milosevic 10 years ago as a successor to the long-ruling Communists, will hold its fourth congress today.


Indonesia Pledges East Timor Trials

JAKARTA, Indonesia�Indonesia, under the threat of an international war crimes tribunal, vowed to begin in three months the trials of those accused of being behind last year�s atrocities in East Timor.

After talks with President Abdurrahman Wahid and Vice President Megawati Sukarnoputri, U.N. Secretary General Kofi Annan said calls for a U.N. tribunal would be revived if Indonesia fails to honor its promise to punish those responsible. But he praised Wahid�s wide-ranging reforms after just four months in power and his efforts to curb the military�s political power.


Canada Unbending on Oil Firm Sanctions

OTTAWA�Canada indicated it would stick to its decision not to sanction a Canadian oil company operating in Sudan despite a U.S. move to punish the firm and its partners in a southern Sudan oil consortium.

�It is not up to Washington to dictate to us our line of conduct,� International Trade Minister Pierre Pettigrew said after the U.S. Treasury Department announced it would impose sanctions on Talisman Energy Inc. and its partners.

Canadian Holocaust Center Spurns Haider

MONTREAL�The Montreal Holocaust Center turned down a request by Joerg Haider, the leader of Austria�s far-right Freedom Party, for a guided tour while he was in the city on an unofficial visit.

Moshe Rosen, president of the Montreal Jewish Council, said if Haider wants to learn more about the Holocaust, he can find plenty of lessons in his own country.

Although Haider has apologized for statements in which he praised aspects of the Nazi regime, numerous Western countries, including Canada, have downgraded diplomatic relations with Austria since his party became part of the government this month.

Elian�s Father Requests Diplomatic Visit

HAVANA�Elian Gonzalez�s father asked Cuba�s foreign minister to arrange for Cuban diplomats in the United States to visit his 6-year-old son in Miami, according to a letter published yesterday.

�We are worried not only about his prolonged kidnapping,� Juan Miguel Gonzalez wrote in a letter published in the Communist Party daily Granma. �We lack direct information about the concrete conditions to which he is subjected in his daily life.�


Israel Protests Vatican-Palestinian Deal

JERUSALEM�In a strong protest against an agreement between the Palestinians and the Vatican, Israel summoned the pope�s envoy for clarifications on the deal that condemns Israel�s hold over all of Jerusalem. The agreement covers the status of churches and the freedom of worship in the Palestinian territories.

Eitan Bentsur, director of the Israeli Foreign Ministry, called the timing of the agreement �deplorable,� an apparent reference to next month�s Holy Land visit by Pope John Paul II.

Israel captured East Jerusalem from Jordan in the 1967 Middle East war and annexed it into its capital. The Palestinians hope to establish the capital of a future state there. The city�s fate is to be decided in a final peace accord between the sides.

Jordan Indicts Terrorism Suspects

AMMAN, Jordan�A military prosecutor has indicted 13 suspected terrorists linked to the activities of fugitive Saudi financier Osama bin Laden, Jordanian government officials said. The 13 suspects�11 Jordanians, one Iraqi and one Algerian�were charged with 11 counts of terrorism, an official said.

The Next Chairman of the IMF?

Feb 17



The European Union (EU) has thrown its support to Germany�s Caio Koch-Weser in a bid to make him the next chairman of the International Monetary Fund (IMF). However, the United States is hesitant to support him. It is unclear whether the United States will stand by Europe in this choice as the IMF�s major donors pursue divergent economic and political strategies.


European Union (EU) foreign ministers informally agreed Feb. 14 to support the candidacy of Germany�s Caio Koch-Weser, who is aspiring to become the next chairman of the International Monetary Fund (IMF). Koch-Weser heads the German Finance Ministry�s international affairs bureau and worked at the World Bank for 25 years where he specialized in development issues. The decision to support him follows months of bickering within the union over who will replace Michel Camdessus, who stepped down as managing director in November 1999.

Though Koch-Weser had been suggested as a candidate immediately after Camdessus stepped down, it has taken months of internal wrangling for the EU to come to a decision. The major stumbling block was winning over French officials, who were hesitant to support the German out of fears that he might not gain sufficient international support.

Indeed, Koch-Weser does face skeptics, particularly in Washington. U.S. Treasury Secretary Larry Summers has been cool to Koch-Weser�s candidacy because of his lack of experience and his background as a development economist, instead of a fund manager. Summers� hesitancy also reflects broader fears: the United States is losing its grip on the IMF, an important foreign policy tool. Washington�s quiet disapproval of Koch-Weser is cause for concern in Europe; the United States has traditionally supported Europeans to lead the fund.

But increasingly, Europe, Japan and the United States have divergent economic and political agendas. The American agenda has shifted from using the fund to promote a broader security strategy � such as containing Soviet influence in the 1980s � to promoting tight monetary policy and economic reforms. During 1983 and 1984, for example, the IMF lent some $28 billion to developing countries in Africa and Latin America to keep these regions in the camp of the West. In 1995, loans to Mexico and Russia, $18 billion and $6.2 billion respectively, were also meant to maintain liberal economic reform in these nations. The same thing occurred in 1998, when the IMF committed $35 billion in loans to Indonesia, Korea and Thailand to help them deal with their financial crises.

Ultimately, the money is not as important as the strategic value of the recipients to the IMF�s three major donors: Europe, Japan and the United States. It is no coincidence that these three blocs are the largest contributors to the fund and, by extension, the strongest voices in choosing a chief. The EU holds 30.13 percent of the votes, Japan 5.67 percent and the United States 18.25 percent.

So far, the only formal challenger to Koch-Weser is a Japanese Finance Ministry official, Eisuke Sakakibara. Japan wants an IMF with a loose money policy that doesn�t bind lending to fiscal reform.

Sakakibara, otherwise known as Mr. Yen, reflects this thinking. However, Sakakibara is the least likely candidate to assume the position. The United States and Europe will seek to block a candidate who would represent such divergent strategic interests.

There are also rumors that the United States may nominate American Stanley Fischer, who as the IMF�s deputy managing director has been effectively running the organization. Fischer, too, may be too tainted by the IMF�s slow reaction to Asia�s financial collapse to be viewed as a neutral candidate by the Europeans and the Japanese.

Although Europe is the strongest single bloc, the United States is still nearly strong enough to block any IMF nomination. Japan has only a small fraction of the vote. France and Britain, the other two major contributors, will be hard pressed to float their own candidates. Europe is unlikely to promote another French candidate; and mainland Europe is unlikely to choose a British candidate. From nearly any standpoint, the logic of the situation leaves Germany as the likeliest source of the next chairman, and Koch-Weser is the unequivocal favorite of Chancellor Gerhard Schroeder.

In a way, the chairmanship debate resembles the recent internal dispute over leadership of the World Bank. But given the different efforts of the two institutions � one focused on the world�s poorest nations, the other on developing economies � it is unlikely that the IMF selection politics will truly mirror those of the World Bank.

Instead, the United States will be forced to choose either Europe�s candidate or Japan�s, float Fischer or another candidate of its own, or agree on a compromise candidate waiting somewhere in the wings. So far, no other serious contenders have surfaced. The EU will not back away from its support of Koch-Weser. This means that the United States will have to decide. Will it follow its own policy or binding itself to Europe�s strategy? 17

All Over the Globe is published by IPA House.
© 1998 IPA House. All Rights Reserved.