Rats, they say, are first to desert a sinking ship. It was therefore with great relief that Horst Kohler resigned as the IMF boss in March.

Experience taught him that the IMF was even more of a marginal player than his previous fiefdom, the European Bank for Reconstruction and Development.

The Fund was set up to manage a fixed exchange rate system. It struggled to find a role since the collapse of the Bretton Woods order. The Second Amendment to its Articles of Agreement in 1978 turned it into a policing agency with emphasis on the "Surveillance".

The IMF has proved to be an inept and corrupt policeman. This is amply illustrated by the three self-evaluation reports published by its internal "Independent" Evaluation Office during 2002-2003.

These reports analyze the IMF's performance in handling financial and macroeconomic crisis in several developing countries. Surveillance is seen as inadequate as it always failed in anticipating a crisis.

The reports lament the Fund's inability to identify corporate balance sheet vulnerabilities. Theoretical paradigm underlying surveillance is grossly inadequate when the IMF responds to a typical "twin" crisis - a balance of payments crisis linked to a banking crisis.

The standard policy prescriptions exacerbate the malady in such circumstances and magnify the costs of "adjustment". Neo classical theory is woefully inadequate as a basis for crisis forecasting since it ignores the possibility of multiple equilibria, and expectations generated by such analysis are usually wildly over optimistic.

This problem is further complicated by the poor quality of the data produced by resident missions and the contempt with which the IMF ignores data produced by agencies such as the Bank of International Settlements. All three reports lament the poor quality of the IMF's staff specially at its resident missions.

The reports also underline the corruption and note that "the macroeconomic projections in the IMF supported programmes are necessarily the outcomes of negotiation with the national governments".

Surveillance is clearly a futile exercise if forecasts are subject to political negotiations. Authors such as Sachs, Stiglitz, Feldman and Khatkate have often noted "wrong diagnosis and worse prescriptions of the IMF" in dealing with the crisis.

It has also been argued that the IMF's insistence on fiscal cutbacks and interest rate escalation have often deterred the credit rollover that is usually a pre-requisite for capitalist crisis management.

Private lenders have rapidly lost faith in the Fund as it lurches from failure to failure. The continued use of the Financial Programming and Policy (FPP) model as a basis for determination of conditionality packages is also widely condemned.

Ineptness and corruption has made IMF a prisoner of its defaulters. Today Brazil, Turkey and Argentina account for almost 75 per cent of the Fund's general outstanding credit.

The sums owed by these countries are more than 20 per cent of the total resources. Argentina has shown how this fundamental vulnerability can be exploited. It services it's debt by fresh borrowings from the IMF while continuing to resist pressure from the private sector creditors for accepting unfavourable rescheduling and repayment arrangements. The IMF lost much market credibility when it released its latest tranche to Argentina in March. It did so because it could not afford an Argentinean default.

When countries such as Argentina and Brazil can browbeat the IMF, its global irrelevance becomes dramatically self-evident. The IMF's raison d'etre is the management of global balance of payments adjustment.

Today global capitalist order is seriously threatened by balance of payments maladjustment. The American imperialism is running up an unsustainable current account deficit to finance its state terrorist adventures around the world.

On the other hand Europe and Japan and other East Asian economies produce huge surpluses, maintain competitive exchange rates and recycle capital inflows into foreign exchange reserves. During 1998 to end 2003, the Asian emergent economies accounted for over 85 per cent of the increase in global foreign reserves.

The increase in the reserves of seven Asian countries excluding Japan during this period was about $700 billion, 470 per cent larger than the total usable resources available to the IMF. The IMF simply does not have the resources to deal effectively with a serious financial crisis.

It is manifestly evident that the IMF is a shoe-string operation and neither the major capitalist countries nor the major players in capitalist financial markets need to take it seriously - that is why the White House contemptuously ignores.

the IMF strictures about it's fiscal profligacy. The IMF surveillance has never been tolerated by America, Europe and Japan and as the IMF's resources dwindle in relative terms it will continue to be brushed aside both by its major share holders and private financier institutions.

So, will the IMF precede the WTO into the dustbin of history? It must reinvent itself if it is to avoid this fate and the World Bank has shown how this can be done. In February this year USaid praised the World Bank for gathering intelligence in Iraq.

Apparently the World Bank, despite announcing a widely publicized withdrawal from Iraq in August 2003, continues to produce a monthly confidential report on that country which is widely circulated within the imperialist community. The World Bank maintains an army of quislings in Iraq and has developed a special relationship with the Occupation Coalition Provisional Authority (OCPC) in Iraq.

The International Finance Corporation (IFC), the private sector lending arm of the World Bank, is also keen to enhance it's serviceability for imperialist powers. The IFC executive vice president Peter Wolcke recently announced a commitment to include the human rights performance by poor governments within the social and environmental conditionalities (the Equator Principles), private banks are expected to insist upon when lending to poor counties.

Many other multilateral and bilateral development agencies have willingly added intelligence gathering to their organizational mandates in Afghanistan, Iraq, Kashmir and Palestine.

Since the collapse of the Soviet Union, all the UN agencies have vied with each other to become instruments for the execution of the American foreign policy. When hundreds of thousands of Iraqi children were dying due to imperialist bombing and the UN sanctions, the UNDP, the World Bank, the ILO, the IMF and other multilateral agencies did not concern themselves with the misery that was being imposed upon the Iraqi people.

After America's brutal occupation of Iraq and Afghanistan, the World Bank, the IMF and the UNDP entered these countries. Multilateral agencies thrive in the unipolar world by serving the American imperialism.

The IMF can carve out a new role for itself by accentuating its subjugation to America. The ground work for this was laid at the 2002 annual meetings of the Fund and the Bank when their organizational mandate was broadened to enable then to participate in America's crusade against 'money laundering' Anne Krueger, the incumbent acting managing director is repositioning the IMF to embrace the American subjugation.

The imperialist press recognizes that consolidating American dominance over the IMF is a precondition for the latter's survival. So the Financial Times recommends a Chilean protege of the Bush Administration as the next IMF managing director. The Economist suggests the name of Clinton's treasury secretary. The name of America's present ambassador in Afghanistan may also be added to this list. He is the most appropriate candidate for leading the IMF suitably dressed up as Davy Crocket with a lasso in one hand and a pail full of oats in the other.