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IMF chief should not be chosen on nationality: G-20

IMF chief should not be chosen on nationality: G-20
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First Published: Sun, May 22 2011. 07 15 PM IST
Updated: Sun, May 22 2011. 07 15 PM IST
Sydney: Merit, not nationality, should determine who replaces Dominique Strauss-Kahn as the chief of the IMF, the finance ministers of Australia and South Africa said in a joint statement on Sunday.
Australian treasurer Wayne Swan and South African finance minister Pravin Gordhan, who jointly chair a G20 committee on reform of the IMF, said the convention that the fund’s managing director was a European was out of date.
They referred to a G20 agreement adopted in Pittsburgh in 2009 that called for an open selection process for the IMF chief, saying that agreement should be honoured.
“The global financial crisis demonstrated that the world needs a strong IMF and a strong managing director,” they said. “For too long, the IMF’s legitimacy has been undermined by a convention to appoint its senior management on the basis of their nationality.
“In order to maintain trust, credibility and legitimacy in the eyes of its stakeholders, there must be an open and transparent selection process which results in the most competent person being appointed as managing director, regardless of their nationality.”
The financial institutions created by the 1944 Bretton Woods conference have operated for 60 years under an informal but rigidly adhered to rule that the IMF is headed by a European while an American leads the World Bank.
Separately, Swan pointed to the increasing importance of emerging economies, particularly in Asia, as a reason for considering non-Europeans for the post.
“The tradition of automatically appointing a European to the role is one that’s long past its use-by-date given the shift of global economic weight to emerging economies, particularly in Asia, over the past few decades,” Swan wrote in a regular economic note.
“The most suitable candidate may well come from Europe, but I think it’s essential that the appointment not be limited to any one nation or continent. This is why I’ll be working with my international colleagues to ensure that the appointment to this most important of global institutions is based on merit.”
Strauss-Kahn, who had been widely seen as a potential candidate for France’s presidency, resigned after being charged with trying to rape a hotel housekeeper on 14 May. He is currently under house arrest in New York.
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First Published: Sun, May 22 2011. 07 15 PM IST