Next IMF chief needs to be selected on merit
For a while it seemed that the global economic crisis could leave a good legacy to the IMF by democratising the way its leadership is selected.
At the height of the turmoil, long-held economic values were questioned together with the West’s dominance over the world economy.
Many leaders called for a more inclusive global recovery with developing countries given a stronger voice in global economic affairs.
The governance of the International Monetary Fund (IMF) and the World Bank—long perceived to be acting in behalf of the interests of a few powerful and rich countries—came under increased scrutiny.
In 2008, G20 meeting in Pittsburgh pledged to appoint senior leaders of international institutions “through an open, transparent and merit-based process”.
The Fund confirmed this by committing to “adopt an open, merit-based and transparent process for the selection of IMF management”.
These commitments are being put into test with the early resignation of Dominique Strauss-Kahn as managing director of the Fund.
Global civil society has wasted no time in calling for a fair, merit-based and transparent selection of the new IMF chief.
The head of the Fund traditionally comes from Europe, but the recent commitments imply that this practice should end and pave the way for candidates from developing countries to be considered for the post.
Unfortunately, it looks like leaders from Europe are breaking their pledge and are now making sure that a European will continue to lead the Fund.
French finance minister Christine Lagarde has announced her candidacy and a number of European countries, including the UK, have already stated their support from her, without even waiting for the close of nominations.
European economies are still feeling the pain of the crisis with some, like Greece and Portugal, needing IMF bail-outs.
More than ever before, the IMF is relevant in western Europe and no doubt rich countries will want their interests to dominate the way the Fund carries out its work.
The opportunity that the global economic crisis presented to reform IMF governance is quickly slipping away.
European leaders are arguing that a chief from Europe is needed in light of the Fund’s current involvement in the region.
If we are to go by this logic, then a national of a developing country should have led the IMF in the past decades given that it was mainly involved with low and middle income countries prior to the global crisis.
Time for change
The main contention is not whether a European or someone from a developing country should lead the Fund next.
The issue is whether rich, powerful countries will allow a fair and merit-based selection of new IMF managing director.
This is a bold move towards reforming the governance of the Fund and ensuring that it is led by a competent individual who represents the wider interests of its members, and not just of a few powerful countries.
What is at stake here is not just who gets to lead the IMF next, but more importantly, a step towards a more just and democratic global economic system which could be something good that came out of the crisis.