Who should lead the IMF?

Two years ago, leaders of the G20 agreed that: ‘The heads and senior leadership of the international financial institutions should be appointed through an open, transparent, and merit-based selection process’. The statement reflected growing pressures to reform as emerging economies (notably the BRICs) flexed their muscles and demanded more power over decision-making. Last year’s reform of votes and IMF Board membership was widely seen as adding momentum to calls for the successor to Dominique Strauss-Khan to be chosen from outside Europe, ending the informal agreement that sees a European heading the IMF, and a US-citizen in charge of the World Bank.

For some, the sudden resignation of Strauss-Khan following events this week is an opportunity to put that commitment to the test. Brazil’s finance minister, Guido Mantega, has called for the appointment to be made on merit, not on nationality; whilst South African finance minister, Pravin Gordhan, has called for someone from a developing country to be given the top job. Even David Cameron has suggested the time might be right to appoint from outside of Europe (albeit for what look like the entirely cynical reason of blocking Gordon Brown, who had been touted as a strong contender for the post).

However, it looks increasingly like it will be business as usual. Angela Merkel, and European Commission President Jose Manuel Barroso, have both called for a European candidate to replace the out-going Strauss-Khan, and Christine Lagarde currently appears to be the front-runner.

There are compelling arguments for why customary practice should be followed in this appointment. Whilst many anticipated Strauss-Khan stepping down this year in order to run for the French presidency, his departure has been (for obvious reasons) more sudden and dramatic than planned for. And it comes at a time when the IMF is deeply involved in the European economic crisis. There are those who argue that this requires a European with a deep knowledge of the region to take the lead (although, surprisingly, when it comes to economic crises in other regions, this argument has not been to the forefront in selecting the head of the IMF). Perhaps more importantly, the politics of the appointment are heavily stacked against anything that might upset the usual arrangements. The US would be deeply reluctant to lose control over the World Bank, and is therefore unlikely to push against European interests which might spark retaliatory measures when Robert B Zoellick goes. And European leaders would probably only countenance an end to their domination of the IMF, if the US lost theirs over the Bank. The result, stalemate.

This decision would be, however, wrong. Firstly, and most practically, confining the choice of candidate to Europeans means a huge pool of talent is ignored. The names of Kemal Dervis (Turkish), Trevor Manuel (South African), Agustin Carstens (Mexican) have all been raised as potential successors in the past. There are many excellent potential candidates who are ignored for no other reason than they are not European. For a highly professional organisation, this is an untenable position. Whilst the financial crisis in Europe is serious and requires close and careful attention, are only Europeans capable of this? The argument for intervention in African, say, economic crises has often been underscored by a ‘they got themselves into this, and outsiders have to get them out of it’ mentality. Funny how this argument disappears when it is the capitals of Europe that are under scrutiny.

There is also the importance (in my opinion, the most significant issues) of the moral case. It is probably true that bringing in a non-European would make little real difference to IMF policy (unlike, say, a substantial further reform of voting). But such an appointment would be far from a cosmetic change. It is saying something important about a commitment to equality and equity, to recognising talent, to the idea that the IMF is a development tool for all, not a tool for western power and politics.

It looks like the succession will be another stitch-up. But wouldn’t it be great if European leaders could take the plunge, and make a physical demonstration of the values they champion in G20, G8 and other international summits. Change has to start at some point. Let us make that change now.


About Mike Jennings

I am Reader in International Development and Head of the Department of Development Studies at the SOAS, University of London. I research, teach and write on Africa, and the history and politics of international development in sub-Saharan Africa. Research areas include: - The history of development in Africa, from the late nineteenth century to the current day - Politics of East Africa (Kenya, Tanzania and Uganda) - the role of non-state providers (NGOs, FBOs and self-help groups) in welfare service provision - Social aspects of health, including HIV and AIDS, and malaria
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