Developing nations sidelined for IMF top job By Emad Mekay

{Developing country members of the International Monetary Fund (IMF) have reiterated the call for openness and transparency in deciding on the next Fund chief, as concerns persist that the selection process is skewed in favour of the European candidate}
A coalition of developing countries at the International Monetary Fund issued a tacit warning on 23 July that the highly political process of selecting the next IMF chief may be intimidating non-European countries from putting forth candidates, and further discrediting the institution.

The statement by the Group of 24 (G24), which operates as an association of minority shareholders in the IMF and the World Bank and which has previously complained about the lack of democracy at the IMF, was also seen as one of the clearest signals of distrust in how the IMF is being run. It came as sources at the IMF tell IPS that highly qualified candidates from developing nations are hesitating to apply for the managing director position because they see the process as skewed in favour of the European candidate, Dominique Strauss-Kahn. They say that the near-unanimous agreement among European finance ministers to back Strauss-Kahn makes the successful outcome of his nomination a done deal.

A source inside the Fund, who wished to remain anonymous, says that South African Finance Minister Trevor Manuel is a favourite of some countries, even though he has not publicly expressed interest. They have confided that they do not want to put his name forward before receiving guarantees that transparency and democracy pledges by rich nations will be honoured. Sources say that Manuel would be a highly competitive candidate given his long-term tenure as chairman of the Joint Development Committee which coordinates activities of the IMF and the World Bank, and his credibility in dealing with many of the issues facing poor nations.

The 24 member Board of Executive Directors that helps run the day-to-day affairs of the Washington based IMF recently asserted that the selection of the next managing director would be transparent and democratic and that all 185 members of the Fund were free to nominate candidates. The board vowed that this time around, it would be a merit-based process with clear criteria, no geographic preference, and the objective of selecting the managing director by consensus rather than by a simple majority of votes. But on 10 July, the European nations, who together have the largest bloc of votes on the board, quickly rallied behind the French candidate, former finance minister Strauss-Kahn, effectively declaring that they will not even consider others.

“A strong commitment to an open, transparent and multilateral selection process will greatly enhance the legitimacy and effectiveness of the next Managing Director and of the institution at a time when the IMF is confronted with fundamental challenges to its relevance and viability,” said the statement.
Under an unwritten agreement with the United States, European countries choose the head of the IMF in return for Washington naming the president of the Fund’s sister institution, the World Bank. The G24 has consistently called for a change of this practice.

Civil society groups, think-tanks, some economists and developing nations have long urged a followup of recommendations made in April 2001 by a joint World Bank-IMF working group on how to choose the managing director. The recommendations called for opening up the process. But although the two institutions’ executive boards adopted the recommendations as guidance for the future, they were never implemented.