22 August 2007
While western European countries continue to assert naming rights to run the IMF, Russia makes a surprise nomination.
The status of democratic reforms at the IMF was recently summed up well by an executive director at the IMF: “What we hear from European colleagues [is] that they have the right of birth to run this institution indefinitely. This is very disappointing” (Financial Times, August 6, 2007).
Since the IMF’s inception, western Europeans have claimed the right to appoint its leader (as the US has asserted at the World Bank). Despite calls from governments, academics, and civil society organizations for the IMF to conduct a fair, competitive, and transparent selection process for its new leader, it appears the fix is in. Many European governments have declared their support for France’s candidate—Dominique Strauss-Kahn—even before the official nomination process has concluded (August 31).
On August 22, however, Russia “gatecrashed the traditional EU monopoly on choosing the head of the IMF by nominating a former Czech prime minister and challenging the European Union to allow fair competition for the post” (AFP, August 22, 2007). Russia nominated Josef Tosovsky, a Czech national who is currently head of the Financial Stability Institute (FSI) for the Bank for International Settlements in Basel, Switzerland. Tosovsky was the former governor of the Czech National Bank who oversaw the transition from a communist to capitalist economy. He also briefly took office as prime minister during a political crisis in 1997. However, the seriousness of this challenge is unclear as the Czech Republic has stated it will not support Tosovsky and has thrown its support behind Strauss-Kahn.
While most western European countries have lined up behind Strauss-Kahn, the United Kingdom has sent conflicting signals. At a meeting in Brussels in early July the UK supported Strauss-Kahn’s qualifications. But in a letter on July 19 to the UK NGOs, U.K.’s Chancellor of the Exchequer, Rt. Hon Alistair Darling, wrote that “Both myself and the Prime Minister have made clear that the UK supports an open, transparent and meritocratic process for selecting the next Managing Director. Most importantly, I would like to reiterate that the UK will support whoever we believe is the best candidate for the job, regardless of nationality.”
Governments and civil society groups have called for an open, merit based, and democratic selection process. The G24 called for adherence to a “merit-based process with clear criteria” and “consideration of candidates without geographic preference.” The Brazilian finance ministry sent a letter on August 2 to the IMF following the visit with Strauss-Kahn, which described the country's dissatisfaction with the IMF and expressed concern for the continued tradition of European dominance at the head of the IMF.
RESources
Follow the ins and outs of the IMF leadership selection process on the IFMleadership blog