U.S. backs Strauss-Kahn to lead IMF
26 July 2007
The U.S. backing of Dominique Strauss-Kahn will likely confirm his nomination to head the IMF, continuing the "old boy's club" tradition.
U.S. Treasury Secretary, Hank Paulson, avoided a full declaration of support for Dominique Strauss-Kahn but called him a "strong candidate," an endorsement that will very likely lead to Strauss-Kahn's selection to be the next Manging Director of the International Monetary Fund.
In his statement, Paulson did not mention any U.S. commitment for a selection process based on merit, rather than on nationality -- an unwritten tradition that has continued despite calls for re-examination of the practice, whereby the Manging Director of the IMF is chosen by European governments and the President of the World Bank is nominated by the United States.
After the surprise announcement by former Managing Director Rodrigo de Rato that he would step down as head of the IMF in October, three years ahead of completing his full term, European Finance Ministers quickly nominated Strauss-Kahn, a French national, to replace him. France's president, Nicholas Sarkozy, took the unusual step in attending the meeting and promoting Strauss-Kahn -- once a rival political contender from France's Socialist Party -- for the nomination.
In recent weeks, the Group of 24 (G24) of developing countries have called on the IMF Board of Executive Directors to adhere to its own agreements in determining its selection on a merit-based, open and transparent process. But with France, Germany, Japan and now the U.S.'s backing for Strauss-Kahn, the decision has been all but confirmed.
Interestingly, it's not only the G24 that have protested against the IMF's selection process. European countries such as the United Kingdom, Norway, Spain, and Italy have all questioned the historical practice whereby the EU selects the leader of the IMF, and have indicated that they would support a candidate from a developing country if they were the best person for the job. They have questioned whether the time is not ripe for the IMF to implement its own governance standards and choose its next leader based on merit rather than nationality? The European Parliament's Committee of Economic and Monetary Affairs recalled "their resolution of March 2006 on the Strategic Review of the IMF, where they called for a consolidation of the Europeans at the international financial institutions and for an improved institutional governance at the IMF," wrote Nuria Molina on IFIwatchnet.org.
"On this occasion, the Committee calls once again for enhancing internal IMF governance by setting up a transparent and democratic selection process of the next IMF chief," Molina continues.
The only thing that could potentially stop Strauss-Kahn's confirmation? An all out revolt from European governments. But the likelihood of that is almost nil.
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