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'Settled' IMF succession angers activists

17 june 2011, 09:53
0
French Economy Minister Christine Lagarde, 55, candidate for the head of International Monetary Fund (IMF). ©AFP
French Economy Minister Christine Lagarde, 55, candidate for the head of International Monetary Fund (IMF). ©AFP
Critics assailed the most powerful members of the International Monetary Fund Wednesday for quietly agreeing on a new chief for the global crisis lender even before the nominations were closed last week, AFP reports.

With French Finance Minister Christine Lagarde widely expected to maintain Europe's 65-year-old grip on the managing director's slot, a range of academics, activist groups and some IMF officials said no challenger, including the other shortlisted candidate, Mexico's central bank head Agustin Carstens, ever had a chance.

"The name of the IMF managing director is not even decided by the board, it's not even decided in Washington. I think it's been decided in the salons of Paris," said Sarah Wynn-Williams, head of IMF relations at global poverty fighting group Oxfam.

The 24-member board of the powerful institution, which bails out debt-saddled economies but imposes often harsh and controversial conditions for its rescue aid, shortlisted Carstens and Lagarde Monday after a two-week nomination process which saw a half-dozen names floated about.

Officially, the board will interview the candidates next week and decide "by consensus" by the end of June.

It can also vote, but with longtime allies the United States, Europe and Japan holding a solid quota bloc of more than 54 percent, mounting a ballot challenge would be difficult and, to IMF board members, unseemly.

From the moment the former managing director, Frenchman Dominique Strauss-Kahn, vacated the job on May 18 to fight sexual assault charges in New York, Europe's concerted push for one of its own made Lagarde the front-runner.

Critics, including Carstens, have blasted the "gentleman's agreement" dating to the IMF's founding that a European would lead the Fund while the US could always hold the presidency of the World Bank.

They say that that pact prevents qualified emerging economy candidates from trying to win the job, and stifles real discussion of issues -- such as the direction of the IMF's huge bailouts of Greece, Ireland and Portugal.

"Based on the processes I have seen, and the way it has been carried out, I see little if any possibility of the result being any different from what it was in the last several decades," said Arvind Virmani, the IMF board's executive director representing India and other countries.

Following Strauss-Kahn's resignation, Virmani had called for a more transparent process, one that involved an open list of candidates and a vote.

"The point is legitimacy and credibility," he told AFP.

But ultimately, "there was no opportunity even to suggest our interest."

In 2007 after Strauss-Kahn was chosen, Jean-Claude Juncker, who chaired the Eurogroup of countries, predicted that would be the last time a European necessarily locked up the position.

But nothing has changed in the process that would allow a truly global competition, according to Colin Bradford, a Brooking Institution economist and specialist in global economic governance.

"My view of an open process would have rather been the nomination of ten or twelve candidates, and the Board retaining five or six that they wanted to see," he said.

Non-governmental organizations critical of the way the IMF is run and its impact on poor people have been the strongest critics.

Presciently, activists launched a website, IMFBoss.org, to monitor how the leadership is chosen on May 12, two days before Strauss-Kahn's arrest.

"Lagarde passed finish line before starting gun fired," Jesse Griffiths of the Bretton Woods Project -- which monitors IMF and World Bank activities -- wrote on the blog on Wednesday.

"This short-sighted stitch-up has a chilling effect on everyone else. Why would smaller states back a loser?"


By Hugues Honore

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