IMF successor should be from outside US, Europe

December 2, 2010 12:00 am

, NEW DELHI, Dec 2 – The tradition that an American heads the World Bank and a European leads the International Monetary Fund should end as the global economy has been transformed, the head of IMF said Thursday.

Dominique Strauss-Kahn, speaking in New Delhi, said that both his successor at the IMF and the next head of the World Bank after Robert Zoellick should be from emerging or developing nations.

"The so-called agreement between the US and Europe whereby the IMF head was European and World Bank president was an American is over," said Strauss-Khan, a French man who took over the IMF role in 2007.

"So I think it would be just fair that the next leaders of the two institutions will come from somewhere else in the world," he told reporters after holding talks with Indian Finance Minister Pranab Mukherjee.

Since the sister organisations were founded in 1946 after the end of World War II, all 12 presidents of the World Bank have been US citizens and all 10 IMF managing directors have been from Europe.

But the shift in economic power to Asia — particularly Japan, China and increasingly India — has strengthened calls for the unwritten convention to be scrapped.

Speaking in the world\’s second-fastest growing economy after China, Strauss-Khan noted strong economic growth in Asia, South America and parts of Africa — in contrast to sluggish performance in Europe and the United States.

At the beginning of last month, the IMF executive board agreed to sweeping changes that will give China and other emerging-market economies a greater say in the financial institution.

But for the reforms to take effect, they will have to be approved by the fund\’s governors and go through what could be a long process to obtain legislative ratification.

Strauss-Kahn has been a vocal advocate of giving more weight to emerging nations through their financial contributions to the IMF — effectively making them shareholders — and their positions on the executive board.

Emerging-market and developing countries have fought a bitter battle to wrest greater power within the two institutions.

Among those tipped to be in the running for the next IMF chief is Indian bureaucrat Montek Singh Ahluwalia, who is currently deputy chairman of the Planning Commission, which formulates national economic policy.

The United States is the dominant funder of the IMF, with Japan the second largest shareholder and Germany, France and Britain also substantial contributors.

But China, whose stunning economic transformation over the past three decades and resilience during the 2008-09 global crisis has shifted financial power eastwards, has become a more high-profile player.


Latest Articles

Most Viewed