IMF searches for relevance

WASHINGTON – As the International Monetary Fund set in motion its search for a new chief, analysts said the multilateral organisation is struggling for credibility and needs a fresh perspective.

On Tuesday, the European Union appeared to coalesce around France’s candidate, former finance minister Dominique Strauss-Kahn, to succeed the departing Rodrigo Rato. French President Nicolas Sarkozy picked the socialist, who failed to clinch his party’s nomination in the recent presidential elections that brought Sarkozy to power.Under an increasingly criticised gentleman’s agreement, Europe chooses the head of the IMF and the United States picks the president of the World Bank, the IMF’s sister institution.Some said the apparent European rush to fill the power gap left by Rato’s June 28 departure announcement, in an exercise of the handshake agreement, could undermine the IMF’s search for credibility.Criticised for its methods and effectiveness, rivalled by new private and regional financing bodies, scorned by some countries in Latin America and Asia, as well as by some anti-globalisation organisations, the IMF no longer is the paragon of financial power it was even 30 years ago.”The IMF was a major player in global finance and its role was clear.Now it is much less clear,” Danny Bradlow, the head of the international law program at American University in Washington, told AFP.”If the process goes forward as it looks like it might with (Strauss-Kahn) being sort-of imposed by the Europeans on the IMF, the willingness of other nations to participate actively in the IMF might be reduced,” he said.US Treasury Secretary Henry Paulson, meanwhile, said “the IMF is an important institution and it is important that the next leader continue on with the reform agenda.”Paulson told reporters he was “optimistic that the Europeans will ultimately come up with a consensus nominee …it is completely up to the Europeans to get that consensus.”Dennis De Tray, vice president of the Centre for Global Development, a Washington think tank, called the near-instant candidacy of Strauss-Kahn “a missed opportunity.”Britain did not entirely join the EU rally around Strauss-Kahn.Alistair Darling, London’s new finance minister, called him “a very credible candidate” but said the British government “wants to see what other candidates there may be put forward from other parts of the IMF.”Developing countries for years have protested in vain against the tradition of Europeans running the IMF and Americans leading the World Bank, and have called for open, merit-based competition for both posts.The IMF executive board has not announced when it will vote on the next managing director, but late Monday said it would move “expeditiously” to fill the post “in an open and transparent manner.”The board also said that under IMF rules any member of the board could offer a nomination for IMF managing director, “regardless of nationality.”Unlike the United States, which was the only country recently to propose a candidate for the World Bank presidency, Robert Zoellick, the 27-nation EU could have taken the opportunity of Rato’s resignation to launch an open and merit-based nomination process.”The key issue that faces the Europeans is whether or not as a group they’re going to step up to an issue that the United States decided not to address,” De Tray told AFP.Nampa-AFPFrench President Nicolas Sarkozy picked the socialist, who failed to clinch his party’s nomination in the recent presidential elections that brought Sarkozy to power.Under an increasingly criticised gentleman’s agreement, Europe chooses the head of the IMF and the United States picks the president of the World Bank, the IMF’s sister institution.Some said the apparent European rush to fill the power gap left by Rato’s June 28 departure announcement, in an exercise of the handshake agreement, could undermine the IMF’s search for credibility.Criticised for its methods and effectiveness, rivalled by new private and regional financing bodies, scorned by some countries in Latin America and Asia, as well as by some anti-globalisation organisations, the IMF no longer is the paragon of financial power it was even 30 years ago.”The IMF was a major player in global finance and its role was clear.Now it is much less clear,” Danny Bradlow, the head of the international law program at American University in Washington, told AFP.”If the process goes forward as it looks like it might with (Strauss-Kahn) being sort-of imposed by the Europeans on the IMF, the willingness of other nations to participate actively in the IMF might be reduced,” he said.US Treasury Secretary Henry Paulson, meanwhile, said “the IMF is an important institution and it is important that the next leader continue on with the reform agenda.”Paulson told reporters he was “optimistic that the Europeans will ultimately come up with a consensus nominee …it is completely up to the Europeans to get that consensus.”Dennis De Tray, vice president of the Centre for Global Development, a Washington think tank, called the near-instant candidacy of Strauss-Kahn “a missed opportunity.”Britain did not entirely join the EU rally around Strauss-Kahn.Alistair Darling, London’s new finance minister, called him “a very credible candidate” but said the British government “wants to see what other candidates there may be put forward from other parts of the IMF.”Developing countries for years have protested in vain against the tradition of Europeans running the IMF and Americans leading the World Bank, and have called for open, merit-based competition for both posts.The IMF executive board has not announced when it will vote on the next managing director, but late Monday said it would move “expeditiously” to fill the post “in an open and transparent manner.”The board also said that under IMF rules any member of the board could offer a nomination for IMF managing director, “regardless of nationality.”Unlike the United States, which was the only country recently to propose a candidate for the World Bank presidency, Robert Zoellick, the 27-nation EU could have taken the opportunity of Rato’s resignation to launch an open and merit-based nomination process.”The key issue that faces the Europeans is whether or not as a group they’re going to step up to an issue that the United States decided not to address,” De Tray told AFP.Nampa-AFP