New IMF chief attacks nomination process

PARIS – New IMF chief Dominique Strauss-Kahn yesterday attacked the system for deciding the top jobs at the International Monetary Fund and World Bank.

Under a longstanding agreement, the United States names the head of the World Bank and Europe places its candidate at the top of the IMF – a carve-up that has irked other members of the multilateral institutions. “The tacit agreement between the Americans, who reserve themselves the management of the World Bank, and the Europeans, who place one of their own at the head of the IMF, has no reason to exist anymore,” he told French newspaper Le Monde.”A candidate from any one of the 185 members states must be able to direct the Fund if he has the competency.”Strauss-Kahn, known in France by his initials DSK, was to outline his plans to reform the IMF at a press conference here at 1400 GMT after meeting French President Nicolas Sarkozy earlier in the day.Although he criticised the jobs carve-up between the EU and US, he is seen as having benefited from the system and he was the subject of attacks from some commentators.Sarkozy hailed his nomination on Friday as “a great victory for French diplomacy.”The IMF, created in 1944, is seeking to redefine its role in a globalising world reshaped by the rising economic clout of developing countries like China, India and Brazil.Strauss-Kahn, 58, has pledged to be implement immediate reforms of the institution, which bails out countries in crisis but faces its own crisis of relevancy and legitimacy in a world flush with cash and access to capital.The new managing director, a former Socialist French finance minister, is in favour of overhauling voting practices in the institution to increase the influence of emerging countries.He has proposed that a handful of crucial decisions be taken with double majority voting to ensure they command unquestionable support from all members.Under the current system, decisions are approved with a simple majority of votes, but this favours rich countries because of a quota system that awards votes based on the amount of money contributed to the IMF.Double majority voting would mean one round of voting using the quota system and one in which every country was equal and cast only one vote.Nampa-Reuters”The tacit agreement between the Americans, who reserve themselves the management of the World Bank, and the Europeans, who place one of their own at the head of the IMF, has no reason to exist anymore,” he told French newspaper Le Monde.”A candidate from any one of the 185 members states must be able to direct the Fund if he has the competency.”Strauss-Kahn, known in France by his initials DSK, was to outline his plans to reform the IMF at a press conference here at 1400 GMT after meeting French President Nicolas Sarkozy earlier in the day.Although he criticised the jobs carve-up between the EU and US, he is seen as having benefited from the system and he was the subject of attacks from some commentators.Sarkozy hailed his nomination on Friday as “a great victory for French diplomacy.”The IMF, created in 1944, is seeking to redefine its role in a globalising world reshaped by the rising economic clout of developing countries like China, India and Brazil.Strauss-Kahn, 58, has pledged to be implement immediate reforms of the institution, which bails out countries in crisis but faces its own crisis of relevancy and legitimacy in a world flush with cash and access to capital.The new managing director, a former Socialist French finance minister, is in favour of overhauling voting practices in the institution to increase the influence of emerging countries.He has proposed that a handful of crucial decisions be taken with double majority voting to ensure they command unquestionable support from all members.Under the current system, decisions are approved with a simple majority of votes, but this favours rich countries because of a quota system that awards votes based on the amount of money contributed to the IMF.Double majority voting would mean one round of voting using the quota system and one in which every country was equal and cast only one vote.Nampa-Reuters