25th May, 2011
The old order has to change. The argument by European leaders that Christine Lagarde, the French finance minister must replace disgraced countryman, Dominique Strauss-Kahn, as the head of the International Monetary Fund, IMF, because she is from Europe is wrong and leaves much to be desired.
Dominique Strauss-Kahn resigned from the helm of the IMF last week to fight charges that he sexually assaulted a maid of West African descent in a New York hotel.
Yesterday, the IMF’s executive directors representing Brazil, Russia, India, China and South Africa — the emerging economies commonly known as the BRICS — issued a firmly worded statement condemning the custom of appointing Europeans to lead the fund.
A transparent, merit-based and competitive process for the selection “requires abandoning the obsolete unwritten convention that requires that the head of the IMF be necessarily from Europe,†they said in the statement. We believe they are right.
The unholy and unwritten convention that Europeans must always head the IMF dates back to the founding of the agency at the end of the Second World War 65 years ago. It has become obsolete and must be discarded.
The unanimous European position that they must always lead contradicts comments made by Jean-Claude Junker, president of the Euro group when Mr. Strauss-Kahn was selected in 2007, that the next IMF leader would not be a European.
We believe that technical background and merit, rather than nationality, should be the main factors determining the choice of future managing directors at the IMF.
We also believe that the gradual shift in economic and demographic influence to rapidly developing countries should be reflected in increasing representation for them in international institutions.
Adequate representation of emerging market and developing countries in the fund’s management is critical to its legitimacy and effectiveness.
Europeans and Americans always preach the principles of democracy, justice and fairness to the world.
They always argue that the world is a better place when people, no matter their origin, colour or physical attributes, are treated equally, or at least fairly.
But that does not apply to the IMF’s job and other juicy positions in international organisations such as the World Bank.
It does not bother them that they have been leading the IMF for 65 years and must allow others to also lead the world agency.
European leaders also argue that the economy of Europe is in a mess with Greece, Portugal and others being bailed out and as such deserve to retain the IFM ‘s job.
But, this argument is not tenable as the collapse of many European countries may simply mean that Europeans do not know how to take sound and critical economic decisions and must rather allow emerging economies to lead the agency.
We call on emerging economies to come up with a consensus candidate that can face Lagarde and defeat her. The dictatorship from Europe must stop. 65 years is enough.