BRICS: European Dominance of IMF Top Post 'Obsolete'

    John Lipsky, the acting managing director of the International Monetary Fund, holds a meeting with senior staff and management. Photo by: Stephen Jaffe / IMF / CC BY-NC-ND

    Top emerging economies have added a united voice to calls for the selection of a new International Monetary Fund chief using an open and merit-based process, instead of on the basis of nationality.

    In a joint statement released May 24, the IMF directors of Brazil, Russia, India, China and South Africa said it was time for IMF to abandon “the obsolete unwritten convention that requires that the head of the IMF be necessarily from Europe.” They also criticized recent statements by European officials indicating that the region believes another European should lead the international institution.

    The convention of naming a managing director on the basis of nationality undermines the fund’s legitimacy, the directors said, adding that the position should be filled after a broad consultation with the entire IMF membership.

    IMF launched on May 20 the selection process for its new chief, with hopes of filling the position by June 30. More than 100 non-governmental organizations and campaign groups have recently released an open letter to IMF with a message similar to that of BRICS directors.

    >> IMF Hopes to Name New Managing Director by June 30

    >> More than 100 Groups Calls for Open, Merit-based IMF Chief Selection Process

    The IMF directors also emphasized that “adequate representation of emerging market and developing members in the Fund’s management is critical to its legitimacy and effectiveness.”

    “The recent financial crisis which erupted in developed countries, underscored the urgency of reforming international financial institutions so as to reflect the growing role of developing countries in the world economy,” they said, adding that the next IMF chief should be a person committed to “continuing the process of change and reform of the institution so as to adapt it to the new realities of the world economy.”

    The emerging economies’ call came as French Finance Minister Christine Lagarde was reporteldy preparing to announce her bid for the top IMF post after gaining the support of the United Kingdom and several European Union member states.

    An EU official said Lagarde does not face any significant opposition, The Wall Street Journal says, while noting that the race for the job is far from over. Augustin Carstens, the governor of Mexico’s central bank, announced his candidacy on Tuesday (May 24), and Kazakhstan and South Africa are expected to nominate their own candidates, the news agency notes.

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      Ivy Mungcal

      As former senior staff writer, Ivy Mungcal contributed to several Devex publications. Her focus is on breaking news, and in particular on global aid reform and trends in the United States, Europe, the Caribbean, and the Americas. Before joining Devex in 2009, Ivy produced specialized content for U.S. and U.K.-based business websites.