GO
Loading...

Why Was Stanley Fischer Excluded From IMF Race?

Stanley Fischer's candidacy for managing director of the International Monetary Fund was dismissed on grounds of age Monday, as the 67 year old is two years above the threshold of 65 demanded for the job.

The International Monetary Fund (IMF) headquarters building is seen in Washington, DC.
Yuri Gripas | Getty Images
The International Monetary Fund (IMF) headquarters building is seen in Washington, DC.

In a statement Monday evening, the IMF board said it would interview Mexican central banker Agustín Carstens and French finance minister Christine Lagarde for the role, but did not mention Fischer, currently governor of Israel’s central bank.

The strict enforcement of the age guidelines comes despite several influential IMF members having laws preventing discrimination on the grounds of age in the workplace.

In the US, the UK, Australia and Canada, it is illegal to fire someone based on their age, in most sectors.

The current Pope, Benedict XVI, was 78 when he was elected in 2005. Several US Presidents,. including Ronald Reagan, who took office when he was 70, have been elected when they were older than 65.

The former deputy managing director of the World Bank, who put himself forward on Saturday, certainly has the economics credentials to lead the IMF, some observers have said.

The job is up for grabs after previous incumbent, Dominique Strauss-Kahn, was accused of sexual assault. He has denied the allegations.

Backing for Lagarde

A number of European countries have already declared their backing for Christine Lagarde, currently France’s Finance Minister, in an effort to ensure a European holds the job yet again.

Some observers believed Fischer's Israeli background– although he was born in Zambia and has been a US citizen for most of his life – might have caused certain countries to oppose his candidacy.

One pregnable point in Lagarde’s formidable armour is that her background is in law rather than economics, according to some analysts.

Carstens has stressed his credentials both as an economist and as a voice for the developing world.

European Union countries control 32 percent of the votes for the IMF top job, while the US holds 17.7 percent and the Middle East and North Africa have 7.5 percent. The hefty proportion of votes controlled by the US and Europe led the BRICS' representatives to the fund to make a rare joint statement deploring the domination of Europeans at the top of the IMF.

Middle East

“Despite the likelihood that his experience and understanding of the region would greatly benefit the Mid East region, it could definitely be an issue with some Arab countries for a number of reasons,” Professor Rory Miller, Director of Middle East & Mediterranean Studies at King's College London, told CNBC.com.

"First, Turkey has shown interest in its own candidate at a time when Turkish-Arab relations are strong and Israeli-Turkish relations are poor. So there may be dissatisfaction that a regional non-Arab candidate comes from Israel not Turkey," he said, referring to the former Turkish finance minister Kemal Dervis, who has ruled himself out of the running.

During Fischer’s tenure at Israel’s central bank, he has been praised for his handling of Israeli-Palestine relationships, and has won the support of at least one political figure in the region.

The Palestinian Prime Minister Salam Fayyad, himself a former IMF official, told the Associated Press on Sunday that Fischer would make a "great managing director" for the world financial body and is a "superb human being".

There was a danger that conspiracy theorists would view Fischer’s appointment negatively, experts believe.

“Anti-Semitic conspiracy theorists will carry on regardless of Fischer's IMF candidacy, but no doubt it will give them one more thing to obsess over,” Miller said.

"It would key into all sorts of unpleasant ways of thinking, some elements of which are apparently respectable, others clearly less so," David Hirsh, Lecturer in Sociology at Goldsmiths College, University of London, told CNBC.com.

"It is common to see Israel as the keystone of a global system of imperialism or Western power; the IMF is symbolic, for some, of the same system of domination; the Israel lobby is thought to be powerful enough to get its man elected; some will connect those stereotypes with the fact that the previous guy, Strauss-Kahn, was Jewish,” Hirsh added.

Featured

Contact Europe News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More

Europe Video