U.S. News

IMF to Meet Monday on Process to Select New Chief


The IMF board will meet on Monday at the prompting of developing nations which want Europe and the United States to agree to throw open selection of a new managing director to candidates from around the globe, officials said on Friday.

The top International Monetary Fund job has always gone to a European since the global financial institution was created in 1945, under an informal deal where the United States appoints the head of its sister organization, the World Bank.

Europe has already staked its claim to nominate the successor to IMF Managing Director Rodrigo Rato, who resigned suddenly last week saying he would step down for personal reasons in October, ending his five-year term prematurely.

Germany has said a consensus was emerging in European capitals on a candidate to replace Rato, a former Spanish economy minister, but France said on Thursday there was no deal yet.

Pressure is mounting in the IMF from the Group of 11, which represents more than 110 emerging and developing countries from Africa, Asia, Latin America and the Middle East, for the next IMF head to be selected from a field of candidates based on merit, not nationality.

"This is not the time to be talking about candidates. We want to agree on a process of selection and we want that process to include candidates from other parts of the world, not only Europe," said one senior board official from a developing country.

"A meeting of the board has been called for Monday and we hope a process for selection can be agreed that will be open to anybody," the official said, adding there was at least one G-11
member which indicated it planned to put forward a candidate.

In 2004, Egyptian-born Mohamed El-Erian, a former senior IMF official, was nominated by Egypt's IMF executive director Shakour Shaalan, as a second candidate for the job. In the end it went to Rato.

Recognizing Emerging Powers

Developing nations argue that opening up the selection process was crucial as the IMF is undergoing reforms to make it more representative by recognizing the rising influence in the world economy of China and other emerging powers.

U.S. Treasury Secretary Henry Paulson said on Monday the United States would not stop Europe from naming the next IMF head. He told Reuters the U.S. was not in a position to challenge Europe as Washington recently nominated Robert Zoellick, a former U.S. deputy secretary of state, to head the World Bank without opening it up to any other candidates.

Zoellick succeeded Paul Wolfowitz, a U.S. architect of the Iraq war, who resigned following months of turmoil over his involvement in a high-paying promotion for his companion.

A European government official told Reuters on Thursday that three names were being considered for the IMF job.

These were former Polish central bank chief Leszek Balcerowicz, Frenchman Jean Lemierre -- who heads the European Bank for Reconstruction and Development -- and Italian central bank boss Mario Draghi. However, a Bank of Italy spokeswoman had said last week that Draghi was not interested in the job.

Other names are circulating in the media as possible candidates including former Swedish prime minister Goran Persson.