[stop-imf] IMF: latest on race to be Managing Director

[Robert Weissman]

From: Soren Ambrose, 50 Years Is Enough Network:

For awhile there, Rodrigo Rato, the early favorite to succeed Horst
Koehler as head of the IMF, appeared to have lost his traction,
particularly when developing country representatives at the IMF (along
with Russia, Australia, and Switzerland) put out a statement calling for
an open process not limited, as in the past, to Western Europeans.  The
Egyptian representative subsequently nominated 3 candidates on his own
-- Andrew Crockett, a British citizen who used to head the Bank for
International Settlements; Stanley Fischer, a naturalized US citizen
(born in Northern Rhodesia, later Zambia); and Mohamed El-Erian, who
holds both Egyptian and French citizenship. The article below explains
that the IMF will go through the motions of interviewing all those
candidates, but that it looks increasingly likely that Rato will be the
one.  A crucial step in pushing Rato forward was the explicit
endorsement of his candidacy by the countries of Latin America.  That
gave him the cover of support from a big block of developing countries,
and probably helped defuse, to some extent, the move for a more open and
transparent process. It has been our contention that whoever is selected
will end up fulfilling the same role as Koehler, Camdessus, and those
before them: guiding a too-powerful, unaccountable, rigid institution in
imposing irresponsible and destructive economic policies on a great
number of the world's people.  We were, however, interested in seeing if
the exposure of the IMF's fundamental lack of democracy and transparency
during this process might speed some modest reforms, or, more
importantly, further de-legitimize the institution.  This article for
the Guardian suggests the former will happen; on the latter score
there's still time, with the spring meetings of the institutions coming
up in two weeks. It is interesting to speculate on what the Latin
American governments, particularly those of Brazil, Venezuela, and
Argentina, which have been moving toward a concerted effort to tame the
IMF's worst abuses of power, were thinking in endorsing Rato.  Do they
just want someone who speaks Spanish? It's hard to imagine that Rato,
who was finance minister under Spain's recently departed conservative
premier, Jose Maria Aznar, will be a great friend to the Global South.
Or do they believe that if they are seen as kingmakers -- in the sense
of offering key support to Rato's bid to be taken seriously as a
candidate -- they will have greater and lasting influence over the IMF's
policies and attitudes?  If the latter, I hope they get something in
writing. Soren Ambrose - 50 Years Is Enough Network - Washington, DC
USA

Brown backs <?xml:namespace prefix =3D st1 ns =3D
"urn:schemas-microsoft-com:office:smarttags" />Spain's former finance
minister to lead the IMF

Larry Elliott and Charlotte Denny

Thursday April 8, 2004

The Guardian

Spain's Rodrigo Rato was emerging as the front runner to be the new
International Monetary Fund managing director last night in a compromise
package being brokered by Gordon Brown to overcome opposition
to Europe's stranglehold on the global institution.

Germany and France are fighting a rearguard action in favour of their
candidate, Jean Lemierre, president of the European Bank for
Reconstruction and Development.

However, sources in Washington said that the outlines of a three-part
deal to end weeks of horse-trading over the Fund succession were
emerging.

Mr Brown believes that the former Spanish finance minister will be an
acceptable candidate to the developing world which is enraged
at Europe's assumption that it controls the leadership of the Fund.

Mr Rato has strong support from Latin American countries as result
of Spain's strong links with the region, and he is seen by Fund insiders
as the man to give the institution some much needed political direction.

IMF insiders believe that after ruling himself out for the job, Mr Brown
is emerging as the kingmaker in the process of choosing a new managing
director. The chancellor chairs the IMF's most important decision making
body, the international monetary and financial committee, and is the
main link between the European Union and developing countries.

"Brown is in a really strong position," said one source close to the
Group of Seven industrialised countries. "He wants a decision sooner
rather than later."

To fend off objections that Mr Rato is still a European stitch up, the
Fund board will interview all the candidates put forward by the
institution's 184 members.

So far three candidates have been formally nominated by Egypt's
executive director, who represents 13 Arab nations on the board: the
former Bank for International Settlements chief Andrew Crockett, former
IMF official Mohamed El-Erian and former IMF deputy managing director,
Stanley Fischer.

The final part of the deal will be an agreement that the next head will
be selected under a new open and transparent process, first suggested
three years ago following a bitter transatlantic battle over the
appointment of the departed IMF head, Horst K=F6hler. In the wake of Mr
K=F6hler's appointment, a joint World Bank and IMF working paper proposed
radical change to avoid a replay but this was never formally adopted by
the board.

Britain and a number of smaller European countries believe that powerful
developing countries would oppose a Franco-German backed candidate as
business as usual at the Fund. In return for supporting Mr Lemierre, the
Germans would like France's backing for a German to win the most
powerful economics post in the new EU commission which takes over later
this year.

Mr Rato's bid also faces opposition. Some of the smaller European
countries, particularly Sweden, think he will be too soft on Argentina,
one of the Fund's main debtors.