Opinion

A brave new IMF

(China Daily)
Updated: 2011-05-26 11:25

The IMF is searching for a replacement for Dominique Strauss-Kahn, who resigned after being charged with sexual assault in New York.

The new head will not only have to restore the agency's reputation and morale but also oversee the IMF's transformation into a competent international financial institution that is relevant to the world today.

Following a decades-old practice, which automatically dictates a European person heads the Fund, Europe is uniting behind Christine Lagarde, the French finance minister.

But if the IMF is to swiftly adapt itself to the new realities of the global economy, it is time to abandon the unwritten convention that its head has to come from Europe.

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The joint statement made by the IMF executive directors for Brazil, Russia, India, China and South Africa for a truly transparent, merit-based and competitive process for the selection of a new IMF chief is a much-needed example of coordination among these leading emerging economies.

To properly reflect the growing role of developing countries, which are still under-represented in this and many other major international institutions, the BRICS countries should be more confident in asserting their common position, even if that may annoy others.

It is understandable that some European countries might feel surprised, if not offended, by BRICS objection to selecting the IMF managing director on the basis of nationality.

Yet, to perceive the statement by the BRICS countries merely as a challenge to Europe will not help the IMF select the most competent person as its new head, regardless of his or her nationality, nor will it enable the international community to press ahead with reforms.

As the BRICS countries correctly pointed out, adequate representation of emerging markets and developing members in the Fund's management is critical to its legitimacy and effectiveness.

The IMF's declining reputation as a reliable firefighter against financial and economic crises indicates that the agency has so far failed to recognize the accelerating shift in the global economy from West to East, as evinced by the glacial pace it has taken to adjust its quota and votes among all members.

The selection of its new head is an opportunity to start a new chapter for the IMF. For the benefit of both developed and developing economies, all members of the Fund should give their vote for a brave new IMF led by a reformer who will not allow himself or herself to stand in the way of historic changes.