The African Union (AU) Commission says that a non-European should be at the helm of affairs at the International Monetary Fund (IMF). According to them, tacit agreements governing the international lender only makes it possible for Europeans to hold the position of Managing Director at the IMF.
The proposal, revealed in a statement on Thursday June 9 in Addis Ababa, Ethiopia, is the first of its kind to be made by an African institution to head the IMF.
“The African Union believes that it is now time for a non-European, particularly an African, to be at the helm of the IMF, given that the position of IMF Managing Director has never been held by a non-European because of the tacit agreement that currently exists for a European to head the institution. Selecting a non-European and particularly someone from the developing world would go a long way in increasing voice and representation at the IMF for these countries,” said the commission.
In addition, according to the commission, selecting a non-European to head the financial institution would also better reflect the dynamic changes that characterise the present state of the global economy; with a gradual shift in global production and demand away from industrialised economies to developing regions such as Africa, Asia and Latin America.
“The departure of Mr. Dominique Strauss-Kahn as Managing Director of the International Monetary Fund (IMF) presents a prime opportunity for the IMF and the developed countries to deliver on their commitment to implement major reforms at the IMF, including those relating to governance. In particular, there is now need to end the ‘informal agreement’ that the head of the IMF should be a European,” added the AU commission.
A fair and equal opportunity
“In this regard, an opportunity has arisen to decisively take hold of the IMF governance reform agenda by selecting the next IMF Managing Director through an open, transparent and merit based selection process in accordance with recent discussions within the G20 in the wake of the recent global economic and financial crisis”.
The commission also indicated that the case for an African IMF Managing Director also arises from the fact that Africa is emerging as a new pole for global growth with huge potential ranging from increased gross domestic product (GDP), growth performance, macro-economic stability, a population size of 1 billion, consumer spending of more than USD 860 billion, and abundance of natural resources, among others.
The African Union has called for the international community to give candidates from developing countries, and particularly from Africa , a fair and equal opportunity in what concerns the selection procedure for the IMF chief position.
“Europe can no longer maintain an absolute right to the position of IMF Managing Director. Should the tradition be done away with, one possible compromise in the package of change would be for the No. 2 position to be given to a European. The time is now to deliver on the IMF governance reform agenda relating to ensuring an open, transparent and merit based selection its Head.”
Dominique Strauss-Kahn (DSK) resigned as Head of the International Monetary Fund (IMF) after he was arrested by the New York Police for an alleged sexual offence on a chamber maid in a New York hotel. Before his arrest, DSK was widely tipped to represent the Socialist party for the French presidency in 2012. Christine Lagarde, current French finance minister, is the presumptive nominee for the top IMF job.
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