Opinion

Chance to reform IMF

(China Daily)
Updated: 2011-05-19 07:56

The arrest of Dominique Strauss-Kahn on May 14 in New York, for an alleged sexual assault, has surely dealt a huge blow to the International Monetary Fund's credibility, which is as fragile as the ongoing global recovery.

To avoid further damaging the IMF, at a time when it is badly needed to deal with both lasting and looming financial crises around the world, a change of personnel at the top of the fund seems inevitable.

While the case of Strauss-Kahn is likely to stay in the limelight, intensified jockeying for his job, one of the most powerful positions in global finance, has already begun and is grabbing more and more media attention.

Related readings:  IMF head Strauss-Kahn accused of 2002 sex assault  IMF chief's arrest may speed up succession battle  France urges prudence over sex probe on IMF chief

Some European officials have begun their lobbying for another European to head the fund, as has been the case since the IMF was founded. But other countries argue that an official from a faster-growing non-Western country should be given the chance to reflect their growing voice.

The BBC and Associated Press even suggested Zhu Min, a special adviser to the IMF head and former Chinese central bank's deputy governor, might be a successor to Strauss-Kahn, though China has not put forward a candidate of its own.

We agree that it is time to start a more open process to select the next IMF chief based on his or her merits, especially given that Strauss-Kahn was already expected to leave within a couple of months even before his arrest. But a divisive choice of successor is the last thing that the IMF needs.

It is no exaggeration to call the current situation a "disaster" for the fund, which has barely secured its legitimacy as a leading global monitor of and firefighter against financial crises.

Admittedly, the IMF has joined international efforts under the framework of G20 to engineer a global recovery from the 2008-2009 financial and economic crisis.

Nevertheless, it is more than obvious that the agency has moved too slowly to adapt itself to the new world economic landscape.

Compared with the glacial pace that the fund has traditionally taken to tinker with its decades-old vote and governance systems, changes that it has expedited in recent years may be deemed "remarkable" by some people. Yet, that is still a far cry from an adequate response to the new financial and economic challenges that the world faces today.

For instance, under-representation of emerging market economies will only prevent the IMF from mobilizing enough financial resources to boost its role as a leading financial firefighter in a world of increasing uncertainties. And a business-as-usual mentality will certainly not help address such institutional problems.

However, if the selection of the next IMF chief can be made a vote of confidence for a reformer who can effectively bring the agency into the 21st century, it would be an unexpected silver lining to the shameful cloud over its head.

Hence, we think that the most important merit of the candidates should be his or her willpower and leadership to steer the IMF through its crisis with bold and necessary reforms.

(China Daily 05/19/2011 page8)