'IMF MD selection process unfair'

Questioning the US-European dominance in occupying top posts at the International Monetary Fund and the World Bank, a coalition of developing countries has demanded that IMF should be more inclusive and open to diversity in choosing its next managing director.

Fearing that nationality, rather than merit, will again determine the selection of the managing director, the coalition called 'IMF Democracy' said in a statement that reforms are needed in the selection process of the IMF managing director.

IMF Democracy comprises G-24 (Developing Countries) Secretariat, the Financial Policy Forum and New Rules for Global Finance.

The post of IMF managing director fell vacant after Horst Kohler resigned following his candidature for the President of Germany. As per convention, the presidency of the World Bank goes to an American, while the post of IMF managing director is filled by a European.

Ariel Buira, director of the G-24 Secretariat, said: "Since its inception in 1945, all eight managing directors have been European. The IMF risks being labelled a modern-day European colony if Europe continues to monopolise the managing director's post.

"The hijacking of the selection process reveals a regional bias that undermines the integrity of an institution that advocates transparency, accountability, and open markets across the globe. It is time that the IMF practises what it preaches."

The IMF Democracy coalition has identified several qualified candidates from developing countries and recommended that they receive serious consideration for the position of the managing director.

"It is a cruel irony that the people most affected by the IMF and its policies have no voice in the selection of its CEO," Buira noted.

With nine Executive Directors on the IMF Executive Board, representing almost 30 per cent of total voting power, Europe today is over-represented, while developing countries and transition economies that account for 85 per cent of the world population and have a gross domestic product more than double that of the European Union have only 38 per cent of the total votes.

Buira said it is unjustifiable that Denmark, for example, can have greater voting power than Korea. The fact that Belgium has 52 per cent more voting power than Brazil and 74 per cent more than Mexico, which are among the world's largest economies, defies fundamental principles of fairness, he said.