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S.Africa: nationality shouldn't matter in IMF race

S.Africa: nationality shouldn't matter in IMF race

May 22nd, 2011 by DONNA BRYSON, Associated Press in News

JOHANNESBURG (AP) - South Africa and Australia on Sunday insisted the best candidate should be appointed to lead the International Monetary Fund irrespective of nationality, calling for an end to the convention that the body will always be headed by a European.

The issue will be a major point in a debate over the future of an institution that has had great influence on the economies of the developing world and now is key to the future of some industrialized countries.

"For too long, the IMF's legitimacy has been undermined by a convention to appoint its senior management on the basis of their nationality," Australian treasurer Wayne Swan and South African finance minister Pravin Gordhan said in a joint statement Sunday. "In order to maintain trust, credibility and legitimacy in the eyes of its stakeholders, there must be an open and transparent selection process which results in the most competent person being appointed as managing director, regardless of their nationality."

Australia and South Africa together lead an IMF reform committee of the Group of 20 leading rich and developing countries.

Since Dominique Strauss-Kahn of France resigned last week to face charges in New York that he tried to rape a hotel maid, emerging economies have pressed for an end to Europe's traditional stranglehold on the position.

Strauss-Kahn's legal crisis has meant turmoil for the IMF at a crucial time. The fund provides billions in loans to stabilize the world economy and now is deeply involved in tackling the eurozone's debt crisis.

Support in Europe is growing for France's Christine Lagarde to replace Strauss-Kahn. But former South African finance minister Trevor Manuel also has been raised as a possibility.

In their statement, Swan, who also is Australia's deputy prime minister, and Gordhan said G-20 leaders have committed themselves to reforming international financial institutions, including the IMF and the World Bank.

The G-20 - which includes emerging economies such as China, Brazil and India - has become the lead group for tackling international economic issues, a shift from the dominance of the Group of Eight, seen as reflecting Western interests.

At a G-20 meeting in Pittsburgh in 2009, as the world was fitfully emerging from recession, leaders called for shifting voting shares in the IMF from developed powers to emerging ones by at least 5 percentage points. They called for a similar shift at the World Bank.

Developed industrialized nations currently wield about 57 percent of the voting rights in the IMF, compared with about 43 percent for developing nations.