Wednesday, July 29, 2015

News Note (Reuters): Next IMF Boss to Come from Outside Europe?

IMF Deputy Director David Lipton suggested in an interview on last Saturday that the next head of the IMF might come from outside Europe. This Reuters article quotes him as saying, "with candidates coming from around the world, I think it's much more likely the next time around than it has ever been."  Below are a few quotes from the article and then an added comment.


The next managing director of the International Monetary Fund is likely to come from outside Europe when current leader Christine Lagarde eventually leaves, the deputy head of the Washington-based fund said in an interview broadcast on Saturday.
IMF First Deputy Managing Director David Lipton told the BBC World Service the tradition by which a European heads the fund while an American leads the World Bank was coming under pressure and the next appointment would be "strictly merit-based".
Described on the same radio program as an "incredible anachronism" by former IMF Chief Economist Kenneth Rogoff, the convention that has ensured that Europeans lead the fund has been increasingly challenged during the euro zone crisis.
Lipton said that when Lagarde steps down, her successor would probably come from a non-European country.

"With candidates coming forward from around the world, I think it's much more likely the next time around than it has ever been," he said.
My added comment: 
You have to wonder what China and the other BRICS nations think when they hear things like this from the IMF. It seems like more influence outside the western powers is always some kind of distant "some day in the future" kind of thing. In this case, after quoting IMF Deputy Director as saying it's much more likely this time around, the article makes this observation:
"Lagarde, a former French finance minister, took over as head of the IMF in 2011 after her predecessor, Dominique Strauss-Kahn was forced to resign over a sex scandal.
Her five-year term comes to an end next year but she was quoted last month as saying she would consider a second term if she had the support of the IMF's members."
If you are China, does this sound like someone saying, hang in there and maybe six years from now someone outside Europe will get to the head the IMF? I guess since China has shown it will wait six years or more for IMF governance reforms, this makes perfect sense.

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