Thursday, November 12, 2015

IMF Chief Term Nears End - What Will the BRICS Do?

In July 2016 the term for current IMF Chief Christine Lagarde will end. It's an open question right now if she will try for another term. The BRICS nations have issued statement after statement about how frustrated and disappointed they are that the IMF voting power has not been changed. But they never actually do anything about that and it does not look like they plan to challenge Ms. Lagarde if she does run for another term. Below are a couple of recent articles on this topic. 

------------------------------------------------------------------------------------------------ - IMF chief term nears end with BRICS divided on  power bid

 "As International Monetary Fund chief Christine Lagarde's mandate enters the final stretch, emerging-market powers seem hesitant about teaming up to try to wrest the job away from Europeans.
The IMF managing director has said she is "open" to seeking another term when her time is up in July 2016, while the so-called BRICS -- Brazil, Russia, India, China and South Africa -- seem divided about a power bid.
Questioned by AFP, Moscow and Brasilia refused to comment. But Pretoria seems to be already gearing up to contest the European leadership of the 70-year-old IMF, part of the tacit agreement with the United States that has kept an American as head of sibling institution the World Bank.
"Developing countries have insisted on a merit-based selection process, not the current arrangement where the Fund managing director is always a European," said a spokeswoman for South Africa's treasury department.
Though the complaint is not new, it has failed so far to produce change."
"According to Shi Yinhong, a professor at Renmin University of China, the battle seems to have a foregone conclusion because of the composition of the IMF executive board, which names the managing director and which remains dominated by Europeans and Americans. 
"Given Western countries' funding, their share of voting rights and their ability in and experience of managing international financial organizations, I believe the managing director candidate will still come from a developed country," he said. 

Two factors, however, could change the situation, according to Prasad: If the IMF decides to not include the Chinese currency, the yuan or renminbi, in its elite currencies basket and if the IMF governance reform remains blocked in the coming months."

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