UK government urged to open IMF selection process after Rato Europeans have opportunity to atone for rubber-stamping Zoellick as World Bank president

Press release|Bretton Woods Project|28 June 2007|url
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UK NGOs – including Oxfam, ActionAid, Christian Aid, the new economics foundation and the Bretton Woods Project – have called on the new UK government and its European partners to end the 63-year-old "gentlemen’s agreement" that allows European governments to appoint the Managing Director of the International Monetary Fund and the United States government to appoint the President of the World Bank.

Reacting to the announcement that IMF Managing Director Rodrigo de Rato plans to resign in October, Peter Chowla, policy and advocacy officer at the Bretton Woods Project said: “European countries are now being given a second chance to lead the reform of international financial institutions. They just missed a historic opportunity with the resignation of Paul Wolfowitz at the World Bank. But they can atone by ensuring that the next IMF managing director is selected through an open, transparent and inclusive process, where selection is based on merit not nationality, and where the views of all members have equal weight.”

Following the resignation of Paul Wolfowitz as World Bank president, just 17 days were allowed for nominations for a successor, and the US Director's nominee, Robert Zoellick, was the only candidate. Despite statements and written policy positions calling for an open selection process, every country in Europe acquiesced in the rubber-stamping of his appointment, in contravention of the guidelines endorsed by the Executive Boards of both institutions in 2001. 

Max Lawson, Policy Advisor at Oxfam GB, said “The United Kingdom government has already committed itself to a merit-based selection process in the DFID white paper. Now is the time for the new government to follow through on this commitment.”

De Rato has personally stated that the selection process for the next Managing Director of the IMF should be open and merit-based. This was also included in the IMF’s medium term strategy. A joint committee of IMF and World Bank Executive Directors made detailed recommendations for just such a procedure in 2001, in a report that was endorsed by both Executive Boards, but has never been acted on by either. And, with three months before de Rato's departure, there is plenty of time to establish and implement a selection process that might be seen as appropriate to such a senior appointment at the national level.

But the final decision will come back to the large shareholders in Europe working with the United States. Romilly Greenhill of ActionAid said: “We hope that European governments will have the strength to finally end the backroom deal with the US that has perpetuated the outdated carve-up of the leadership at the IMF and World Bank.”

The European Union, via the statement of the EU presidency (Germany) at the last IMFC meeting, said that they were open to discussing the selection procedure for the managing director. During the last selection process for the managing director in 2004 one non-European candidate was considered by the board, but it was widely acknowledged that he had no chance of being selected.

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Published: 28 June 2007 , last edited: 2 July 2007

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