Pretoria – As countries nominate their respective leaders to possibly head the International Monetary Fund (IMF), there is support for the post to go to a leader from a developing nation.
This follows the resignation of Dominique Strauss-Kahn as the Managing Director of the IMF amidst sexual assault charges in the US last week.
Trevor Manuel, the former Finance Minister and now Planning Commission Minister, has been touted for the job which has traditionally gone to a European, seeing that Europe accounts for 35 percent of the IMF vote, followed by the United States.
“We support Minister Manuel as a candidate for heading the IMF. We believe that under his leadership, there will be renewed focus on the African Agenda. He would be strongly suited for reforming the IMF,” South African Chamber of Commerce and Industry (SACCI) CEO, Neren Rau, told BuaNews on Wednesday.
Rau said due to the recent economic meltdown, both the World Bank and the IMF have had to face issues of their relevance to the current environment.
South Africa has for years been calling on the organisation to include leaders from developing nations.
Finance Minister Pravin Gordhan and Australian Deputy Prime Minister and Treasurer, Wayne Swan, on Sunday said the new head of the IMF should be appointed through an open, transparent and merit based process.
Yesterday, the executive directors representing Brazil, Russia, India, China and South Africa in the IMF said the convention that the selection of the next Managing Director on the basis of nationality undermined the legitimacy of the fund.
“We are concerned with public statements made recently by high-level European officials to the effect that the position of Managing Director should continue to be occupied by a European,” said the executive directors.
“We believe that if the Fund is to have credibility and legitimacy, its Managing Director should be selected after broad consultation with the membership. It should result in the most competent person being appointed as Managing Director, regardless of his or her nationality. We also believe that adequate representation of emerging market and developing members in the Fund’s management is critical to its legitimacy and effectiveness,” said the leaders.
The directors are: Russia’s Aleksei Mozhin; India’s Arvind Virmani; China’s Jianxiong He; South Africa’s Moeketsi Majoro and Brazil’s Paulo Nogueira Batista Jr.
“If he’s successful it would be further testament to South Africa’s ability to wield an inordinately large influence in global affairs relative to the size of our economy,” explained Rau.
Nominations for the post opened on Monday, 23 May and will close on 10 June this year. The selection process is expected to be completed by the end of June.
South African Institute of International Affairs (SAIIA) senior research fellow, Peter Draper, said the possibility of Manuel heading the 187-member countries of the IMF was good but with little prospects.
“It is unlikely seeing that the vote is pretty split,” said Draper, of the result that other developing countries are nominating their own candidates.
At a press conference on Wednesday, the frontrunner for the post, France’s Finance Minister Christine Lagarde, announced her candidacy for the job. Among other countries who have been nominating their respective leaders for the post is Mexico, which on Monday nominated its central bank chief, Agustin Carstens, for the job.
Both Draper and Rau agreed that Manuel would be up against some stiff competition.
“Manuel is up against substantial competition from a number of parties who have stronger experience either within the World Bank or the IMF. The importance of emerging economies broadly lobbying for his candidacy would be a key determinant of his possible success,” said Rau.
Meanwhile, Business Unity SA (BUSA) has also thrown its weight behind BRICS’ view that that there is a strong case for the next Managing Director of the IMF to come from the emerging economies.
“The shift in the global balance of power means that the increasing role of developing countries in the world economy has to be acknowledged – and needs to be increasingly recognized in global financial institutions,” said BUSA on Wednesday.
“BUSA supports the candidature of current Planning Minister Trevor Manuel – should he decide to be available for the IMF post. He has established excellent credentials as a former South African Minister of Finance, as well as enjoying a high reputation in global financial circles. He is also known as a strong advocate of reform in the global financial architecture.
“BUSA believes that collectively BRICS should enlarge its sphere of influence over the final decision.” – BuaNews