September 26, 2020

At I.M.F., Maneuvering to Replace Jailed Chief

While Mr. Strauss-Kahn has not yet resigned from his position after being sent on Monday to New York’s notorious Rikers Island jail on accusations of attempted rape, European officials intensified their lobbying for another European to head the fund, citing deepening uncertainties over the continent’s debt crisis.

Since it was formed after World War II, the I.M.F. has traditionally been run by a European, while the World Bank has long been headed by an American. But for the first time, there is a genuine possibility that the I.M.F. position could go to an official from a faster-growing non-Western country, reflecting the shifting global economy.

Policymakers from emerging markets say the time has come for them to exert more influence at the agency as their weight in the world economy has reached critical mass.

Among some potential candidates, modesty was not a characteristic widely on display.

Turkey’s finance minister, Mehmet Simsek, publicly threw his hat into the ring Tuesday, declaring: “I don’t have even the tiniest shortage in terms of experience or knowledge.” Another Turkish official, Kemal Dervis, a widely respected former economy minister, is already seen as a leading candidate for the post.

Finance officials from India, Mexico and South Africa are also being floated.

China, the third largest financial contributor to the I.M.F. after the United States and Japan, has not put forward a candidate of its own. But a ministry spokesman in Beijing said Tuesday that the selection of the next I.M.F. chief needed to be transparent and merit-based.

Experts said the race is wide open.

“Given the severity of the European sovereign debt crisis, there is a case for someone who can bring a good feel for European finance and politics to the job,” said Charles Dallara, a former U.S. Treasury official who is the managing director of the Washington-based Institute for International Finance. “On the other hand, this could be the time for a more open process at the I.M.F. looking at candidates from any number of emerging markets.”

The jockying intensified as questions rose over whether Mr. Strauss-Kahn would formally resign from the I.M.F., where staff members are stupefied by his arrest and worried about the impact on the fund’s credibility. On Tuesday, Austria’s finance minister, Maria Fekter, said Mr. Strauss-Kahn should consider stepping down to avoid further damaging the I.M.F.

Even if Mr. Strauss-Kahn were eventually released on bail, he would almost certainly not be able to leave the state of New York. That would make it impossible for him to fulfull his international obligations as well as requirements that he chair meetings of the I.M.F. executive board in Washington three times a week.

“You can’t run things from Rikers Island,” said one I.M.F. official, who spoke anonymously, citing the sensitivity of the situation.

Senior European officials, led by German Chancellor Angela Merkel, are arguing that only another European can manage the fractured politics and tricky calculus of Europe’s bailouts, especially if a renewed crisis in Greece richochets to other troubled countries. The I.M.F. is overseeing about 100 billion in loans it made to Greece, Ireland and Portugal, and is the principal architect of austerity programs aimed at straightened out the countries’ finances.

As it became clear that legal proceedings would keep Mr. Strauss-Kahn in New York for the foreseeable future, Gordon Brown, Britain’s former prime minister and also chancellor of the exchequer in the Labour government for many years, lost no time renewing his bid, which seemed to have deflated after Prime Minister David Cameron last month threatened to block it.

“Gordon is as keen as ever to put himself forward,” said a former aide, who was not authorized to speak publicly on the matter. “He’s moving up a gear and wants to be considered.”

Katrin Bennhold contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=23eed8559e250916bbe9069bd4557344

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