Open statement: International NGOs call for IMF selection process to start over

Open statement on the IMF selection process
24 June 2011

In the wake of the Dominique Strauss-Kahn scandal, the IMF board set out a procedure for selecting a new head of the IMF, attempting to meet commitments for an open, transparent, and merit-based selection process. Even before the board’s action, a broad swathe of civil society organisations from around the globe had already articulated clear standards and procedures for how an IMF managing director should be selected.

The board’s procedure fell short of both their own previous agreements and the calls from civil society groups. This weaker process was then subverted by European real-politik which saw the continent’s governments clinging to an outmoded system of global economic governance which accords them undue privileges.

The imminent selection of Christine Lagarde to lead the IMF has laid bare the hypocrisy of a selection process which was neither truly fair and open, nor merit-based, especially given the existing imbalance in voting shares at the IMF. The rushed de facto appointment of Lagarde by European powers contradicts commitments by the G20, the IMF board and European finance ministers over the past years. Under Lagarde, the IMF is likely to further lose legitimacy, and be relegated to being the junior partner in the European Central Bank’s destructive bailouts of private creditors and punishment of ordinary eurozone citizens.

This does not have to be. There is still a chance to rescue this process and possibly the IMF’s legitimacy. The IMF board needs to start over, revamp the process and take a more professional approach that leads to a field of candidates committed to reforming the IMF and its approach to both rich countries and developing ones. In the meantime, it is imperative that the US publicly declare that it no longer expects tradition to hold, and that the filling of the posts of IMF first deputy managing director and president of the World Bank should be decided on merit and without regard to nationality. It is time the governance of our international financial institutions moves into the 21^st century.

Sincerely,