Former French Finance Minister Dominique Strauss-Kahn and former Czech Prime Minister and central bank governor Josef Tosovsky are the two candidates proposed for the new director of the International Monetary Fund (IMF), the Fund announced on Friday, following the deadline for nominations.
The IMF Executive Board will interview the candidates in early September and then meet to select a successor to the current head of the Fund, Rodrigo de Rato, who will step down after the annual meetings of the IMF and the World Bank (WB) in October. Strauss-Kahn (58), French Finance Minister from 1997-99 and earlier this year a candidate for the Socialist Party’s nomination in the presidential elections, was proposed on July 10 as the EU candidate for the IMF chief.
Tosovsky (56), a former Czech Prime Minister who currently heads the Financial Stability Institute at the Bank for International Settlements (BIS) in Basel, was proposed on August 22 as Russia’s candidate. In accordance with the 60-year tradition of Western European countries proposing a candidate for the IMF chief and the US proposing a candidate for the World Bank chief, Strauss-Kahn is the favorite to succeed Rodrigo de Rato, although IMF officials have stated that they have no objections to Tosovsky’s candidacy and that they will conduct an open and transparent selection. In addition to EU support, Strauss-Kahn also enjoys strong backing from the United States.
Russia raised eyebrows when it nominated Tosovsky at the end of August, with Russian officials stating that this is a legitimate challenge to the tradition of Europe selecting the IMF chief and the US selecting the World Bank chief. “Not everyone agrees with this. It is not fair to the leading countries of the world,” said Russian Foreign Minister Alexei Kudrin in this regard. Former Russian Prime Minister Yegor Gaidar, in a recent comment in the Financial Times, referred to Western European hegemony over the IMF as a “relic of the colonial empires of Europe” and stated that Russia has the right to point out this power imbalance. Many experts, particularly in developing countries, blame this system for the hostility towards the IMF and call for reform of this international financial institution. The Financial Times recently assessed in its editorial that this effect is particularly harmful given that rising global foreign exchange reserves make the IMF’s resources appear dwarfed. Increasingly, “the only assets of the IMF are political legitimacy and intellectual authority,” the paper concluded.
