Wednesday, May 18, 2011

Can't the new IMF chief be Montek from India?

After the International Monetary Fund (IMF) chief Dominique Strauss-Kahn was arrested in New York this week, on charges of sexual assault on a maid in Manhattan, the important question that governments want an answer for is, who will be the next IMF Chief?

This has been a question looming in the global financial circles for long because Strauss-Kahn was anyway expected to leave IMF and contest for the post of President of France. Of course, from his cell in the notorious prison on Rikers Island - which itself is a giant leap backwards from the $3,000-a-night hotel suite he stayed in, two days earlier – the French presidency may seem to him, now, like a remote and distant dream, if not a completely shattered one.

For me and for many others, however, the question was whether the new IMF chief would be from the rising economies like India or China, or whether it would continue to be from one of the European countries. Because, Europeans have held all 10 managing director positions since the fund was created in 1945, and four of them have been Frenchmen. So, isn’t it time that one of the rising powers like say, India or China is given a chance?

I was thinking that India’s Montek Singh Ahluwalia would be a good choice. Apart from being a Rhodes Scholar from Oxford, his long stint in India’s Planning Commission, in India’s Finance Ministry, and in the Washington-based financial advisory body, the Group of Thirty, have given him the knowledge, experience and skill, I am sure, that an IMF chief’s post deserves.

But I was surprised to hear Ahluwalia’s announcement that he is not in the fray for the post. I suspect he said it because he knows Europeans will never allow that in the current economic scenario. With the austerity measures and financial cuts by governments of many countries across Europe, they would want the post themselves.

At least, I hope that, in future, the EU and other countries will try to encourage the emerging economies to play a more significant role in the management of the International Monetary Fund.

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