Emerging economies now eye top IMF job

Emerging economies now eye top IMF job

"This event is likely to put into play the leadership and governance structure of the IMF in a dramatic and unanticipated manner,m"  Time magazine said citing Eswar Prasad, a Brookings Institution senior fellow and former IMF official.

As "developing nations like Brazil, India and China build more macroeconomic muscle, they believe the Fund's leadership and philosophies are still too dominated by its US and European founders," it said.

The development is likely to fuel calls from "the developing world to drop the tradition whereby a European runs the IMF while an American runs its partner agency, the World Bank," the magazine said.

Brazil and kindred emerging powers like India are "committed to rendering decision-making processes in international bodies more representative, more democratic, more in tune with today's realities," it said citing an unnamed high-ranking Brazilian diplomat.
Keeping the IMF and World Bank the economic equivalents of NATO, the diplomat said, just perpetuates "the asymmetries of the past."

The IMF was in fact moving toward a more "merit-based" management approach, "but Strauss-Kahn's almost certain departure, and its ignominious circumstances, are just as certain to accelerate the push for a non-European to replace him," Time said.
If that happens, his successor is more likely to be from Asia than from Latin America, it said.

Meanwhile, the Washington Post noted that testing their new clout in the world economy, developing nations have began pressing to strip Europe of its traditional hold on the top job at the IMF, using the arrest of Strauss-Kahn to argue that his successor be chosen by merit and not geography.

The calls from three large, fast-growing and influential emerging economies, China, Brazil and Turkey to end the World War II-era "gentleman's agreement" that guaranteed Europe the managing director's post may set the tone for a potentially divisive battle over the IMF's executive suite, it said.