27/05/2011: Head of IMF: Yes, why not an emerging market candidate?

The doors of Rikers Island jail facility in New York City were barely closed behind Dominique Strauss-Kahn, the former Managing Director of the International Monetary Fund, before the fierce fight for his succession began. An unwritten rule held that a European leads the International Monetary Fund, while an American heads the World Bank.
Emerging market representatives criticize this situation, arguing that their increasing weight in the world economy calls for better representation on the management boards of international economic organizations.
The Europeans counter-argued with three main points: 1) the quality of the potential candidate, 2) Europe’s leading proportion of IMF funding contributions, and 3) that the present Greek — or more broadly, European — sovereign debt crisis is better understood and managed by a European. What should we make of those arguments?
Granted, there are very good candidates from Europe: current French Finance Minister Christine Lagarde, former British Prime Minister Gordon Brown, former Bundesbank President Axel Weber, or even the Swiss CEO of Deutsche Bank, Joe Ackermann, were among the widely quoted names. But in emerging markets there were equally good potential candidates. Turkish economist and former Head of the United Nations Development Program, Kemal Derviş, for instance. Trevor Manuel, current South African Minister of Planning, is another, so is Augustin Carstens, current head of Mexico's Central Bank. We can also consider Zhou Xiaochuan, the current governor of the People’s Bank of China, who has also written profoundly on reforming the International Monetary System.
The argument that Europe is still the IMF’s main financial contributor has diminishing validity. Truth is that China, the first emerging market, is now the sixth main contributor to the IMF, but by 2013 China will rank third behind the US and Japan. Moreover, by then Brazil, Russia and India will also rank among the top ten contributors.
The final argument for a European head of the IMF was stated most prominently by German Chancellor Angela Merkel: “Given that we have considerable problems with the euro and that the IMF is very strongly involved here, much can be said for the possibility of installing a European candidate.” In my view, this is intellectually slightly dishonest. One could ask: why then was the IMF head not chosen from Latin America during the Argentinean crisis, or from Asia during the Asian crisis? Further, isn’t there a conflict of interest if the IMF head during the European crisis comes from Europe? And if Europeans are such experts at solving their own problems, why do they need the IMF at all?Nevertheless, as I write this article, it seems that the Europeans will have their way once again. Here the emerging markets should hearken: They need to work together a lot better to have a bigger impact in international policy-making. That Mr. Strauss-Kahn would leave soon in any case was known; he had eyes for the French Presidency. Hence, what were emerging markets waiting for? Where is their agreed candidate? They should take a lesson from Europe’s experience in inter-governmental co-ordination.