PRESS RELEASE
For immediate release: 5 May 2004
Was Rato the best candidate? We’ll never know.
Unsurprisingly, the candidate of the European Union for the position of the Managing Director of the IMF, former Spanish Finance Minister Rodrigo Rato, has been confirmed in a mock voting procedure in the IMF Board on 4 May. Mr. Rato will take up the top job at the most important global financial institution in June for a period of five years. He won in a secret straw vote against Mohamed El-Erian, the candidate nominated by the Egyptian representative to the Board.
the IMF must simply be called for what it is: an unrepresentative and undemocratic organization
Since the resignation of Mr. Horst Koehler from the helm of the IMF in March this year, the procedure for the selection of the IMF Managing Director has been severely criticised for its lack of transparency and democracy by developing countries, senior management of the IMF, and NGOs worldwide.
“Rato’s appointment continues the tradition that gives the European Union de facto control in selecting the head of the IMF” comments Alex Wilks of the Bretton Woods Project. “Backroom political deals ensured Rato’s election, making a mockery of the vote. Due to the lack of transparency of board proceedings, we can’t even know how much support El-Erian received in the straw vote.” According to media reports, Mr. El-Erian demonstrated detailed knowledge of the Fund’s work in the interview with the Board, while Mr. Rato’s view of the IMF as primarily a political institution went down poorly with some Executive Directors. Questions remain as to how much support Mr. Rato can expect from European counterparts in the wake of the political horse-trading which marred his candidacy.
“The IMF conditions it financial support to developing countries to democracy and good governance, but fails to employ such principles itself”, comments Martin Koehler of Italian NGO CRBM. “As long as the powerful members in the IMF reject any reform of its voting structure in order to reflect the increasing importance of developing countries in the global economy, the IMF must simply be called for what it is: an unrepresentative and undemocratic organization.”
Bretton Woods Project and CRBM have called for a timetable to be put in place for a complete overhaul of the selection process before the term of the current World Bank president expires next year. “Broader democratic reforms – as called for in the Monterrey financing for development process – must be urgently addressed.”
Notes to editors:
- Bretton Woods Project is a London-based independent NGO which focuses on the policies and projects of the World Bank and IMF.
- CRBM (Campagna per la riforma della Banca Mondiale) is a Rome-based NGO monitoring international financial institutions.
Contact:
Jeff Powell, Bretton Woods Project, London on +44-(0)207-561-7610
Martin Koehler, CRBM, Rome on +39-0678-26855
