Open letter demanding a fair selection process for the next IMF managing director

To governors and executive directors of the IMF,

The ‘gentleman’s agreement’, which has ensured that the IMF managing director has, for 75 years, been European and the World Bank president a US national, is undemocratic, illegitimate, and rooted in neo-colonial principles.  

International institutions currently face a crisis of legitimacy, as faith in the multilateral system of global governance withers. If the IMF and World Bank want to present themselves as modern institutions capable of tackling today’s challenges, it is imperative that they become democratic and accountable to all of those they represent.

Despite over 150 civil society organisations and individuals calling on the World Bank for an open, transparent and merit-based leadership succession process earlier this year, the US candidate David Malpass was appointed president of the World Bank. This, exacerbated by the fact that the only other nominee cited pressure from “other governments” as the reason for withdrawing, brought global governance into further disrepute.

It is high time to end the ‘gentleman’s agreement’ and replace it with a genuinely open, democratic, merit-based, transparent process, that goes beyond rhetorical commitment, and allows candidates, regardless of nationality, to be put forward on an equal footing. In line with longstanding civil society demands, we believe that no country – or indeed bloc of countries – should wield excessive power in this process. Instead, the winning candidate should gain support of a majority of both voting shares and member states.

The opaque nature of the selection process must be scrapped in favour of a transparent one that allows space for public scrutiny of candidates. This should entail a commitment to ending the convention that candidates must be supported by the government of their home country – which restricts applications – as well as public interviews, transparent voting procedures, and sufficient time to allow for deliberation.

Building on the IMF’s candidate profile, a clear job description and comprehensive set of qualifications should be drafted and made public. This should include the ability to defend the independence of the IMF from its powerful members and stand up for less powerful nations. It is vital that candidates are well-versed in problems experienced by low- and middle-income countries.

Recognising the IMF as a specialised agency of the United Nations, it is essential that candidates are committed to embedding the IMF in agreed international frameworks and norms, such as international human rights law, and are dedicated to building on the IMF’s recent commitments on economic inequality, social spending, gender inequality, and climate change.

The IMF leadership race coincides with the 75th anniversary of the creation of the Bretton Woods Institutions. 75 years is enough – It is time to end the ‘gentleman’s agreement’.

Signed,

  1. ActionAid International 
  2. Adam Tooze, Director of the European Institute, Columbia University
  3. Africa Development Interchange Network (ADIN) 
  4. African Coalition on Green Growth 
  5. Afrodad 
  6. AfroLeadership 
  7. Age International  
  8. Alan Cibils, Professor of Political Economy, Universidad Nacional de General Sarmiento 
  9. Alexander Kentikelenis, Assistant Professor of Political Economy and Sociology, Bocconi University 
  10. Alliance Sud 
  11. Arab NGOs Network for Development
  12. Asia Monitor Resource Centre
  13. Association for Promotion Sustainable Development
  14. Bank Information Center Europe 
  15. Bilge Erten, Assistant Professor, Northeastern University 
  16. Bonn Juego, University Teacher and Researcher 
  17. Bretton Woods Project 
  18. Buendnis Eine Welt Schleswig-Holstein   
  19. CAFOD (Catholic Agency for Overseas Development) 
  20. CAFSO-WRAG for Development  
  21. CEE Bankwatch Network 
  22. CEKOR (Center for ecology and sustainable development), Serbia 
  23. Center of Conjuncture and Economic Policy of the Economic Institute of the University of Campinas  
  24. Centre National de coopération au développement CNCD-11.11.11 
  25. CESR  
  26. Christian Aid  
  27. Civil Society Coalition on Sustainable Development  
  28. Common Wealth  
  29. Community and Family aid, Ghana
  30. Congregation of Our Lady of Charity of the Good Shepherd 
  31. Daniela Gabor, Professor of Economics and Macro-Finance, University of the West of England.
  32. DAWN 
  33. Debt Justice Norway 
  34. DemNet Hungary 
  35. Democratic Culture, Argentina  
  36. Diane Elson, Emeritus Professor, Department of Sociology, University of Essex
  37. Dr Catherine Bernard, Founder-director of SERFAC
  38. Dr. Jeff Powell, University of Greenwich 
  39. Društvo EnaBanda 
  40. Ecumenical Academy, Czech Republic
  41. Erlassjahr.de
  42. Eurodad 
  43. Fight Inequality Alliance  
  44. Financial Justice Ireland  
  45. Free Trade Union Development Center
  46. Friends of the Earth US 
  47. GADN  
  48. Gestos, Brazil  
  49. Global Alliance for Tax Justice 
  50. Global Justice Now  
  51. Health Poverty Action 
  52. Help Age International  
  53. Ilene Grabel, Distinguished University Professor, University of Denver 
  54. International Trade Union Confederation  
  55. International Women’s Rights Action Watch Asia Pacific
  56. Isabel Ortiz, Director Global Social Justice Program, IPD Columbia University 
  57. Jason Hickel, senior lecturer, Goldsmith’s University
  58. John Miller, Professor of Economics, Wheaton College, Norton, MA 
  59. John Weeks, Professor Emeritus SOAS, University of London
  60. Jubilee Australia 
  61. Jubilee Debt Campaign UK  
  62. Jubilee Germany
  63. JusticeMakers Bangladesh  
  64. Khartoum Sudan 
  65. Latinddad 
  66. Madhyam (New Delhi)  
  67. Nancy Alexander
  68. National Society of Conservationists – Friends of the Earth Hungary 
  69. New Economics Foundation  
  70. Nigeria Private Sector Alliance  
  71. Oikos – Cooperação e Desenvolvimento 
  72. Olive Community Development Initiatives, Nigeria
  73. Oxfam  
  74. Peter O’Flynn, Researcher, Development Finance and Impact Investing, Institute of Development Studies 
  75. Phenix Center for Economic and Informatics Studies, Jordan 
  76. Professor Sir Richard Jolly, Research Associate, Institute of Development Studies 
  77. Radanar Ayar Association from Myanmar 
  78. Radhika Balakrishnan, Rutgers University 
  79. Religious of the Sacred Heart of Mary NGO 
  80. Rethinking Economics  
  81. Rick Rowden PhD
  82. SDGs Kenya Forum 
  83. Sisters of Charity Federation 
  84. Society for International Development  
  85. Stamp Out Poverty 
  86. Stephany Griffith- Jones, Emeritus Professorial Fellow, Institute of Development Studies, Sussex University 
  87. Tax Justice Network 
  88. The Feminist Task Force
  89. The Hunger Project 
  90. Thomas Stubbs, Senior Lecturer in International Relations 
  91. Trademark Belfast 
  92. UndebtedWorld 
  93. Urgewald
  94. VIVAT International
  95. War on Want  
  96. Wemos 
  97. Willow Empowerment For Grassroot Development Initiative  
  98. Womankind Worldwide 
  99. Women’s International League for Peace and Freedom  
  100. Youthhubafrica 
  101. Zimbabwe United Nations Association 

The IMF and inclusive growth: achieving SDG8

Under the leadership of Christine Lagarde, the IMF endorsed the Sustainable Development Goals (SDGs) and portrayed itself as a champion of inclusive growth. However, little changed in IMF loan agreements, which continued to push the same harmful austerity and deregulation measures of the past. The next leader of the IMF needs to change the core operations of the institution to promote sustainable economic growth, full employment and decent work.

The IMF has not meaningfully supported the SDGs, and its policies undermine the ability of countries to achieve the 2030 Agenda. To illustrate this point, let’s take a look at SDG 8: “promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work.”

In a recent report, the International Labour Organization (ILO) shows that the world is not on track to achieve SDG 8 by 2030. For that to change, a major shift in macroeconomic policies is needed.

Orthodox economic policy models, like those promoted by the IMF, focus on supply-side measures and assume that growth will eventually trickle-down. Reality has shown that this is not the case. Furthermore, these models have failed to bring sustained growth the developing world.

Under the guise of “efficiency” the IMF has worked at odds with a decent work growth agenda,  often undermined labour market institutions, pushing for cuts in public wage bills, deregulation and weakening of workers’ rights. This approach, along with sharp spending cuts, lead to a downwards spiral in which the economy shrinks, unemployment grows, poverty soars, and aggregate demand in the economy collapses. The IMF itself admitted that most loan programmes fail to meet  growth targets.

Continue reading “The IMF and inclusive growth: achieving SDG8”

For the record…

Chronicling the ‘open, merit-based, and transparent process’ thus far

It struck me that in the event Kristalina Georgieva becomes the next IMF managing director (MD) and serves out her two terms, that, ten years from now, when there will once again be calls to end the gentleman’s agreement, we might find ourselves wondering how exactly another European got the job at the time. By what ‘open, merit-based and transparent process’ did the powers-that-be decide that, across their entire membership, the former World Bank CEO from Bulgaria was the most qualified and distinguished candidate (“without taking geographic preferences into account”, of course)?

As most decisions thus far have taken place behind closed doors with only occasional crumbs of information coming through, mostly from a few ardent reporters’ twitter feeds, this is an attempt at establishing a record of the step-by-step ‘open, merit-based, and transparent’ process leading up to Kristalina’s nomination by the European Union, based on public reporting and the, albeit sparse, official information made available (reflecting Brussels’s location in the centre of the known IMF universe, all times are CEST).

  • 2 July: Aaaaand we’re off! Lagarde announces her European Central Bank presidency nomination and relinquishes her responsibilities as IMF MD during the nomination period.
  • 8 July: Bloomberg reports European finance ministers say it is a “priority” for them to put another European in place, jointly presented by the EU and, in the words of French politician Bruno Le Maire, “without useless rivalries” (erm, should we just stop there?)
  • 12 July: The day the Dutch government demonstrates how aggrieved they really feel about being side-lined in the negotiations for top EU positions:
    • Dutch government nominates its former finance minister Jeroen Dijsselbloem and kicks off its lobbying campaign for his candidacy with key governments;
    • Dutch prime minister Rutte softens his stance on US requests to provide military support in the Strait of Hormuz and Syria ahead of his visit to the White House the following week.
  • 16 July: Lagarde submits resignation as IMF MD effective from 12 September, after being confirmed as new ECB president.
  • 19 July: José Antonio Ocampo, former nominee in 2012 for World Bank president, with “experience in all the areas that might be considered most relevant for the IMF Managing Director post”, publishes his vision for reforming the IMF toward a more effective and inclusive future – to deafening silence from officials…
Continue reading “For the record…”

Call on civil society organisations and academics to sign the campaign Letter to end the ‘gentleman’s agreement’

The ‘gentleman’s agreement’, which has ensured that the IMF managing director has, for 75 years, been European and the World Bank president a US national, is undemocratic and illegitimate. 

Bretton Woods Project, alongside our global partners, has drafted a campaign letter to be sent to IMF executive directors, governors and deputy governors, calling on them to bring about a genuinely open, democratic, merit-based, transparent process, that goes beyond rhetorical commitment, and allows any government, regardless of nationality, to put forward candidates on an equal footing.

If you are a civil society organisation or an academic interested in supporting the campaign, send an email to mbrett@brettonwoodsproject.org, who will send you a copy of the letter to sign. The deadline for signatures is close of play on Thursday 15th August.

75 years is enough – It is time to end the ‘gentleman’s agreement’.