July 8, 2000
International lenders are taking another look at how to choose their bosses after this year's bruising battle between Europe and the United States over who should head the International Monetary Fund.
An IMF statement released Friday said the fund was setting up an eight-member working group to look at the issues. Chaired by Japan's representative at the IMF, it includes just one representative from Western Europe, which has provided the IMF with each of its eight managing directors to date. ''The aim is to review the process we experienced last time where there were prolonged delays,'' said panel chairman Yukio Yoshimura. ''It was not so efficient,'' he added.
Horst Koehler in March became the first German to head the IMF, which was set up to rebuild a tattered world financial system after the Second World War. But a prolonged and acrimonious selection process dented European assumptions that a European should head the IMF -- a cozy diplomatic arrangement which also guaranteed that an American would head the World Bank.
In an unprecedented departure from the behind-the-scenes manoeuvring of the past, IMF countries put up two alternative candidates to Europe's first nominee, German deputy finance minister Caio Koch-Weser. The United States escalated the dispute when it announced bluntly it would not back Koch-Weser, dismissing his experience at the World Bank as irrelevant to the sensitive IMF job and urging Europe to come up with someone else.
Koehler was Europe's second nominee. But even his predecessor, Frenchman Michel Camdessus, admitted that the old system giving Europe the IMF and handing the World Bank to an American was wrong. ''We have to think about the way in which Europe and the United States still see themselves as owners of these two institutions,'' Camdessus said after Koehler got the job.
The IMF said its new working group would report back to the board before the IMF annual meeting in September. World Bank officials said the bank was setting up a parallel working group, to be chaired by Swiss Executive Director Matthias Meyer, and the two groups would co-operate closely as they looked at the options. At the height of the IMF succession debate, many experts argued that the institution should set up a selection panel to find the best possible candidate, regardless of nationality. The panel contains a broad cross section of IMF member states. In addition to Japan's Yoshimura, its members come from Angola, Australia, Canada, Egypt, Germany, Mexico and Russia.
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