By Arab News
By Frank Kane*
Job description: The head of one of the most important organizations on the planet, aiming to “foster global monetary cooperation, secure financial stability, facilitate international trade, promotehigh employment and sustainable economic growth, and reduce poverty around the world.”
Candidates should have a proven track record in international finance and economics, be willing to undertake a punishing schedule of global travel, be familiar with and comfortable in the corridors of power, and have excellent presentational and networking skills. And they should be European.
That is not how the headhunters would have actually written the job specification for the vacant role of managing director of the International Monetary Fund (IMF), but that is how it is.
The person who will succeed Christine Lagarde this autumn will have to have an impeccable CV at senior echelons of the global financial industry, undoubted leadership skills and a “master of the universe” mentality, but if the candidate is not European, they may as well forget it.
The IMF top job, by convention, goes to a European. This is the result of a deal struck with the World Bank — the IMF’s slightly older and much bigger sister organization — whereby the bank’s top job goes uncontested to an American, on the understanding that the Americans will not challenge the applicant chosen by the Europeans for the fund.
It is a cozy arrangement that was originally struck just after World War II, when Europe and the US ruled the non-communist world and were by far the biggest economic and financial powers.
With the economic rise of Asia, that is plainly no longer the case, but the US-Europe deal persists. Every one of the 13 permanent presidents of the World Bank has been a US citizen, notwithstanding a couple who had dual citizenship.
At the IMF, the rule has been hard and fast. Each of the 11 managing directors has been a European, and five of them have been French. Lagarde was the first woman in the job, succeeding her scandalous compatriot Dominique Strauss Khan and restoring some dignity to the office.
By all accounts, the IMF is set to go down the European female route again. Kristalina Georgieva, a Bulgarian economist and former EU commissioner, has apparently won the approval of other European countries to be put forward as their candidate.
She appears to have many advantages in applying for the job. She would be the first IMF chief from Eastern Europe, and she also has the important backing of President Emmanuel Macron of France. In addition, Georgieva proved herself during a stint as chief executive and acting president of the World Bank. It looks like a European slam-dunk.
But should it be? You could argue that when Lagarde was appointed in 2011, the most important job in the economic world was to keep the fragile EU together, and with Brexit strains growing by the day, the European question is still the one that should dominate IMF priorities.
That would be wrong. The mutually ruinous politics of the smallest continent pale in importance compared with such international issues as trade wars, protectionism, emerging market poverty and inequality, as well as climate change. This requires a truly globalist mindset.
There must be a long list of eminent people from China, India, Japan, South Korea or Southeast Asia who would be up to the job and would enhance its international perspective. But it would probably be a step too far for the Europeans and Americans to let IMF power slip that far East.
What about an Arab in the top IMF seat as a compromise candidate? This is not as far-fetched as some, especially Europeans, might think.
The Middle East sits at the economic crossroads of the world, between East and West, and dominates global energy markets. It also provides a significant proportion of investable capital around the world.
An Arab at the IMF would be reassuring to those in Asia who see both it and the World Bank as instruments of Western control of the world economy, and could give a new impetus to tackle some of the major global issues of the day.
• Frank Kane is an award-winning business journalist based in Dubai.