As I mentioned in our recent Town Hall, the former Managing Director regrets that he is not going to be able to address us in person, but expressed his desire to send a message to Fund staff as soon as it was feasible.
I have just received the following letter from him, and I wanted to share it with you as quickly as possible.
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SYDNEY — Merit, not nationality, should determine who replaces Dominique Strauss-Kahn as the chief of the International Monetary Fund (IMF), the finance ministers of Australia and SA said in a joint statement yesterday.
The call comes as support grows for French Finance Minister Christine Lagarde to become the next MD of the IMF — Britain’s Chancellor of the Exchequer George Osborne being the latest in a cascade of European endorsements for her.
Ms Lagarde’s chances received a boost on Friday when former Turkish economy minister Kemal Dervis — seen as the leading emerging market candidate — ruled himself out of the running.
Australian Treasurer Wayne Swan and SA’s Finance Minister Pravin Gordhan, who jointly chair a Group of 20 (G-20) committee on IMF reform, said yesterday that the convention that the fund’s MD was a European was out of date. Mr Gordhan and Mr Swan said a G-20 agreement adopted in Pittsburgh in 2009 calling for an open selection process for the IMF chief should be honoured.
"For too long, the IMF’s legitimacy has been undermined by a convention to appoint its senior management on the basis of their nationality.
"In order to maintain trust, credibility and legitimacy in the eyes of its stakeholders, there must be an open and transparent selection process, which results in the most competent person being appointed as MD, regardless of their nationality," they said.
The financial institutions established by the 1944 Bretton Woods conference have operated for 60 years under an informal but rigidly enforced rule that the IMF is headed by a European while an American leads the World Bank.
Separately, Mr Swan pointed to the increasing importance of emerging economies, particularly in Asia, as a reason for considering non-Europeans for the post.
"The tradition of automatically appointing a European to the role is one that’s long past its use-by date, given the shift of global economic weight to emerging economies, particularly Asia, over the past few decades," Mr Swan wrote in an economic note.
Developing countries want the top job at the global lender to go to one of their candidates but have failed to agree on whom they should support. Mexico last night said it would nominate the head of its central bank Agustin Carstens to lead the IMF.
Mr Brown declined to answer questions on that issue. "I’m not as interested in talking about personalities, (as in) how we shape the agenda for the future," he said.
Steps had to be taken to mitigate the fallout of the global financial crisis of 2007-09. "We are out of the first part of the crisis — preventing a recession from becoming a depression. But there are two other problems," Mr Brown said.
First, there was no global system to avoid a crisis, with common standards and adequate supervision. Second , economic growth was not fast enough to create jobs in the face of youth unemployment, he said.
On education, Mr Brown was scathing in his criticism of global leaders’ lack of will to tackle an "education emergency".
"This is a scandal that makes me really angry … no injustice should last forever," he said.
Mr Brown said if the world continued existing education policies, there would be 75-million children without primary school in 2015, up from 68- million now. Millennium Development Goals proposed universal primary education by 2015.
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