New Managing Director Wants the IMF to Play a Greater Role in International Development

Sources: Financial Times: Strauss-Kahn focuses on IMF reform; Reuters: France’s Strauss-Kahn expected to be named IMF chief

Dominique Strauss-Kahn, the newly confirmed managing director of the International Monetary Fund (“IMF”), announced today that he wants the IMF to move away from its role as the international economic disciplinarian to become a more prominent actor in international development. To this end, Strauss-Kahn has proposed to reorganize voting within the IMF to give greater weight to large, middle-income countries. He has also stated that he wants IMF to contribute to a coherent international development effort by strengthening its relations with the World Bank, the United Nations Development Programme, and the World Trade Organization.

On September 28, Strauss-Kahn beat Josef Tosovsky for the nomination to become the next managing director for the IMF. Strauss-Kahn’s success demonstrates Eruope’s continued power to designate the head of the IMF. Tosovsky was Russia’s candidate for the position.

Discussion:

Will Strauss-Kahn’s proposed reforms help the IMF regain its relevancy in the international economic order, given that altering its mandate this way would make the new IMF very similar to the World Bank? In other words, is it necessary to have two international financial institutions that basically have the same function and provide very similar services to the same clients?