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IMF Critics Call For Reforms

Mohamed El-Erian, (File)
Mohamed El-Erian, (File)
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Critics of the International Monetary Fund are calling for reforming the global lender and changing the way it picks leaders.

The head of Pimco, the world's largest bond fund, economist Mohamed El-Erian says French Finance Minister Christine Lagarde is likely to be the next IMF Managing Director.  He urges her to "hard-wire" (make permanent) a selection process for the next IMF chief and key staff members that is based on merit rather than nationality.  

El-Erian says the IMF must also strengthen its analytical skills, and find a way to cope with the next financial crisis while the institution has significant resources tied up helping Greece.

In an article he wrote for the Financial Times, El-Erian also says it is time to end the practice of appointing leaders who use the post as a stepping stone to national political offices.  Previous IMF  Managing Director Dominique Strauss-Kahn was expected to run for President of France before he resigned to to face trial on sexual assault charges.

A scholar at the Peterson Institute for International Economics calls the current selection process "rigged."  In an e-mail to journalists Arvind Subramanian says the selection of a European to head the IMF will slow needed reforms.

Brazil's Finance Minister Guido Mantega says one reform he wants to see is a larger role for fast-growing emerging nations like his in the IMF.  He says Lagarde has promised to continue IMF reforms, which may be why Brazil endorsed her candidacy on Tuesday.

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