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WASHINGTON, DC – In reaction to today’s statement by US Treasury Secretary Tim Geithner backing French Finance Minister Christine Lagarde to head the International Monetary Fund (IMF), Oxfam America President Raymond C. Offenheiser made the following statement:
“The process to replace Dominique Strauss Kahn as Managing Director of the IMF has been extremely disappointing.
“The Obama Administration could have stepped up and welcomed emerging powers taking a leadership role in the IMF, as it has done in encouraging the G20 process, signaling a willingness to enter into partnerships in global governance. But it chose instead to be quiet about the disenfranchisement of emerging markets and developing countries in this process and jump on the European bandwagon at the very last minute.
“The influential role of the First Deputy Managing Director of the IMF, traditionally filled by an American, will also be up for grabs in August. There’s a risk that this too will be a ritualistic rather than contestable appointment process unless the US seizes the opportunity to step up and address the democratic deficit in the IMF’s governance.
“Going forward, the Obama Administration must use its 17 percent voting share on the IMF Board and the power of veto to back reforms that reduce the Europe’s dominance, and give other member countries more of a voice.
“Allowing emerging markets a say that accords with their rising global influence will only benefit the institution. If the US and EU continue to hold on to power through structures that reflect an obsolete economic and political world order of years past, the rising powers will inevitably turn away from the organization and toward institutions where they do have a voice.”