South Africa in bid for IMF panel job


The finance ministers of Singapore and South Africa have emerged as the only contenders to chair the International Monetary Fund’s main advisory committee, says IMF board sources.

Singapore Finance Minister Tharman Shanmugaratnam, a former central banker, is the favorite over South African Pravin Gordhan to head the IMF’s International Monetary and Financial Committee, board sources told Reuters.

The sources said an announcement was expected as soon as Friday if the fund’s managing director, Dominique Strauss-Kahn, can narrow the selection to one. Failing that, the outcome will be determined in a secret vote by the IMF board members.

It would be a first time for either an African or Asian country to hold the post.

Several sources said Strauss-Kahn favored Singapore because of the IMF’s recent push to get Asia on its side as the fastest growing part of the world economy. The Singapore government said last month Tharman was in the running.

Strauss-Kahn has also tried in recent months to put the Asian financial crisis finally behind the IMF, whose invasive policy prescriptions have long been blamed in the region for exacerbating the 1997/1998 meltdown.

IMF officials were not immediately available to comment.

The IMFC seat was left vacant last month by Youssef Boutros-Ghali, who was replaced as Egypt’s finance minister in a cabinet shake-up amid protests to topple Hosni Mubarak.

Domenico Lombardi, a former executive board member at the IMF, said by choosing Singapore the IMF would bring Asia further into its fold at a critical time in the global economy, when world finance leaders are focused on overhauling the international monetary system and tackling trade and financial imbalances.
“This is part of a broader strategy aimed at engaging Asia in the new round of reforms which will be centered on the international monetary system instead of on the IMF itself,” said Lombardi, a senior fellow at the Brookings Institution think tank in Washington and president of the Oxford Institute for Economic Policy.

The IMF has just completed a series of reforms to give emerging market economies in Asia and elsewhere greater say in the institution by boosting their voting power.

Lombardi said Singapore was regarded as a key bridge between East and West, an important factor when it came to addressing tensions between the United States and China over such things as trade imbalances.
“Singapore is uniquely placed to facilitate a dialogue between the U.S. and China,” he added.

On the other hand, if South Africa led the IMFC, it would be a “great achievement for Sub-Saharan Africa,” Lombardi said. “This would go a long way in the long journey initiated by (former IMF chief) Michel Camdessus that sought to make low-income countries regular, fully fledged members of this institution.”

Boutros-Ghali was the first finance minister from a developing country to hold the post, which had always gone to a European except for a brief period when a Canadian held the job.

The committee officially meets twice a year — during the IMF meetings in the spring and fall — to discuss the direction of the institution. It is comprised of finance ministers and central bank governors from 24 countries.

The new chairman will take over at a time of heightened uncertainty in the world economy, with protests sweeping the Middle East and North Africa, and Japan’s devastating earthquake and tsunami raising concerns about the extent of damage to the world’s third-largest economy.