Dominique Strauss-Kahn gets less power and more stress than his forerunners. Photo / Reuters
Former French Finance Minister Dominique Strauss-Kahn has been named the next head of the International Monetary Fund, inheriting an organisation suffering from the weakest loan demand in almost three decades.
The IMF said the nomination of Strauss-Kahn, 58, was approved by the lender's executive board at the weekend
and he would start on November 1.
He succeeds Rodrigo de Rato, whose three years in the job made him the shortest-serving managing director in the fund's 60-year history.
The IMF's influence has diminished since it dispatched record sums from Seoul to Sao Paulo a decade ago to rescue economies after the collapse of their currencies.
Analysts said more developing countries than ever were borrowing from private capital markets, making the IMF less necessary.
"Being the head of the fund has never been less powerful and more stressful than it is now," said Jeff Powell, who heads the London-based Bretton Woods Project, which monitors the IMF and World Bank.
Strauss-Kahn's appointment was assured after the European Union and the Bush Administration backed him for the position. Under an agreement that began after World War II, a European leads the IMF, while an American is president of the World Bank.
His only rival for the job was former Czech Prime Minister Josef Tosovsky, who had Russia's backing yet did not have the support of his own Government.
French President Nicolas Sarkozy thanked Europe, the US, China, Brazil, India and "all nations" who supported Strauss-Kahn.
"Let's get to work to make the IMF an organisation that's even more at the service of countries that so much need it," Sarkozy said in Paris.
During his tenure, De Rato sought to give more voting power to emerging economies such as China. Strauss-Kahn agrees, saying first he aims to "rebuild the legitimacy of the fund".
Strauss-Kahn has given few specifics about how he plans to lead the agency, other than to indicate a need to increase the relevance of large developing countries such as China, Brazil and Mexico, who still tend to see it as a disaster to them.
- Bloomberg
