By: Randa Rugangazi
The International Monetary Fund (IMF) has appointed Christine Lagarde, the French finance minister, as the new IMF Managing Director. Ms Lagarde is the fund’s first female head, also the fifth French pick out of the 11 heads in IMF’s history. Her term will begin on July 5.
IMF is an intergovernmental organization that oversees the global financial system, by specifically monitoring exchange rates and balance of payments of its member countries. It also facilitates development in poorer countries.
Lagarde travelled around the world trying to win the backing of world powers. Her win was assured after she earned the backing of America and China earlier this week. She was bidding for the IMF top position against the head of Mexico’s central bank, Agustín Carstens.
However, her bid has been criticized by many who think that the IMF is handicapped by the lack of diversity in its heads. All of IMF’s 11 heads have come from Europe. Lagarde’s appointment does not help quell criticism that the developing world doesn’t have much say in the IMF’s policymaking.
The IMF voting system has the U.S with the most voting shares of 16.74 percent, followed by Japan, Germany, France, and UK.
Ms Lagarde comes into office at a difficult time in the Europe. The IMF is currently overseeing the financial bailouts of three European countries- Greece, Ireland and Portugal. Greece’s economic woes have led to large public protests. A financial bailout is giving money to a country facing the danger of financial bankruptcy.
Emerging countries will not see Lagarde’s appointment as a favorable decision to their interests. A former IMF chief economist, Simon Johnson, pointed out in the New York Times that Lagarde’s appointment merely shows self interest by Europe- to sort out their own economic troubles.
She succeeds Dominique Strauss-Kahn who resigned from the position on May 18 due to sexual assault charges brought up against him.
Strauss-Kahn was appointed IMF chief in July 2007 with the personal support of French President Nicolas Sarkozy. He was formerly minister of economics, finances and industry from 1997 to 1999. It was speculated that he would be a presidential candidate from the French Socialist Party in the next French presidential elections.
The accuser in Strauss-Kahn’s sexual case hasn’t been identified in the media. But it has been revealed that she is a recent immigrant from Guinea to the U.S. She is charging Strauss-Kahn of sexual assault and attempted rape at the Sofitel New York Hotel where he was staying. She is a housekeeper at the New York hotel.
Strauss-Kahn posted bail of $1million with additional $5million bail bond; he is under house arrest with electronic monitoring. He pleaded not guilty on 6th June; the next court date is set for 18 July.
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