By DPA
Washington : Former French finance minister Dominique Strauss-Kahn, making his case to lead the International Monetary Fund (IMF), warned that the IMF risks irrelevance unless member countries agree on reforms.
Strauss-Kahn, in a statement to the crisis lending agency’s governing board, Thursday said he would rebuild the IMF’s credibility and efficiency if elected as managing director for a five-year term.
“Indeed, what might be at stake today is the very existence of the IMF as the major institution providing financial stability to the world,” Strauss-Kahn said, according to his prepared remarks.
Strauss-Kahn, the European Union’s candidate, is expected to win the 185-nation board’s approval to replace Spain’s Rodrigo de Rato, who plans to step down next month with two years left in his term.
The only other candidate is former Czech prime minister Josef Tosovsky, nominated by Russia but rejected even by his own government.
The US has endorsed Strauss-Kahn, who said he logged 60,000 miles travelling the world to meet with member governments and win their backing. IMF governors are expected to vote on the fund’s next head this month.
A key issue facing the next IMF head is pressure from poor countries and emerging economies for greater voting powers in the fund’s decision-making bodies.
“Most emerging, developing and less developed countries do question the legitimacy of the fund,” Strauss-Kahn said. “Who can believe that a change in some percentage points will be enough to rebuild the legitimacy of the fund?”
As fewer countries have drawn on the IMF, the fund’s income on loans has fallen. The IMF has predicted a shortfall of about $224 million for 2008.
Strauss-Kahn, 58, indicated that he supports a reform panel’s recommendation that the IMF sell some of its gold reserves to help fill the gap.
The IMF must remain vital because “the decades to come will bring numerous new financial risks”, he said.