50 Years Statement on IMF Appointment of Rodrigo Rato as Managing Director
50 Years Is Enough listserv
May 4, 2004
FOR IMMEDIATE RELEASE
May 4, 2004

50 Years Is Enough: U.S. Network for Global Economic Justice

Contact: Njoki Njoroge Njehu or Soren Ambrose
202-463-2265

IMF CRITICS DENOUNCE SELECTION OF
RATO AS NEW CHIEF

WASHINGTON, DC - May 4 2004 – The 50 Years Is Enough Network, a
coalition of over 200 U.S. organizations dedicated to the fundamental
transformation of the International Monetary Fund (IMF) and the World Bank,
issued the following statement today in response to the IMF board’s expected
naming of Rodrigo Rato as the institution’s new Managing Director:

Two months ago, when Horst Koehler resigned as head of the IMF, the
institution was presented with an opportunity to demonstrate that it was
serious about becoming transparent, accountable, and open. With the
culmination of that process today, the IMF has failed on all counts.

Just as in the case of every previous Managing Director, Rodrigo Rato is from
Western Europe, and was chosen through an opaque series of back-room
negotiations among that region’s IMF shareholder governments. Only a
handful of European officials were so bold as to defend the custom of
reserving the position for someone from their region, but none took any
tangible steps to change it. Dozens of respected observers called for an
opening of the process. Koehler himself in the last few days has called for a
restructuring of the IMF. A large proportion of IMF staff endorsed a statement
calling for an open process. Guideline for the selection process formulated by
a joint IMF/World Bank committee after objections were raised to the manner
in which Koehler was nominated were largely ignored on the grounds that the
board never officially adopted them.

Indeed, we can only address today’s board meeting in generalities, since
neither the public nor the media will be allowed to learn what was said or
what positions individual board members took – not because of the sensitivity
of the topic, but because that is the rule for all IMF board meetings, where all
policy decisions are made and loans approved.

It is ironic that, according to the Financial Times, reports from within the board
suggest that the most significant concern about Rato’s candidacy was his
contention that the IMF is more a “political” than a technocratic institution.
This obvious fact has long been denied by the IMF in its quest to appear
neutral and scientifically objective. Surely the manner of Rato’s selection is
the best proof of his observation: hardly a nod to any process designed to find
the best candidate, just the whim of the region with one-third of the votes at
the board.

Some at the IMF will point to the nomination of Mohammed El-Erian, from
Egypt, and his official interview with the board as a sign of increased
openness. The usefulness of the precedent set, however, was put in
perspective by an IMF executive director quoted by the Financial Times: “It
was not a total success in that the decision as to who is going to get the job
has already been made.”

Europe’s collective domination of the votes at the IMF was augmented by the
support of the United States government, the largest single shareholder.
Once Europe settled on Rato as its candidate, the U.S. signalled its approval
– hardly a surprise, since it will want similar cooperation when it comes time
to exercise its customary prerogative to unilaterally name the President of the
World Bank next year.

The reprise of the closed selection process for Managing Director confirms
our view of the IMF: it is a multilateral institution in which control is tightly held
by a small number of governments, none of which are IMF clients. The
programs mandated by the IMF benefit business and investor interests in that
same small groups of countries, but have done inestimable harm to literally
billions of people in the rest of the world over the last 25 years. No Managing
Director chosen by the IMF board would be likely to change the direction of
the institution. What is striking is how careful the reigning powers are to make
sure that their control remains absolute. Today’s appointment of Rodrigo
Rato is sad confirmation that the IMF has no intention of becoming more
open, accountable, or transparent – least of all to the people who suffer under
its policies.

As the IMF marks its 60th anniversary, it is clear that real change will not
happen through internal processes, but will require political pressure from
people around the world. The 50 Years Is Enough Network, together with its
partners and allies around the world, will redouble its efforts to ensure that
such pressure is applied.