The arrest of IMF chief
Q. How large of a role has Strauss-Kahn played as the IMF chief over the past few years, particularly during the European debt crisis?
A. He has been a very important part of the IMF. The managing director is key in terms of being able to set the agenda for the fund in the areas in which he wants to have it involved. He's done a tremendous job of raising the profile of the IMF, particularly in the context of the current economic and financial crises. He has projected the fund into the role it was intended to have in terms of trying to coordinate the activities of a number of countries in response to the crisis and, now, with the recovery of the world economy. He has also furthered efforts to change the governance at the fund in order to provide greater representation to emerging-market countries, which have become much more important in the global economy.
With respect to the current debt crisis in
Q. In the event he steps down, how much of an impact will this have on the current EU/IMF proceedings, particularly the negotiations regarding the Greek bailout and the other countries you've mentioned?
A. In the very short term, it should have a significant effect. He was on his way to
Q. Is it fair to say that Strauss-Kahn helped the negotiating process by forging close relationships with high-level politicians in many countries, particularly with the Greek bailout?
A. Traditionally, that has been the role of the managing director. The head of the IMF has access to leaders in countries that the staff, particularly in the bigger countries, do not have. When I was the IMF's mission chief for
Q. Where do you think this scandal leaves the reputation of the IMF?
A. I don't think it will have an effect on the reputation of the institution itself. This is more of a personal problem and will have more of an impact on Strauss-Kahn himself. In the long term, it will probably create some difficulty for the Europeans, especially in the context of talking about a successor for Strauss-Kahn, should he decide to leave. There was the expectation that he was going to leave within the next couple of months to pursue the nomination of the Socialist party for the president of
There was a tacit understanding this old arrangement was going to end after Strauss-Kahn, where in the future the position would be filled on the basis of merit. However, at the end of the day, there is bound to be some type of political tradeoffs for such an important post. This might guarantee, in effect, that the next managing director will come from someplace outside
Q. How does that process work?
A. Member countries can make nominations for the post. The IMF's executive board meets to discuss the nominations, and they may reduce the list of candidates down to a few and conduct interviews with those people. At the end of the process, it's the executive board that decides. Behind the scenes, there are probably a lot of discussions between countries pushing particular candidates and, at the end of the day, it has historically been a consensus choice on who becomes the managing director.
Q. Given what is going on in the world, specifically the European financial crisis, is it your sense that the IMF should have another European as managing director?
A. No. I don't think that argument carries a lot of weight. During the Latin American debt crisis in the 1980-1990s, you could use that argument to say that a Latin American should have been the head of the IMF, but nobody raised it at the time. The same goes for the Asian financial crisis. The fact that there are problems in
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