Lagarde vows more clout for emerging markets

WASHINGTON—The new chief of the International Monetary Fund pledged yesterday to diversify the global lending organisation and give developing nations a greater voice on its board. Christine Lagarde is the first woman to lead the IMF. She takes over after her predecessor, Dominique Strauss-Kahn, resigned in May to fight charges that he sexually assaulted a New York City hotel housekeeper. Lagarde is under pressure to address the institution’s long-standing reputation as a melting pot of Western elites—one that was known for male-dominated clubbiness.

Lagarde said she will push to make the institution’s staff more diverse. She said she will also continue reforms begun last year that increase the voting power of countries such as China and Brazil. “The value of diversity is top on my list of priorities,” Lagarde said yesterday in her first news conference since assuming the top job. “It’s not just gender diversity. It’s about culture. It’s about academic background.” The former French finance minister is facing many immediate challenges. Lagarde is the 11th European to run the IMF. She must convince the developing world she will make the institution a more open place for non-Western nations. At the same time, she’ll have to persuade her fellow Europeans to take painful steps to avoid a default by Greece.

Europe controls about 32 per cent of the votes on the board and the United States maintains nearly 17 per cent. By contrast, China, the world’s second-largest economy, has roughly four per cent of the votes.
Last year the IMF began steps to shift more power to developing countries. Under those measures, China would see its voting share increase to six per cent. Europe would give up two seats on the 24-member board. The changes still must be approved by individual nations. The IMF’s governance “must be adjusted to reflect the new architecture of the world,” Lagarde said.

“That should also reflect in our employment policies, and our training policies,” she said, “And …in the way in which we organise recruitment so that people are not clones of each other.” Lagarde deferred most questions about the Greek debt crisis. (AP)