Sunday, May 26, 2024

ECONOMY | 04-04-2024 16:29

IMF chief Kristalina Georgieva sole candidate in re-election process

IMF Manging Director Kristalina Georgieva poised for a second term as nominations close.

Kristalina Georgieva is poised to win a second five-year term running the International Monetary Fund after the nomination period closed with no other candidates put forward to challenge her.

The IMF confirmed Thursday that its current managing director is the only candidate to lead the global financial institution. With the period for submitting nominations closing one day earlier, "one candidate, the current Managing Director of the IMF, Kristalina Georgieva, has been nominated," read a statement.

The announcement makes Georgieva's return to the top job at the IMF almost certain once her term ends on September 30. 

Under a controversial, decades-old agreement between Europe and the United States, the International Monetary Fund has historically been led by a European, and the World Bank by a US citizen. 

This unwritten arrangement was reaffirmed last year when the US President Joe Biden administration nominated Ajay Banga, an Indian-born, naturalised US citizen, to run the World Bank, which sits just across the street from the IMF in Washington.

The IMF said its 24-member Executive Board, which chooses the managing director, hopes to complete the selection process by the end of April.

Several nations were closely watching who would succeed Georgieva, including Argentina, which has a US$44-billion credit programme with the IMF.

The managing director has repeatedly backed President Javier Milei, praising his "bold measures to restore macroeconomic stability."


Building 'trust'

Georgieva, 70, has run the IMF since 2019, and told AFP last month that she was making herself "available to serve, if people want me to serve."

During her tenure, the IMF has helped countries facing financial difficulties during the coronavirus pandemic as well as the havoc wrought by Russia's invasion of Ukraine, especially in Europe. 

More recently Georgieva warned about the global economic impact of trade fragmentation caused by worsening US-China relations. 

She’s also advocated for re-balancing the representation of developing and emerging countries at the IMF, where their voting shares are much smaller than their share of global output.

Georgieva has also been an advocate of pro-market economic reforms in China and a key driver of efforts to bring it further into the global financial system, most notably by pushing Beijing to coordinate with Western creditors on emerging market debt issues, where it’s been a major lender.

Georgieva faced allegations in 2021 – which she strongly denied – that she had been involved in amending a popular World Bank business report in order to favour China when she worked at the development lender. 

But after reviewing the World Bank report into the incident, the IMF’s Executive Board dismissed the allegations and reaffirmed its confidence in Georgieva, allowing her to remain in post. 

Nevertheless, a group of Republican lawmakers in the United States last month demanded that Washington use its influence to replace Georgieva, citing reports of ethical breaches and inability to hold China accountable for its lending and currency practices.

A Bulgarian national, Georgieva received backing from key European allies including European Union finance ministers, and Dimitar Radev, the head of Bulgaria's Central Bank, all but guaranteeing she would be re-nominated. France and Germany have also backed her re-election.


In her AFP interview, Georgieva said that if she is reelected she will "bring to the job a determination for the Fund to be an institution that leans forward in addressing the most challenging problems we face."

These challenges include boosting productivity and growth, "so more people have a better chance," tackling elevated post-pandemic debt levels, and making the IMF "more inclusive and more representative, so it can enjoy the trust of our members and people," she added. 

Georgieva's solitary nomination mirrors that of Banga, who ran for the World Bank job unopposed after he was put forward by Biden. 

The former Mastercard executive took over the reins of the development lender last summer, and has since embarked on a mission to "fix the plumbing" of the bank so it can operate more effectively. 

Georgieva and Banga will be co-hosting the world's financial leaders at the IMF and World Bank's spring meetings in Washington later this month. 

Thursday's announcement means the meetings will proceed without a distracting battle over the future of the IMF running in the background. 



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