US of­fi­cial pushes for IMF re­form, praises the AIIB

China Daily (Canada) - - ACROSS AMERICAS - By CHEN WEIHUA in Wash­ing­ton chen­wei­hua@chi­nadai­

A se­nior US Trea­sury of­fi­cial ex­pects the In­ter­na­tional Mon­e­tary Fund (IMF) to even­tu­ally have a chief from out­side Europe.

Nathan Sheets, the US un­der­sec­re­tary of trea­sury for in­ter­na­tional af­fairs, was talk­ing about IMF re­form on Tues­day when he was asked if the IMF man­ag­ing di­rec­tor could come from an emerg­ing econ­omy such as China and Brazil.

“I do ex­pect that in the not too dis­tant fu­ture, there will be dis­cus­sions of man­ag­ing di­rec­tors from other parts of the world. And I think that is al­to­gether ap­pro­pri­ate and the way it should be,” he said at a talk at the Cen­ter for Strate­gic and In­ter­na­tional Stud­ies in Wash­ing­ton.

He said the goal would be to find the most qual­i­fied and ef­fec­tive peo­ple to con­tinue to move for­ward in the se­nior lead­er­ship of the IMF.

As a tacit agree­ment be­tween the US and Euro­pean na­tions, the IMF has al­ways been headed by a Euro­pean while the World Bank is presided over by an Amer­i­can. That has raised eye­brows over the years when emerg­ing economies seek to have more of a say in in­ter­na­tional fi­nan­cial in­sti­tu­tions.

“My sense is very much that the man­ag­ing di­rec­tor at the IMF must be cho­sen based on com­pe­tence, on ex­pe­ri­ence and on the broad set of qual­i­ties and at­tributes that per­son brings to the table,” Sheets said, prais­ing the cur­rent man­ag­ing di­rec­tor Chris­tine La­garde, a French­woman, as be­ing “ex­cep­tion­ally ef­fec­tive in that po­si­tion”.

After a five-year delay and a harsh warn­ing from La­garde, the US Congress ap­proved the IMF 2010 quota and gov­er­nance re­forms last De­cem­ber. The re­forms dou­bled the IMF’s per­ma­nent re­sources and gave greater voice to emerg­ing mar­kets and other un­der­rep­re­sented coun­tries. The re­forms pre­served US vot­ing share.

“The 2010 re­forms made im­por­tant progress, but we are not fin­ished re­form­ing the fund,” Sheets said, adding that the US is work­ing to fur­ther mod­ern­ize the IMF’s sys­tem of gov­er­nance and im­prove its ca­pac­ity to deal with evolv­ing chal­lenges.

He said that as emerg­ing economies grow, they de­sire and de­serve a greater stake in the in­sti­tu­tions at the cen­ter of the global econ­omy.

“We believe that fur­ther en­hanc­ing the voice of emerg­ing mar­kets at the IMF is nec­es­sary to pre­serve the le­git­i­macy and ef­fec­tive­ness of the in­sti­tu­tion,” Sheets said.

“Emerg­ing mar­kets com­prise an in­creas­ing share of the global econ­omy, and we should in­cen­tivize them to em­brace greater re­spon­si­bil­ity to con­trib­ute to global eco­nomic pros­per­ity through co­op­er­a­tive poli­cies,” he said.

Sheets dis­missed the no­tion that the US saw in­sti­tu­tions such as the China-led Asian In­fra­struc­ture In­vest­ment Bank (AIIB) as a threat to US in­flu­ence in the in­ter­na­tional fi­nan­cial sys­tem.

“But we have been clear that the US stands ready to wel­come new in­sti­tu­tions into the in­ter­na­tional ar­chi­tec­ture, pro­vided that they share the in­ter­na­tional com­mu­nity’s strong com­mit­ment to sound gov­er­nance prin­ci­ples and high so­cial and en­vi­ron­men­tal stan­dards,” he said.

Nathan Sheets, US un­der­sec­re­tary of trea­sury for in­ter­na­tional af­fairs

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