Opinion

Mohamed El-Erian

from The Great Debate:

How Lagarde should be appointed at the IMF

Mohamed El-Erian
May 20, 2011 15:06 UTC

By Mohamed El-Erian
The opinions expressed are his own.

Eager to retain a historical but outmoded entitlement, European politicians seem to be coalescing around Christine Lagarde to replace Dominique Strauss-Kahn as Managing Director of the IMF. Lagarde has the qualifications to successfully lead a multilateral institution that is central to the well being of the global economy. Her ability to do so, however, may critically depend on how she is appointed.

Lagarde has considerable skills and expertise; she has gained important experience in both the private and public sectors; and, judging from her stint as France’s Minister of Finance, she has navigated well the corridors of political power at the national and European levels.

Lagarde would be the first woman to lead a Bretton Woods institution. Such an overdue appointment would send an important message to an IMF demoralized by disturbing allegations of sexual assault by Strauss-Kahn. It would also come at a time when delicate questions are being raised as to whether the institution has historically been tolerant of inappropriate behavior.

Yet Lagarde's appointment would be controversial, not because of her qualifications but because of the circumstances. Regrettably, her name has emerged in the context of a vocal desire by European politicians to extend a feudalistic tradition that is both outmoded and harmful -- that of having one of their nationals, and only their nationals, at the helm of the IMF.

This tradition is rightly opposed around the world. After all, merit rather than nationality should be the guiding principle for a critical multilateral post. And there are many non-Europeans that deserve very serious consideration, be they Africans, Asians, Latin Americans or North Americans.

from The Great Debate:

Strauss-Kahn allegations are consequential for the global economy

Mohamed El-Erian
May 16, 2011 15:49 UTC

By Mohamed A. El-Erian
The opinions expressed are his own.

This weekend's detention of the IMF's chief on allegations of sexual assault has implications that go well beyond the impact on Dominique Strauss-Kahn's (or, as he is commonly known, DSK) international prestige. They could also impact the IMF, France, market uncertainty and the well-being of the global economy.

We must wait to make a full assessment until we know the outcome of ongoing police investigations into allegations that, according to his lawyer, DSK intends to “contest vigorously.” Having said that, some commentators are already taking the view that the IMF could lose its managing director, and that France could lose a leading candidate for next year's presidential elections.

Should he be forced to step down, DSK would be the third successive head of the IMF to leave suddenly. Once again, this would catch the institution with a selection process for the top position that is still overly dominated by politics, horse-trading between Europe and the US and other outmoded characteristics.

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