Turkey’s Dervi? one of the strongest candidates for top job at IMF

TODAY’S ZAMAN
ANKARA

Kemal Dervi?
The high-profile scandal at the top of the International Monetary Fund (IMF) has left the position wide open for other strong candidates. According to analyses made by top news agencies around the world, Kemal Dervi?’s name emerges as one of the leading candidates for the position should the currently beleaguered Dominique Strauss-Kahn step down.
Traditionally World Bank presidents are of US origin while the IMF chiefs are from Europe since these sister institutions were established after World War II. While the arrest of IMF chief Strauss-Kahn on sexual assault charges added to existing uncertainty about the pressing financial issues around the globe such as eurozone debt crisis, the debate over who would take the top position at IMF is heating up with each passing day.
The fact that the IMF’s second-in-command, John Lipsky, who was named acting managing director, has said he will step down in August when his term ends, made heads turn elsewhere, opening the door for other eligible candidates.
Reuters has reported that Dervi?, a former Turkish finance minister and head of the United Nations Development Program (UNDP), is seen as a leading candidate for the IMF post if it goes to somebody not of European origin. The same report names Christine Lagarde of France, Trevor Manuel of South Africa, Agustin Carstens of Mexico and Montek Singh Ahluwlia of India as other leading candidates to take office at the helm of the fund.

The Associated Press also favors Dervi? as a leading candidate. An AP report released on Tuesday states that among those mentioned as possible successors to Strauss-Kahn are Dervi? and Mohammad El-Erian, an Egyptian who heads the giant Pimco bond fund. El-Erian is also a former IMF staffer.

Dervi? is often credited with bringing Turkey back from the brink of economic collapse after a disastrous 2001 financial crisis, by pushing through tough reforms and helping secure a multibillion dollar IMF bailout. He left Turkey to join the World Bank in 1978, becoming vice president of the institution in 1996. He returned home to much fanfare in 2001 as economy minister when Ankara faced failing banks, soaring inflation and a massive currency devaluation.

In 2005, Dervi? was unanimously confirmed as the administrator of the UNDP at the UN General Assembly, representing 191 countries. In 2009 he decided not to seek a second term in order to eventually accept a position at the Brookings Institution, a Washington-based think thank where he is currently the vice president and director of the Global Economy and Development program.

Mixed reaction from politicians at home

There is mixed reaction in Turkey from political parties who are mainly busy with the upcoming general election campaigns. “The situation is uncertain at the moment as Mr. Strauss-Kahn has not resigned yet. He remains innocent until proven guilty. We are following the situation and we would develop a strategy about the issue only after the air is cleared,” said Bülent Gedikli, a Justice and Development Party (AK Party) deputy to Today’s Zaman.

Also commenting on the possible candidacy of Dervi?, Faik Öztrak, a Republican People’s Party (CHP) deputy and economic adviser for the party, noted that it is too early to make a prediction since the incident is still fresh. “The name of Dervi? has just emerged and it is specifically the government’s job to offer support if a Turkish citizen’s name is uttered as a candidate for one of the most prestigious jobs worldwide. The main task falls on the shoulders of the ministers and bureaucrats as they have a vote at the institution. This would not only lift people’s spirits at home but also would add to our reputation as a nation. As the CHP we would be very happy to see one of our former members sit at the top of the IMF,” Öztrak said.

Speaking to a news channel on the issue, Minister of Finance Mehmet ?im?ek said on Tuesday that it would be “great but only natural” for a Turk to claim the top job at the IMF. Drawing the attention to Turkey’s increasing economic and political role on the global stage, ?im?ek said that now Turkey has more say at the IMF as its number of votes has increased. ?im?ek’s name was also put forward on different platforms as a possible candidate from Turkey.

According to AP the IMF crisis opened the door to emerging nations. The empty seat for the top job at the IMF would likely cause a confrontation between Europe and emerging countries who want to have more say in world affairs among the traditional big powers. In the aftermath of the crisis German Chancellor Angela Merkel voiced her opinion that she would like to see another European for the job. For her, it would make sense for Europe to keep the top job at the IMF for now given its role in tackling the eurozone crisis, though the post may go to the developing world in the future. It is uncertain at this point how the developing countries will react to such remarks, as well as whether Dervi? satisfactorily meets Merkel’s criteria of being European. Reuters notes that Turkey’s status as a large emerging market within the European continent could ease the widespread concerns of developing nations who feel shut out of the IMF selection process because of Europe’s claim to the top job. According to the IMF, the IMF’s Executive Board, a 24-person governance body whose members are appointed by the Board of Governors which comprises 187 member countries’ ministries of finance, is responsible for selecting the managing director. Any executive director may submit a nomination for the position, consistent with past practices. When more than one candidate is nominated, as has been the case in recent years, the Executive Board aims to reach a decision by consensus. The IMF uses a weighted voting system that gives economically larger member states more votes.

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