IMF and World Bank: Appointment Procedures

Lord Stern of Brentford Excerpts

Wednesday 1st December 2010 Lords Chamber

Asked by

[Lord Stern of Brentford]

To ask Her Majesty’s Government what assessment they have made of the appointment procedures for the heads of the International Monetary Fund and the World Bank.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, G20 leaders are committed to open, transparent and merit-based selection processes for the heads and senior leadership of all international financial institutions. The UK supports this commitment as part of a broader package of reforms to increase the institutions’ effectiveness and legitimacy. Further consideration is being given to the processes for search, selection and appointment of heads at the IMF and the World Bank.

[Lord Stern of Brentford]

I thank the Minister for his Answer and I declare an interest as a former chief economist and senior vice-president of the World Bank.

Does the Minister agree with the assessment that the system of reservation—because that is what it is—of headships of the IMF and the World Bank for Europe and the United States respectively is outdated, unacceptable in the modern world and deeply resented by the Governments and people of developing countries? Does he also agree that past declarations of the importance of open competitions have not prevented the UK Government from participating in the continuation of these stitch-ups? Does he therefore agree that, to make the openness clear, the UK should support non-European and non-US candidates for these positions? There are many outstanding candidates. I am happy to provide him with a list. If the IMF position becomes available first, Europe must take the lead, as a matter of principle, whether or not the US tries to keep its monopoly at the World Bank.

[Lord Sassoon]

My Lords, I pay tribute to the noble Lord for the distinguished part that he played as chief economist at the World Bank and I therefore listen very carefully to what he has to say. I can confirm that this longstanding, informal agreement whereby the managing director of the IMF was always a European and the World Bank was always to be headed by a US citizen is well past its sell-by date. As I said, we support open and transparent appointments based on merit and in that context, while it is right and appropriate that good candidates from wherever should come forward, the UK’s position is emphatically that appointments should be made regardless of nationality or, indeed, of gender.