The appointment of Dominique Strauss-Kahn as head of the global lending body came amid long-standing complaints that Western European states are over-represented in the institution. Belgium and the Netherlands, for example, both receive a higher share of IMF quotas (which determine a member country's lending rights) than China, which has a much larger economy.
Strauss-Kahn has promised to build upon existing reform efforts. "We should go much further and aim to agree swiftly on significant further increases for those countries whose dynamism and growing role in the world economy is not appropriately reflected in the quota distribution, while ensuring that all categories of countries are given sufficient voice", he said in a statement preceding his nomination.
At the moment, French citizens in particular have a strong hold on top international posts: Jean-Claude Trichet is President of the European Central Bank (ECB), Pascal Lamy is Director-General of the World Trade Organisation (WTO), and Jean Lemierre leads the European Bank for Reconstruction and Development (EBRD).
Changes to the quota system were promised as early as 2000 by former (French) IMF chief Michel Camdessus and started in earnest in 2005 by Rodrigo Rato, a Spaniard who resigned from the post for personal reasons.
But Rato's efforts encountered resistance from Western European and developing states alike (EurActiv 31/08/07), producing only marginal changes (EurActiv 20/09/07).
In August, Russia put forward its own candidate to head the IMF, in a move interpreted as a gesture of defiance to Western European control over top jobs at international institutions (EurActiv 22/08/07).
Alexei Kudrin, Russia's finance minister, reacted with scepticism to Strauss-Kahn's promise of reforms. "The world of finance believes in actions, not words", Kudrin said. And if reform efforts are unsuccessful, "we will have to forget about the IMF as a serious global institution regulating international finance", he added.
In addition to the unfair distribution of quotas, financing troubles are also undermining the legitimacy of the IMF as developing countries are increasingly avoiding the organisation and turning to international financial markets for more attractive loans.
China and India in particular are amassing increasing sums of foreign capital and thus shedding their historical dependency on IMF loans.
