Bloomberg
May 17, 2011
It couldn’t have come at a worse moment. A bailout of Portugal was being completed. Greece was tottering on the edge of a default. And where was the managing director of the International Monetary Fund, the man meant to be guiding the world economy through this chaos?
Dominique Strauss-Kahn was in a cell in New York’s Rikers Island jail, awaiting his next court hearing on charges of sexually assaulting and attempting to rape a hotel housekeeper.
The trial of Strauss-Kahn will finish his career and transform the race for the French presidency, for which he was the leading candidate in next year’s election. It may well determine the fate of Europe’s single currency. There is no guarantee that the next head of the IMF will support the euro with the same determination that Strauss-Kahn did.
Yet the most significant consequence of the scandal will be the effect it has on the IMF itself. It has become painfully obvious that giving the top job to a French, German or even British politician who happens to have some spare time on his hands is no longer good enough.
The IMF plays the most important role in the world economy right now. In the next decade, we will see multiple sovereign- debt crises stemming from the extravagance of the last decade. We may also witness the emergence of a new currency system. The IMF is the only body that can provide leadership on both fronts and that will require someone with different qualifications and ambitions. For this reason, it should select internal candidates and groom a new generation of leaders from within its own ranks.
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