On the highest-profile issues of financial regulation, fiscal stimulus and monetary policy, there was little progress. But on the International Monetary Fund, the American side engineered a breakthrough — not just in terms of how much money the fund can lend to countries, but also in terms of rebuilding its legitimacy and making it more effective as the world’s only global crisis-fighting organization.
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The managing director of the I.M.F. is very powerful, with a great deal of authority and discretion, and has always been a European — in effect, appointed by European governments to represent their interests. The G-20 made it clear that this will stop — the communiqué says the selection process will be open, transparent and competitive. But really this is code for saying they will pick someone from an emerging-market country, such as India or Brazil (and there are some excellent candidates). The right person in this job could have a huge positive effect on the I.M.F.’s legitimacy.
To make things matters more interesting, the I.M.F.’s managing director is expected by insiders to resign within a year, to resume his (promising) pursuit of the French presidency. The leadership race for the next managing director effectively starts today; the stakes are high, and competition will be intense.
How did the Obama administration pull this off? In a brilliant move, they took the lead by volunteering to open up the selection process for the World Bank, the I.M.F.’s sister organization, which has always been run by an American. The next president of the World Bank is very likely to be Chinese.
Read the full article at: http://economix.blogs.nytimes.com/2009/04/03/why-the-g-20-was-a-success-obamas-initiative/