When the former-head of the International Monetary Fund, Dominque Strauss-Kahn, was arrested in New York on sexual-assault charges and subsequently resigned his post, it sparked a debate about which nations should control the world’s most powerful financial institutions. While the I.M.F. and World bank have typically been a European and American responsibility, respectively, the global economic crisis has developing nations, China among them, criticizing the West for its irresponsible behavior. Many are now calling for a change in leadership at the highest levels, signalling yet again the rising power of developing nations.
What’s the Big Idea?
China has not made a move to lead the I.M.F. post-Strauss-Kahn and it seems the position may be given to another French national, Christine Lagarde, the country’s current finance minister. China’s financial market is still in early stages so the leadership necessary to lead the I.M.F. is seen as lacking, both inside China and out. “‘No matter how big our banks are or how much reserves we have, the truth is that China’s financial sector is not entirely open and does not operate according to market rules only,’ says Wu Xiaoqiu, finance and securities researcher with China People’s University.”