Oxfam calls on new IMF chief to set the tone on urgent reform

Washington DC: As Frenchman Dominique Strauss-Kahn takes up his position at the head of the IMF, development and aid agency Oxfam International called on him to implement much needed and long overdue institutional reforms. Oxfam called on the new managing director to show early support for governance reform in a manner that would genuinely allow all developing countries a fair voice in the institution.

October 31st, 2007 -Washington DC: As Frenchman Dominique Strauss-Kahn takes up his position at the head of the IMF, development and aid agency Oxfam International called on him to implement much needed and long overdue institutional reforms.

Mr. Strauss-Kahn will take over tomorrow from Spaniard Rodrigo de Rato who joined the institution in May 2004.

“Mr Strauss-Kahn has been campaigning as the candidate for change, as the one able to deliver true reforms. Very soon, he will be judged on whether he has been able to bring about real changes. There is no doubt that the IMF needs serious institutional changes. Nowadays, the Netherlands has more votes than 23 African nations grouped together,” said Jeremy Hobbs, Executive Director of Oxfam International.

Oxfam called on the new managing director to show early support for governance reform in a manner that would genuinely allow all developing countries a fair voice in the institution. This would entail, at the minimum, moving to a double-majority voting system on all votes.

“What’s on the table at the moment goes nowhere near far enough. It’s clear that the Europeans must give up more of their voting power. The United States must support a stronger voice and vote for the poorest countries, not just large emerging economies. The Fund does more work in Africa than anywhere else, yet the whole continent has just two seats on the board – you can’t get a much clearer case of a democracy deficit,” added Hobbs.

The agency also said that the IMF should exit macro-economically stable low income countries, providing only surveillance and advice when needed, and to radically reform the way it works in other countries.

“The new managing director should ensure that in countries where the institution can still play a valid role, the Fund shakes up the way it works. It needs to show much more awareness of the different circumstances in different countries. And it must understand that poor countries in Africa need to spend more money on their social sectors like health and education. This kind of investment today is essential for growth tomorrow,” Hobbs continued.

Oxfam International called on Mr Strauss Kahn to stir the executive board to work with poorer members on their capability to absorb increased aid flows. This is needed to send a clear signal to donors that they must increase the quantity and quality of their aid as a matter of urgency, Oxfam said.