Russia Challenges West With Nomination to IMF

By Peter Finn
Washington Post Foreign Service
Thursday, August 23, 2007

MOSCOW, Aug. 22 -- Russia said Wednesday that it has nominated a former Czech prime minister to head the International Monetary Fund, challenging the European Union's traditional prerogative to fill the post.

The Russian Finance Ministry said in a statement that it was proposing Josef Tosovsky, chairman of the Financial Stability Institute at the Bank for International Settlements in Basel, Switzerland, to head the 185-nation organization.

The E.U. has put forward former French finance minister Dominique Strauss-Kahn, who, until Tosovsky was nominated, was the sole official candidate for the job of managing director.

The Washington-based IMF provides loans and economic advice to member countries. Critics have accused it of exacerbating economic crises in debt-plagued countries through some of the policies it advocates.

"We believe that Mr. Tosovsky would be the right person at the right place at the right time," the Russian ministry said in a statement posted on its Web site Wednesday. "Increasing globalization of the world economy and the changing configuration of the international finance system makes it vital the operations of the Fund undergo substantial reforms."

The Czech Republic, which is an E.U. member, quickly rejected the initiative and said it would continue to back the E.U.'s choice. "Mr. Tosovsky was not and is not the Czech Republic's candidate," Czech Prime Minister Mirek Topolanek said at a news conference in Prague.

Despite an ostensibly open competition, the head of the IMF is effectively chosen by the E.U., which in turn backs an American to head the World Bank. Together, the United States and the E.U. countries have enough votes to push through their respective choices at each institution.

Emerging economic powers such as China, India and Brazil, as well as many developing countries, bristle at this arrangement, which they say is too cozy and closed.

Russia -- which is adopting an increasingly muscular position in world affairs and now sees itself as a counterweight to Western, and in particular American, dominance -- has been expressing its discontent with the E.U.-U.S. lock on leadership of the two institutions. In June, Russian President Vladimir Putin described these and other international financial institutions, which were created after World War II, as "archaic, undemocratic and inflexible."

Tosovsky, who headed the Czech National Bank from 1993 to 2000 except for a period in 1997-98, when he served as a caretaker prime minister, said in a statement that he was honored by the nomination.

Tosovsky, 56, was accused this year by a Czech newspaper of collaborating with the secret police during communist times. He rejected the allegation, saying he had only reviewed economic data for the authorities and did not pass on any information.

Russian Finance Minister Alexei Kudrin said that he had consulted with Brazil, China and India and that they support competition for the IMF post. But it was unclear whether the three countries specifically endorsed Tosovsky.

Strauss-Kahn was in China on Wednesday and thanked the country's premier "for the vigorous support China has decided to bring to my candidacy."

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