WASHINGTON (AFP) — The International Monetary Fund appointed Dominique Strauss-Kahn its new chief Friday as the battered institution seeks to redefine itself in the face of increasing skepticism globally.
The IMF executive board said it had chosen "by consensus" the French Socialist former finance minister as managing director for a five-year term, starting November 1, to succeed Rodrigo Rato of Spain.
"I am determined to pursue without delay the reforms needed for the IMF to make financial stability, serve the international community, while fostering growth and employment," Strauss-Kahn said in a statement after the announcement.
Strauss-Kahn, 58, had been widely expected to get the job after he gathered support from Europe and the United States, the powers that still dominate the IMF.
The Bretton Woods institution, created in 1944, is seeking to redefine its role in a globalizing world reshaped by the rising economic clout of developing countries like China, India and Brazil.
Strauss-Kahn has pledged to be a "consensus-builder" at the 185-nation financial institution, which bails out countries in crisis but faces its own crisis of relevancy and legitimacy in a world flush with cash and access to capital.
The European Union candidate said his election by the 24-member board of executive directors was "a joy, honor and responsibility."
His sole rival for the job had been Josef Tosovsky, a former Czech central bank chief proposed last month by Russia. Tosovsky's own country had not backed him.
After his nomination in July, Strauss-Kahn traveled the globe visiting a host of countries, many of them emerging or middle-income economies, in search of support.
On Thursday, Brazil -- Latin America's regional powerhouse -- along with Argentina and Chile officially backed Strauss-Kahn, who was first proposed by French President Nicolas Sarkozy.
Rato's abrupt announcement in late June that he was quitting cast a cloud over the broad reform program he spearheaded, which made little progress.
Among the challenges Strauss-Kahn inherits is the IMF's dearth of borrowers -- this after the institution aided a number of countries in crisis during the 1990s such as Indonesia, South Korea, Russia, Brazil, Argentina and Mexico.
Nearly all those countries have repaid their debt as their economies strengthened, strapping the IMF which partly depends on the interest paid on loans to finance operations.
Another key issue is the IMF's relevancy, which is questioned by many countries because member voting rights and the board's structure of representation do not reflect the strength of the new economic powers.
That issue is at the heart of the debate over the unwritten tradition that leading European powers pick the head of the IMF and the United States chooses the president of the World Bank.
Strauss-Kahn awaited the IMF announcement in Santiago, Chile, on what he called a "good symbol" visit to underscore his pledge to give more voice to emerging countries if elected.
He has scheduled a news conference in Paris on Monday.
In a board interview at IMF headquarters in Washington last week, Strauss-Kahn acknowledged the Fund's dire need of reform.
"It will be a hard task for all of us to rebuild both the relevance and the legitimacy of this organization. But I am prepared to do that and I ask you to be prepared as well," he said.
Rato welcomed the board's decision, saying Strauss-Kahn "possesses the experience, vision and dedication to public service needed to successfully lead the IMF at this important juncture."
The outgoing managing director, who said he will step down on October 31, also praised the board's "transparent and competitive process" in selecting his successor.
World Bank president Robert Zoellick, a former US trade chief who took office in July, said Strauss-Kahn was "a respected leader and economist."
"I am very pleased Dominique is interested in enhancing the close cooperation between our two institutions," Zoellick said.
In France, Sarkozy said Strauss-Kahn's selection was "a great victory for French diplomacy."
The change in IMF leadership will follow the October 20-22 annual meetings of the IMF and the World Bank in Washington.
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