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IMF chief Rato to quit early, citing personal reasons
By Veronica Smith
AFP
WASHINGTON
Petroleumworld.com 06 29 07IMF chief Rodrigo Rato said Thursday he will leave his job ahead of schedule in October, citing personal reasons, as the global body struggles with an internal reform effort he launched.
The announcement comes as the six-decade-old 185-nation IMF faces criticism that it serves the interests of wealthy nations by trying to impose free-market practices.
It also follows this week's change of leadership at the IMF's scandal-tainted sister institution, the World Bank.
Rato informed the IMF executive board that he will not be able to serve the full length of his five-year term as managing director, the Washington-based multilateral institution said.
He "intends to leave the Fund in October following the conclusion of the 2007 annual meetings of the boards of Governors of the IMF and World Bank Group," the IMF said in a statement.
The statement quoted Rato's explanation of his decision to the board:
"I have taken this decision for personal reasons. My family circumstances and responsibilities, particularly with regard to the education of my children, are the reason for relinquishing earlier than expected my responsibilities at the Fund," Rato said.
The 58-year-old Rato, separated and the father of three children, is a former Spanish finance minister credited with that country's economic "miracle."
He succeeded Horst Koehler of Germany in June 2004 for a five-year term after Koehler resigned to stand for the German presidency.
The IMF post traditionally goes to a European and the presidency of the World Bank is reserved for an American under an unwritten agreement forged at the creation of the institutions after World War II.
The IMF is struggling to maintain its role as the stabilizer of the international monetary system after being shunned by many of the countries it had previously helped financially.
Rato is stepping down in the midst of a massive IMF reform program he launched. It also comes as the Fund faces a growing budget deficit due to a steep decline in lending, forecast to swell to 224 million dollars in the fiscal year 2008 to April 30.
A revision of the quota formula, which determines the balance of power in the institution, is lumbering, and financial reform has made little progress, while board consideration of a gold reserves sale has just been delayed by one month.
The modernization of one of the Fund's most sensitive mandates, foreign-exchange surveillance, was announced last week and drew sharp criticism from China. The Asian powerhouse is at loggerheads with the United States over its yuan currency, which US lawmakers allege is kept undervalued to obtain an unfair trade advantage.
US Treasury Secretary Henry Paulson praised Rato's "vision and dedication" at the IMF and his creation of "this road map for reform, which will enable the Fund to remain a strong, relevant institution and resource for the global financial system."
"His leadership was also instrumental in the Funds revision of its exchange rate surveillance framework, which is a highly critical piece of the road map," he said.
Rato called on his colleagues to focus their attention in the coming months on subjects related to the Fund's finances.
"I hope that my departure could provide an incentive for all of us to work together constructively and effectively with the membership over the next few months to try and accelerate the timetable in these areas and ensure that we make significant progress by the time of the annual meetings," he said.
In Berlin, the German finance minister, Peer Steinbruck, praised the IMF chief's "excellent work" in a statement but said, "At present, the enormous task that remains for us to accomplish in reforming the IMF will certainly not be helped" by his resignation.
The IMF's sister institution, the World Bank, meanwhile, is trying to turn a page on a favoritism scandal that erupted in May and cost it credibility around the world.
On Monday the World Bank executive board approved the nomination of Robert Zoellick, a former US cabinet member, as president, effective Sunday.
Zoellick succeeds Paul Wolfowitz, who was forced to resign after breaking rules in arranging a lavish pay-and-promotion package for his female companion, a bank employee.
AFP 28 1934 GMT 06 07
Copyright© 2007 AFP. All Rights Reserved.
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