Developing economies key players in global system, IMFC head says

Oct 7, 2008, 20:44 GMT

Cairo - Egyptian Finance Minister Youssef Boutros Ghali on Tuesday said that choosing him to head the International Monetary Fund's top decision-making body reflects developing countries' increasing involvement in the global economy.

Ghali's pick, announced by the IMF late Monday, marked the first time a minister from an emerging market or developing country had been chosen to chair the International Monetary and Financial Committee (IMFC).

'It also confirms that the global economy cannot take a decision without consulting developing economies, which have become key players now,' Ghali told the Dubai-based al-Arabiya news channel.

His appointment represents a historic turning point for developing countries who have fought hard for more influence in the IMF, where top positions are typically reserved for Europeans.

'There should be a permanent envoy to represent the emerging markets in all international finance organizations,' said Ghali, who succeeds former Italian finance minister Tommaso Padoa-Schioppa, who resigned in May 2008.

Ghali, whose term will be up to three years, had beaten Indian Finance Minister Palaniappan Chidambaram for the job.

Ghali will head the IMFC, which sets the IMF's political direction and overall policy priorities, at its annual meeting in Washington on October 11.

The meeting will focus on world economic developments, including the global response to the worst financial crises since the 1930s.

'The most important challenge ahead of us is to put a programme that allows financial organizations to interfere in order to rebalance the global economy,' said Ghali.

He described the crisis as a 'sickness that appeared in the US, and the European Union has caught the virus.'

Ghali suggested emerging economies could help industrial nations shore up their finances, and said his job was to bring the two sides together.

'The developing economies now have the money that can help advanced countries,' he said.

Ghali, the nephew of former UN secretary general Boutros Boutros Ghali, had worked at the IMF during the Mexico debt crisis before resigning in 1986.

Before becoming Egypt's minister of finance in July 2004, Ghali held a range of ministerial positions in the areas of international cooperation, economic affairs, and foreign trade since 1993.