MercoPress. South Atlantic News Agency

IMF is no longer “policeman” says Strauss-Khan

“We need an independent body” stated Strauss-Kahn

“The IMF can no longer play the role of policeman” admitted incoming International Monetary Fund Managing Director Dominique Strauss-Kahn who added that the global economy is drastically different from when the IMF was created, and therefore “must adapt to change”.

Speaking to the Paris newspaper Le Monde the former French Finance minister who was confirmed in the job last Friday visited early Monday President Nicolas Sarkozy. Strauss-Khan as his predecessor Rodrigo Rato said his target was reforming the IMF to better reflect the growing power of the developing countries and interests of the world's poorest countries. "The IMF can no longer play the role of the policeman that lends to countries undergoing difficulties imposing in exchange very hard rules", said French Socialist Strauss-Khan to Le Monde. "IMF faces a more complex world, as the current mortgage crisis which begun in the United States is showing us", he emphasized. Trying to push aside the idea that he was handpicked for the job, Strauss-Khan said he had traveled 100.000 kilometers in the last few months to lobby for support from as many countries as possible, both rich and poor ones. "I could have spent the summer on holidays and just have waited for the job because I'm European. But what I really wanted to achieve is convince leaders about a reform project", he said. The incoming IMF chief said that as financing sources for the fund contract, he favored selling part of the gold reserves held by IMF to generate more resources. "Most central bankers I talked with are not hostile to the idea. But such a reform needs of a wide consensus, he admitted. "The world geo-political balance has changed. Emerging economies such as China, India, Brazil, South Africa and Mexico want more influence. And they are right in doing so", Strauss-Khan underlined. However in spite the IMF needs to adapt to become more legitimate, any reform of its voting structure will not diminish the weight of United States, pointed out Strauss-Khan. He said that Europe and Russia might have to see their own weight in the IMF cut back in the event of a reform to the quota system. "Nobody can expect that the percentage ... we have to win to distribute to other countries can come from the United States," he said. Meantime from Germany president Horst Kohler called on the IMF to play a leading role in controlling world financial markets. "We need an independent body, competent that beyond country national borders is empowered to assume the responsibility of keeping control of international financial markets", said Kohler addressing a forum on globalization in Berlin. Kohler, who was IMF managing director between 2000 and 2004, called on multilateral organizations to cooperate and act closely helping to contain financial challenges such as the US current sub prime mortgages situation and global credit crunch or re-pricing. He said financial organizations, the International Labor Organization, World Trade Organization should "develop a world model of cooperation" possibly under orders from UN Secretary General Ban Ki Moon. The German president also acknowledged that "it's time developing countries and emerging nations have greater say and rights in the decision making process of multilateral organizations such as the IMF and World Bank.