{
  "title": "Transcript of a Press Conference by Dominique Strauss-Kahn, Managing Director-designate of the International Monetary Fund, with Masood Ahmed, Director, External Relations Department, and Saleh Nsouli, Director, IMF Office in Europe",
  "publication": "IMF News, October 3, 2007",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/54/tr071001",
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  "summary": "Dominique Strauss-Kahn was appointed Managing Director-designate of the IMF by consensus of the Executive Board following an open and competitive process.",
  "publishDate": "2007-10-03",
  "sections": [
    {
      "heading": "Appointment and immediate context",
      "content": "- Dominique Strauss-Kahn was appointed Managing Director-designate of the IMF by consensus of the Executive Board following an open and competitive process.\n- Nomination details:\n  - Term length: five years, beginning on November 1, 2007.\n  - Campaign travel: traveled more than 60,000 miles meeting leaders of major member countries.\n- Transitional remarks:\n  - Executive Board, Management, and staff intend to ensure a smooth transition until arrival in Washington.\n  - Strauss-Kahn emphasized the need for relevance and legitimacy of the Fund in a changing global economy."
    },
    {
      "heading": "Reform objectives and approach",
      "content": "- Overarching reform goals:\n  - Make the Fund both relevant (adapt policies to today's problems) and legitimate (reflect new balance of power).\n  - Reformulate Fund policies to promote growth, the highest levels of employment, development of trade, and financial stability (citing Article I of the Articles of Agreement).\n- Process and timetable:\n  - Strauss-Kahn sketched reforms but declined to define detailed plans unilaterally.\n  - He intends to develop detailed reforms in consultation with staff, Management, and the Executive Board.\n  - He deferred specific timing, noting ongoing negotiations on quotas by Rodrigo de Rato and the importance of outcomes before the Annual Meetings in late October.\n  - Formal policy positions to be stated after taking office on November 1, 2007.\n- Strategic emphasis:\n  - Shift emphasis rather than seek a radical break; adapt the Fund to contemporary financial crises (e.g., subprime-related turmoil) and the broader scope of global financial challenges.\n  - Prioritize surveillance, advice, crisis avoidance, and ensuring robust growth and employment."
    },
    {
      "heading": "Quotas, representation, and legitimacy",
      "content": "- Key framing:\n  - Quota reform is essential to legitimacy because emerging economies (Brazil, India, China, South Africa, Mexico, others) must have more voice and representation.\n  - Strauss-Kahn described quota allocation as effectively a zero-sum game (shares must sum to 100 percent).\n- Specific numeric references and examples:\n  - Brazil's current quota: 1.4 percent.\n  - Possible incremental increases mentioned illustratively: 0.2, 0.3, 0.4 percent (as examples of what Brazil's quota \"could and should increase\" by).\n  - Even after increases to \"1.6, 1.7, or 1.8 percent\" Brazil would still be under-represented relative to its global weight.\n  - Strauss-Kahn observed that most quota formulas yield an increase for the United States rather than a decrease; the United States has indicated it does not want to increase and would accept reverting to pre-Singapore shares.\n- Political feasibility:\n  - Some countries (notably certain European countries and Russia) will need to accept transferring part of their quota to emerging economies to achieve rebalancing.\n  - Strauss-Kahn saw it as a central task (with staff and Board) to secure agreement among these countries; he emphasized that no solution exists without such transfers."
    },
    {
      "heading": "Financing, income model, and institutional efficiency",
      "content": "- Revenue challenge:\n  - Current IMF income derives largely from the spread on lending; as lending decreases, Fund income falls.\n  - Need for a \"permanent and steady-state financing system\" has been examined (reference to the Crockett Report directed by Sir Andrew Crockett).\n- Possible revenue and cost measures discussed:\n  - Options include using gold reserves, altering revenue from Fund assets, and limiting or decreasing expense growth.\n  - Strauss-Kahn stated: \"95 percent of what is written in the Crockett Report is not a problem for me,\" while noting a slight difference on one specific point.\n  - He indicated gold sales are possible but not sufficient alone.\n  - Institutional downsizing and refocusing on core functions were raised as legitimate options; internal management has already launched measures toward expense control.\n- Operational location and staffing:\n  - Moving out of Washington or reducing headcount were mentioned as possible elements of cost-efficiency, but Strauss-Kahn advised a detailed, case-by-case approach rather than blanket percentage cuts."
    },
    {
      "heading": "Regional priorities and relationships with member regions",
      "content": "- Latin America:\n  - Acknowledged widespread mistrust of the IMF in Latin America rooted in past program designs (including Argentina).\n  - Noted widespread support from Latin American representatives for his candidacy, reflecting hope for different Fund policies.\n  - Emphasized adapting Fund policies to help people and avoid \"unbearable remedies.\"\n- Africa:\n  - Noted African growth around 5 percent (described in question framing) and acknowledged uneven distribution of gains across countries.\n  - Argued against a \"one-size-fits-all\" approach; called for policies tailored to historical, cultural, demographic, and political contexts.\n  - Called for greater diversity among Fund staff to improve understanding and representation of African countries.\n- Asia and China:\n  - Observed emerging countries will likely drive world growth and stressed their greater role in decision-making.\n  - On the renminbi (yuan): said valuation is a topic for multilateral discussion; cautioned against bilateral acrimony between the United States and China and advocated multilateral debate and solutions."
    },
    {
      "heading": "Global outlook and threats",
      "content": "- Growth outlook:\n  - Strauss-Kahn judged world growth foundations \"currently solid\" due to accumulated profits and structural adjustments.\n  - He expected emerging countries to drive growth and anticipated that by end-2008 the world growth rate \"will still be very respectable.\"\n- Risks and recent financial tensions:\n  - Noted the summer's crisis originating with subprime mortgages and its transmission into the banking sector, citing Northern Rock in the UK as an example.\n  - Stated central banks have taken actions and the situation appeared \"under control,\" while acknowledging uncertainty about short-term developments.\n- Institutional role:\n  - Emphasized the Fund's preventative role—success in crisis avoidance can render its contributions invisible—and the need to ensure adequate resources and credibility for surveillance and crisis prevention."
    },
    {
      "heading": "Coordination with other multilateral institutions",
      "content": "- Boundaries and cooperation:\n  - Acknowledged overlaps with the World Bank, UNDP, and WTO but argued overlaps are manageable and coordination is desirable.\n  - Identified complementary mandates: World Bank focuses on project financing and long-term structural issues; IMF focuses on macroeconomic balance, fiscal and foreign exchange issues.\n  - Expressed intent to work closely with counterparts (e.g., World Bank, UNDP, WTO) rather than seeking hegemony.\n- Outreach priorities:\n  - Three stated priorities for outreach: cross 19th Street (to the World Bank), cross the equator (to Latin America), and cross the Pacific (to Asian countries)."
    },
    {
      "heading": "Governance, values, and personal stance",
      "content": "- Political background:\n  - Strauss-Kahn identified himself as a Socialist but stressed that this has no adverse implication for IMF leadership; described himself as a \"free-market socialist.\"\n- Social justice:\n  - Argued there is no contradiction between economic growth and social justice; both are mutually reinforcing and should be central to IMF policies.\n  - Emphasized adapting corrective policies to account for social impacts and the \"happiness of the people.\"\n\nTranscript of a Press Conference by Dominique Strauss-Kahn, Managing Director-designate of the International Monetary Fund, with Masood Ahmed, Director, External Relations Department, and Saleh Nsouli, Director, IMF Office in Europe (October 1, 2007).\n\n---\n\n\n References\n\n- Brazil and the IMF\n- People's Republic of China and the IMF\n- Spain and the IMF\n- France and the IMF\n- India and the IMF\n- Mexico and the IMF\n- Russian Federation and the IMF\n- United States and the IMF\n- Gold in the IMF -- A Factsheet\n- IMF Quotas -- A Factsheet\n- The IMF and the World Trade Organization -- A Factsheet\n- Transcripts\n- PRESS CENTER\n- Webcast\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/54/tr071001"
    }
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    "Published: October 3, 2007",
    "Dominique Strauss-Kahn was appointed Managing Director-designate of the IMF by consensus of the Executive Board following an open and competitive process.",
    "Nomination details:",
    "Transitional remarks:",
    "Overarching reform goals:",
    "Process and timetable:",
    "Strategic emphasis:",
    "Key framing:",
    "Specific numeric references and examples:",
    "Political feasibility:",
    "Revenue challenge:",
    "Possible revenue and cost measures discussed:",
    "Operational location and staffing:",
    "Latin America:",
    "Africa:",
    "Asia and China:",
    "Growth outlook:",
    "Risks and recent financial tensions:",
    "Institutional role:",
    "Boundaries and cooperation:",
    "Outreach priorities:",
    "Political background:",
    "Social justice:",
    "[Brazil and the IMF](http://www.imf.org/external/country/BRA/index.htm)",
    "[People's Republic of China and the IMF](http://www.imf.org/external/country/CHN/index.htm)",
    "[Spain and the IMF](http://www.imf.org/external/country/ESP/index.htm)",
    "[France and the IMF](http://www.imf.org/external/country/FRA/index.htm)",
    "[India and the IMF](http://www.imf.org/external/country/IND/index.htm)",
    "[Mexico and the IMF](http://www.imf.org/external/country/MEX/index.htm)",
    "[Russian Federation and the IMF](http://www.imf.org/external/country/RUS/index.htm)",
    "[United States and the IMF](http://www.imf.org/external/country/USA/index.htm)",
    "[Gold in the IMF -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2022/gold-in-the-imf)",
    "[IMF Quotas -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2022/imf-quotas)",
    "[The IMF and the World Trade Organization -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2022/imf-and-the-world-trade-organization)",
    "[Transcripts](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[Webcast](https://www.imf.org/external/mmedia/view.asp?eventID=891)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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