Experts: Kazakh National Bank chairman has minimal chances to head IMF

Business Materials 24 May 2011 18:46 (UTC +04:00)
Head of the Kazakh National Bank Grigory Marchenko has minimal chances to be appointed the IMF head, experts believe.
Experts: Kazakh National Bank chairman has minimal chances to head IMF

Azerbaijan, Baku, May 24 / Trend E. Ostapenko /

Head of the Kazakh National Bank Grigory Marchenko has minimal chances to be appointed the IMF head, experts believe.

"Marchenko's chances are low," Center of Economic Research Chief at the Institute of Globalization and Social Movements Vasily Koltashov told Trend. "It does not deal with professional qualities. The fact is that the International Monetary Fund is traditionally headed by people representing the interests of Western countries."

It is connected with the fact that the IMF serves the interests of corporate centers in the U.S. and Western Europe.

Late last week, Marchenko was nominated as the single candidate from the CIS countries to head the IMF.

The post has been vacant since the previous managing director, 62-year-old Dominique Strauss-Kahn, resigned in connection with charges of a sexual nature. He was considered one of the main
contenders in the presidential elections of 2012. The trial over Strauss-Kahn will take place on June 6.

Marchenko has headed the Kazakh National Bank since 2009. His nomination was a complete surprise, although, he considers his nomination theoretically possible.

"I was not looking for posts in my life, but I was always appointed," he told media. "But frankly speaking, it is unexpected. I do not know, I can not imagine my life outside of Almaty."

The IMF chief is elected by vote of the IMF Executive Board, consisting of 24 members. The votes are distributed depending on the countries' contribution to the IMF. The U.S has the largest
contribution to the IMF - they vote 16.8 percent of stakes. G7 has 44.3 percent of the voting rights in the IMF.

"Strauss-Kahn's dismissal is extraordinary. It is related to the financial problems of the U.S.," Koltashov said. "The IMF must turn the monetary policies of governments in the interests of the United States. The new head must be not only close, but absolutely own person
for Washington."

The candidates for the IMF head are the following:
- French Finance Minister Christine Lagarde,
- Former head of the Central Bank of Germany Axel Weber,
- Former British Prime Minister Gordon Brown,
- Former finance minister of Turkey Kemal Dervis
- The head of one of the IMF offices, the candidate from the developing countries (he is not supported by China), Indian Montek Singh Ahluwalia
- The head of the Central Bank of Israel Stanley Fischer
- Finance Minister of Singapore Tharman Shanmugaratnam
- the head of the Central Bank of Mexico Agustin Kastens
- Former South African Finance Minister Trevor Manuel
- The IMF acting head John Lipsky.

The founder of the IFRI research center in France, now a columnist in the draft Project Syndicate Dominique Moisè, thinks that Marchenko has low chances. He is more confident of a Turkish pretender's victory.

"Marchenko is not famous enough in Europe,' Moisè told Trend. If a non-European representative is elected, then it is likely to be a 62-year-old Turkey's former finance minister Kemal Dervis.
The representatives of the CIS countries, particularly Russia, insist for the elections to be held on a competitive and transparent manner, without reference to the geographical principle.

Each country contributes an amount to the fund in accordance with the quota. The amount defines the number of votes that an IMF participant has in the Board of Governors of the Fund.

The developing countries have strengthened their positions since 2009. Their share increased from 39,4 percent to 42,1 percent. China's quota increased by 1 up to 4 percent of the total amount. India has increased by 0,5 percent - up to 2.44 percent, Brazil - by 0.36 percent, up to 1.78 percent and Russia - up to 2,7 percent.

The biggest quota still falls on the United States - 17.67 percent. Japan has 6.55 percent, Germany - 6.11 percent, France - 4,5 percent.

"Any outcome will be positive for Kazakhstan, Spanov said. The fact that Marchenko's candidate is nominated by a group of countries, testifies to a certain recognition of his merits and the fact that Kazakhstan has a good enough model of the banking system. From the standpoint of image, it is a safe bet. "
Kazakhstan considers that Marchenko will be nominated for the IMF head, because certain political forces are interested in his resignation from the position of the head of the Kazakh National Bank.

"Any version has the right to life," Spanov said. This is a political and economic struggle. Any post is the epicenter of the struggle."

The expert said that many people dislike Marchenko for too tough policy.

"They can not forgive him the devaluation of the tenge, because it has not brought the expected results," Spanov said. "The Kazakh Senate is offended by him, because Marchenko ignores it."

However, if we evaluate Marchenko's professional qualities, then, he meets the requirements that are necessary for the chairman of the Central Bank.

Marchenko has 17-year-experience in senior positions, including the banking sector. He began working in the National Bank in 1994. He headed the Kazakh national commission on securities. He was adviser to the president in 1997-1999.
He headed the National Bank in 1999-2004. Then, he was re-appointed to this position in 2009.

Marchenko was the first deputy prime minister from January to April 2004 and Assistant to the President for Economic Affairs from April to October.

"The head of the National Bank is largely a technical position," Koltashov said. "It is doubtful that they decided to remove Marchenko from this post now. On the contrary, his positions look stronger compared to his appointment two years ago."