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. Last Updated: 07/27/2016

IMF Picks Strauss-Kahn Over Russia's Candidate

WASHINGTON -- The International Monetary Fund chose France's Dominique Strauss-Kahn as its new leader to chart a new course for the 185-nation lending organization and restore its relevance in a world that seems to need it less and less.

Strauss-Kahn, 58, a former Socialist finance minister, replaces Spain's Rodrigo de Rato on Nov. 1 and will serve a five-year term as managing director.

The French official said Friday in a statement that he was "determined to pursue without delay the reforms needed for the IMF to make financial stability serve the international community, while fostering growth and employment."

In the late 1990s, the IMF lent billions to countries stricken with financial crises while recommending unpopular belt-tightening policies that led one Third World president to dub it "the international misery fund."

Lately, countries no longer are borrowing as often as they did, so funds for operations are down, staff cuts are imminent, and the agency may have to sell gold reserves to make ends meet.

Countries with fast-developing economies and access to international capital markets, such as China and Brazil, no longer need the IMF, but it still runs lending programs for poorer nations, many of them in Africa.

Under Rato, the IMF has been trying to give more influence to the booming countries in its decisions while strengthening its monitoring of global trade imbalances and currency exchange rates.

Rato, who announced in June he was stepping down for personal reasons, pledged to work with Strauss-Kahn to ensure a smooth transition.

The fund's 24 executive directors selected Strauss-Kahn by consensus, which means without a vote.

Strauss-Kahn became the odds-on favorite for the job after securing the support of the United States and the 27-nation European Union. The other candidate was Josef Tosovsky, a former Czech prime minister and central banker nominated by Russia.

The French official in his statement said his candidacy derived legitimacy "from the very broad support I received, notably from emerging market and low-income countries," many of which he visited in the past few weeks as he campaigned for the post.

Tosovsky was nominated by Russia in an apparent attempt to challenge a selection process that goes back to the founding of the IMF and World Bank after World War II. In that tradition, a European gets the top IMF post, and an American heads the bank.

Early this year, the European Union supported the Bush administration's choice of Robert Zoellick, an American, to take the helm at the bank.

Some member governments and aid groups have criticized the process as outmoded and have said the positions should be open to the most qualified candidates.

They say a good time to change to that system would be 2012 when Zoellick and Strauss-Khan are scheduled to leave office.

Tosovsky also made a presentation to the board and praised its decision to give China, Brazil, Mexico and Turkey greater says in IMF operations.