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IMF Picks Strauss-Kahn

WASHINGTON (AP) – The International Monetary Fund chose France's Dominique Strauss-Kahn as its new leader Friday at a time when the institution's relevance in rapidly changing times has been questioned.

The fund's 24 executive directors said they selected Strauss Kahn, a former Socialist finance minister, by consensus, that is without a vote.

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

The French official said in a statement 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.”

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

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 Tosovksky, 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.

Strauss-Kahn has to begin trying to chart a different course for the 185-nation organization that has been trying to give countries with fast-developing economies a greater role in IMF decisions.

In addition, IMF member 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 with access to international capital markets, such as China and Brazil, no longer need the IMF, but it still runs lending programs for poor countries, many of them in Africa.

Strauss-Kahn told the board last week, “It will be a hard task for all of us to rebuild the relevance and legitimacy of the organization, but I am prepared to do that, and I ask you to be prepared as well.”

Tosovfsky 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 do this will be 2012, when Zoellick and Strauss-Khan are scheduled to leave office.

Tosovfsky also praised the board's decision to give China, Brazil, Mexico and Turkey a greater say in IMF operations.

Strauss-Kahn said because the head of the IMF must have the backing of the whole organization, he undertook a 60,000 mile (96,500 kilometer) trip to visit member nations, both large and small, “listening and learning from them.

“That is why I am asking for broad support from the board,” he said. “I don't want to be the candidate of the North against the South or from the wealthy against the poor.”

In his statement Strauss-Kahn expressed support for many of de Rato's improvements at the IMF, including efforts to enhance representation of developing countries and more closely monitor trade imbalances and currency exchange rates.