IMF leadership race starts in earnest
The executive board of the IMF is expected to be chosen by the end of this month.
Also competing for the role are the central bank governors of Mexico and Kazakhstan, Agustin Carstens and Grigory Marchenko.
Mr Carstens’ policy views are seen as too conservative by many of his emerging market peers.
There seems to be some disagreement, however, on having another European in the chief role. Traditionally, the IMF chief has been an European and the World Bank head an American.
At the end of last month, the BRICS bloc of Brazil, Russia, India, China and South Africa issued a joint statement questioning the methodology of selection of IMF chief on the basis of nationality.
“The convention that the selection of the managing director is made, in practice, on the basis of nationality undermines the legitimacy of the fund,” they said.
Yesterday, however, South Africa’s Trevor Manuel ruled himself out.
Although Ms Lagarde is the favourite for the job, the threat of a judicial inquiry remains.
A top French court put off until 8 July its decision on whether to open a formal inquiry into allegations brought by opposition left-wing deputies that she abused her authority in approving a €285 million payout to a businessman friend of President Nicolas Sarkozy.
Ms Lagarde said she is confident about the outcome. “I am not concerned at all about this particular inquiry, and I reaffirm as I did when I put my candidacy and threw my hat in the ring, that there is absolutely no grounds to that inquiry.”
Ms Lagarde has flown to Brazil, India and China to tout her credentials for the IMF job, and carries on her tour to Saudi Arabia and Egypt this weekend.
“I am not the candidate of Europe, I am not the candidate of France, I am the candidate to serve the 187 of the IMF, so that the institution can deliver the services they need,” she said.
The top position at the IMF became available after the shock departure of Frenchman Dominique Strauss-Kahn last month over charges that he tried to rape a New York hotel maid.
Four of the IMF’s 10 managing directors since 1946 have been French but Lagarde, 55, would be the first woman in the job.
Ms Lagarde is backed by the European Union and a handful of smaller countries, from Georgia to Mauritius.
- THE IMF’s 24-member executive board is tasked with finding the agency’s new managing director. The board is made up of representatives of the IMF’s 187 member countries.
The US, China, Japan and Britain have their own seats on the board, while other countries are grouped into constituencies. Each country or constituency has a quota of votes which was originally meant to be related to its share of the world economy. If the board can not agree on a new chief, they will vote.
The quota system has come under criticism, however, as China’s share of the global economy is 13.6% but its share of the vote is 3.82%, while Britain and France each account for 2.9% of the world economy but each has 4.3% of the vote. Overall, the EU has about a third of the vote and they are backing French finance minister, Christine Lagarde. If the EU and the US agree to a candidate, this would bring the total votes to nearly 50%.
