In surprise news, Kemal Dervis, considered a leading contender for the IMF leadership if the European intransigence over the post can be broken, has ruled himself out of the race. Media outlets are reporting that the Brookings Institution, the think tank where Dervis now works, released a statement today saying that he would not in contention for the job. Read the coverage at Reuters, the Financial Times, Associated Press.
This leaves a big gap for developing countries to fill over a crucial weekend. If the appearance becomes that Lagarde is the only “credible” candidate, then the deed may be done even before the IMF board formally asks for nominations. First mover advantage is important when it is about maintaining the unwritten “gentleman’s agreement” between Europe and the US. Can a desirable developing country candidate come forward soon? Would someone respected and experienced, like former Indian central bank governor YV Reddy, be willing to step forward?