A lot of developments have been taking place in the race to head the IMF. First lets admonish Poland for deciding to sleep in the dog-house along with the rest of Europe. Polish Finance Minister Jacek Rostowski said about Lagarde on Wednesday: “This is a very good candidacy, it’s hard to imagine a better candidacy and it has the backing of the Polish government.” Never mind that we don’t yet know what the other candidacies will be.
Korea was at least a little better than that. South Korea’s finance minister Yoon Jeung-hyun gave an interview to the Financial Times, and they wrote: “Seoul could not announce its final preference until after June 10, the candidates’ deadline. He said he remained keen to see whether an equally strong candidate to replace Dominique Strauss-Kahn would emerge from a developing nation.” That is more principled than the UK, but Yoon did call Lagarde “a very strong candidate and has the qualities needed to be a good managing director”.
Was US Secretary of State Hilary Clinton trying to preempt a decision by her Treasury Secretary colleague when she spoke in praise of Lagarde on Thursday? She was reported to have said that the US would “welcome women who are well-qualified and experienced to head major organizations such as the IMF.” She failed to endorse Lagarde fully though, was she trying to dispel some mummers that a woman was not suitable to run the IMF? That would have been even more backward than saying that a non-European would not be suitable to run the IMF. We should be well beyond such discrimination in the 21st century.
The big story will come when India, along with other major emerging markets make up their mind about what to do. But India seems to be generating the most attention, largely because Indian IMF executive director has been speaking to the press. Even Indian Prime minister commented on reform of the IMF on Thursday, saying “All developing countries have to stand together to meet the challenges.” But is was the late Wednesday Reuters report that has people on edge. The finance ministry official quoted anonymously said: “We expect a common candidate of BRICS/emerging economies may be announced in two to three days.” That means today or tomorrow.
Hopefully the BRIC countries will heed the advice of Surin Pitsuwan, the head of the Association of South-East Asian Nations (ASEAN): “This region must be given opportunity to make a contribution in the governance of those global institutions important to all of us. As a secretary general of ASEAN, I would say just go for it, and even if we do not win this time, we should not let it go without a challenge as this post is not monopoly of Europe.
Critics of the IMF are waiting to see if they can propose a name that will be satisfactory to those demanding both governance and policy change. Someone independent of major states, eager to deeply reform the institution, and focused on unemployment and inequality. No candidate so far meets that test.