Despite a flurry of media reports this morning, Manuel is not running to be head of the IMF. He said “My adrenaline is flowing about South Africa right now – it’s where my focus is.” Many have speculated that he had neither the backing of the South African government nor the backing of other emerging markets, so a bid for the job would have been futile.
UK newspaper the Telegraph also suggests that Grigoriy Marchenko will drop out of the race tonight. While Marchenko, in his interview with the paper, does not directly say he’ll drop out, he does speculate: “There’s a lot of information coming from different sources which is implying that there’s agreement between G8 countries about support for Madame Lagarde, and if countries which together have more than 60pc of the vote have agreed to support one candidate, then it’s more or less a done deal.” The Telegraph extrapolates from this that he will withdraw his name.
Marchenko’s comment is telling:
“Another thing that’s clear, and sad, is that developing countries are not in a position to come up with a single candidate,” he said. “If developing nations unite around a single candidate, I would be more than happy to support him or her. This whole thing is not based around my own personal ambition.”
So the BRICS executive directors statement, an unprecedented show of unity, didn’t translate into something more. But Danny Bradlow of University of Pretoria, as well as Marchenko, think that the BRICS can get concessions out of this debacle. Bradlow first:
“The Europeans’ effort to foist their candidate onto the IMF creates an opportunity. They can be forced to pay a price for their hypocrisy. Already, Christine Lagarde has offered to include more citizens from developing countries in her senior IMF management team. This is merely her opening bid for electoral support. We should insist on a higher price that includes both IMF governance reforms and support for innovative financing for development. The governance reforms should include publicly available performance criteria for the IMF managing director that can be used to hold her accountable and more effective channels for developing country input into IMF policy discussions. The innovative financing options could include a firm European commitment to transfer their SDR allocations to support a climate mitigation and adaptation fund for developing countries, support for financial transaction taxes dedicated to a specified development purpose, and support for efforts to promote financial inclusion in developing countries.
“It is probably too late to block the shameless efforts of the Europeans to preserve their prerogatives in the IMF. But there is still time to show them that the cost of doing so has risen – possibly high enough even to convince them to accept real reform of the IMF.”
Marchenko has another specific prize in mind. According to the Telegraph: “He said that it would now make more sense for developing nations to bind together and push to nominate the head of the World Bank when Robert Zoellick’s term comes to an end. ”
At the very least many are talking of jettisoning the idea that the US should automatically get the number 2 spot at the IMF. Could developing countries claim two scalps at once? Displacing the Americans from the first DMD post at the Fund and the presidency at the World Bank? That might be good punishment for an American administration that promised a lot, but delivered nothing because it found it more convenient to stick to a sordid back-room deal.