The IMF board is due to convene tomorrow to discuss the merits of each candidate. Reports suggest that today they are to take a straw poll of member governments to see whether any candidate has a clear majority. This chart gives you a pretty good idea of what the results might look like…
The US has in the past said it would support the candidate with broad geographic support, the outcome of the straw poll then, is likely to give them the justification to support Lagarde and skirt around accusations that a motivating factor is control of the IMF deputy MD post and of course the World Bank presidency.
In the past couple days a number of nations have jumped off the fence and are publically putting their support behind a candidate. Joining the Carstens camp are Canada and Australia who released a joint statement of Friday. After reiterating the need for an open, transparent and merit based process they go on to say:
Agustín Carstens’ previous experience in the IMF, combined with his background as Finance Minister of Mexico and his current position as Governor of the Mexican central bank, equip him very well to understand and address, on a collaborative and inclusive basis with IMF member countries, the challenges faced by the global economy. Accordingly, after due consideration of the candidates and the IMF selection criteria, we have decided to support him for the position of IMF Managing Director.
Lagarde it seems may at last have the support of China, though the tone suggests they are more resigned to the inevitably of her appointment. China’s central bank chief said “of course we still do not know what the final situation will be. Currently, there doesn’t seem to be anything unclear about it”.
So is that a known unkown or an unkown known?
Carstens is due in China today to drum up some support from the Asian economies. Though neither candidate has the official backing of the Chinese, there have been some statements in Lagarde’s favour, which the French have been happy to take as endorsements. Both sides should be cautious when jumping the gun – in Indonesia; the Finance Minister Angus Martowardojo is under fire for his “personal support” of Lagarde, which is not yet the official stance of the county.
In an interview with the Miami Herald Carstens put forward a case for unified BRICS support:
“If I win, it would be a strong statement of Latin America’s power … And even if we don’t win, a strong Latin American vote against the status quo would be a strong signal that we don’t agree with the way things are being done at the IMF. That’s why it is so important to have a region-wide Latin American vote.”
Continue reading “In the news: Carstens in China, US to move in on Number 2”
Angela Merkel continues to bat back question on the leadership battle. She feels that in the long-run, of course it does not make sense for the US to automatically head the World Bank and the Euro-zone the Fund. How long is a piece of string?*
Former IMF chief economist Simon Johnson continues to stir things up. After giving Ms Lagarde a less than favourable review last week, he shares some thoughts on why exactly it is so important for Europe to hold onto the IMF. Curious given that a few years ago the EU attitude risked pushing the IMF into insignificance.
Away from the press cameras and microphones, what did Ms Lagarde and Brazilian Finance Minister Guido Mantega talk about? Rumour is that Mantega is willing to back her in exchange for “a strategic position” at the Fund, perhaps that of deputy managing director, traditionally held by the US…
Continue reading “Carstens in Brazil, Lagarde heads for China”
It seems like there is almost no newspaper or comment writer out there that actually wants Lagarde to be the head of the IMF. The influential weekly news magazine, The Economist, editorialised against Lagarde last Friday.
“… the stitch-up, whereby the head of the IMF is a European and the head of the World Bank is an American, is a disgrace. International posts should be filled according to merit. And the growth of emerging economies makes it even less defensible.
Continue reading “Editorialising against Lagarde: across the spectrum”
In an unprecedented move, late on Tuesday in Washington, the IMF executive directors that represent Brazil, Russia, India, China and South Africa issued a joint statement on the IMF selection process. The statement of course demands a “truly transparent, merit-based and competitive process for the selection of the Managing Director of the IMF and other senior positions in the Bretton Woods institutions.” What is more important is that it shows unity and the demand that the next IMF head be a reformer. This will be a blow to the hopes of Mexico’s Augustin Carstens but also a sharp rebuke to the Europeans and a warning to the US.
Continue reading “BRICS come together and demand change, European arguments rebutted”