August 18, 2022

Lagarde Gaining Favor of Emerging Economies to Lead I.M.F.

PARIS — As the race for a new leader at the International Monetary Fund moves toward a pivotal deadline this week, the global charm offensive by the French finance minister, Christine Lagarde, appears to be paying off.

Despite their alarm over efforts to put yet another European in one of the most powerful positions in global finance, China, Brazil and other fast-growing nations appear to be concluding that it would be in their interest to support Ms. Lagarde over her main rival, the Mexican central bank governor, Agustín Carstens.

For now, some of the biggest developing nations seem to see Ms. Lagarde as their best bet for increasing their power at the I.M.F. as their economies gain status in the global financial order.

With a deadline looming Friday for nominations to the I.M.F. directorship, Ms. Lagarde has mounted an energetic campaign — including sending messages via Twitter of her impressions of meetings with country leaders at each stop, and promising to give developing nations more sway at the fund.

On Tuesday, Ms. Lagarde sought to broaden her appeal in India. There, officials have fumed about the European arrogance they perceive in pushing her to succeed the former I.M.F. chief, Dominique Strauss-Kahn, who resigned last month to fight charges in New York of attempted rape and sexual assault.

Mr. Lagarde vowed Tuesday, at a news conference in New Delhi, to represent the needs of emerging markets so thoroughly that “a little part of me will become Indian.”

Ms. Lagarde plans to go to China on Wednesday. Her campaign could gain even more momentum if leaders there decide that supporting her could pave the way for a Chinese official to be named as one of the I.M.F.’s three deputy managing directors, three people with ties to Beijing’s decision makers said.

Mr. Carstens is on his own international tour and plans stops in India, China and Japan to seek support.

Although I.M.F. representatives from Brazil, Russia, India, China and South Africa have condemned the “obsolete, unwritten convention” of reserving the top job for a European, they have not displayed similar solidarity for one candidate of their own.

Instead, officials in Brazil, Russia and China have already privately conceded that Ms. Lagarde may have more ability than Mr. Carstens, or another candidate, to increase their own influence at the I.M.F.

“I think that it will be very difficult to compete with Christine Lagarde,” said Sergei A. Storchak, a Russian deputy minister of finance. “The countries with the most votes in the I.M.F. stand behind her.”

Ms. Lagarde and Mr. Carstens began their campaign swings through emerging economies in Brazil. But after the meetings, Brazilian government officials privately said they were leaning toward Ms. Lagarde. Argentina was also not willing to commit to Mr. Carstens.

On Tuesday, before her news conference in New Delhi, Ms. Lagarde met with the prime minister of India, Manmohan Singh, and the finance minister Pranab Mukherjee. Mr. Mukherjee later told reporters that India had not decided to back Ms. Lagarde, and that it would like to be part of a consensus of nations that chooses a new managing director for the fund.

Europeans and the Group of 8 wealthy economies have backed Ms. Lagarde to address concerns that a debt crisis in the euro monetary union, where most of the I.M.F.’s rescue programs are focused, could become more unwieldy if a European did not run the fund. The I.M.F. has lent about 100 billion euros to Greece, Ireland and Portugal to prevent a wider crisis.

“It would be a mistake at this point to give up the European leadership of the I.M.F.,” said a senior fund official, who would not be identified because the selection process was not complete. “The sovereign debt problems in Europe are still so severe that the international community doesn’t have one or two years for a new candidate to learn on the job,” the official said.

In an interview Monday, Mr. Carstens, whose résumé includes six years as a senior I.M.F. official, played down concerns that he would not be able to manage Europe’s debt crisis, saying he would bring a “pair of fresh eyes” to the situation.

He pledged to take new steps to improve the representation of emerging markets and developing countries at the I.M.F., calling those taken so far too “timid.”

Liz Alderman reported from Paris and Keith Bradsher from Hong Kong. Reporting was contributed by Heather Timmons in New Delhi, Elisabeth Malkin in Mexico City, Andrew E. Kramer in Moscow and Alexei Barrionuevo in São Paulo.

Article source: http://www.nytimes.com/2011/06/08/business/global/08fund.html?partner=rss&emc=rss

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