Economy

No agreement yet on new IMF chief

By Shamim Adam (China Daily)
Updated: 2011-05-23 10:11

From left to right: Manmohan Singh, India's prime minister, Dmitry Medvedev, Russia's president, Hu Jintao, China's president, Dilma Rousseff, Brazil's president, and Jacob Zuma, South Africa's president, pose for a group photo in Sanya, Hainan province. Leaders from Brazil, Russia, India, China, and South Africa met on April 14 for the 2011 BRICS Summit. [Photo/ Agencies]

Several candidates suggested as Strauss-Kahn's replacement

SINGAPORE - The failure of emerging-market nations to rally behind a single candidate to head the International Monetary Fund (IMF) shows the effort still needed to link diplomatic might with growing economic strength.

As the IMF begins its search for a successor to Dominique Strauss-Kahn, Russia is endorsing Grigori Marchenko, the head of Kazakhstan's central bank, while the Philippines and Thailand speak favorably of Singapore Finance Minister Tharman Shanmugaratnam. India, China, Brazil and South Africa have yet to throw their support behind anyone even as they urge selection be driven by merit rather than nationality.

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By contrast, European Union nations have given overwhelming support to French Finance Minister Christine Lagarde to head the Washington-based IMF, the institution that approved a record $91.7 billion in emergency loans last year and provides a third of the euro-area's bailouts. That left Asians, South Americans and Russia talking principles without agreeing on one person.

"The Europeans have the great advantage that they have institutional mechanisms to agree on a candidate upfront," said Ousmene Mandeng, head of public sector investment at Ashmore Group Plc in London and a former IMF economist. "The emerging markets may find it more difficult to identify a common candidate and then lobby to ensure that he or she obtains sufficient support from the United States."

As recently as last month the leaders of Brazil, Russia, India and China, known as the BRIC countries, were urging the US and Europe to end their 65-year monopoly on leadership positions at the IMF and World Bank, which has always been headed by an American. South Africa is now part of the group, which consequently changed its name to BRICS.

June 30 goal

The IMF said it aims to complete the selection of a successor to Strauss-Kahn by June 30. Countries will be able to nominate candidates for the managing director's position between May 23 and June 10, the IMF said in a statement.

"The governing structure of the international financial institutions should reflect the changes in the world economy, increasing the voice and representation of emerging economies and developing countries," the BRICS leaders said in a statement after meeting in Hainan, China, on April 14.

Those positions were echoed by finance chiefs last week following the arrest and subsequent resignation of Strauss-Kahn. The new leadership should reflect changes in the world economy, People's Bank of China Governor Zhou Xiaochuan said on May 19.