Lagarde in Brazil to promote IMF candidacy
Tuesday, May 31, 2011
BRASILIA, Brazil (AP) — French Finance Minister Christine Lagarde met with her Brazilian counterpart Monday to promote her candidacy to head the International Monetary Fund and said she backed the institution’s reforms giving developing nations more of a voice in its operations.
Despite the overture, Brazil’s Finance Minister Guido Mantega said his country would examine all the candidates for the top job before throwing its support behind anyone. The only other declared candidate, Mexico’s central bank Governor Agustin Carstens, plans to visit Brazil later this week.
Lagarde, who would be the IMF’s first female leader, has emerged as the odds-on favorite to replace former Managing Director Dominique Strauss-Kahn, of France, who quit May 18 after he was accused of sexually attacking a New York hotel maid. He has denied the allegations.
Lagarde said the IMF should continue reforms giving developing countries a greater share of votes in the institution, among other measures.
“There is a wave of reform that has been pledged since 2008 and needs to be carried out,” she said after meeting Mantega.
At a later press conference, Lagarde added: “I will ensure that the Fund represents the diversity of all its members.”
Lagarde is touring the globe’s big developing powers in anticipation that her appointment may increase tensions with nations such as Brazil and China that argue countries outside of Europe should be allowed to lead the organization.
“Being European and French should not be a benefit and it should not be a drawback,” Lagarde told reporters after meeting with Mantega.
The decision on the next IMF leader is expected by the end of June. It will be made by the agency’s 24-member executive board, whose officials represent the 187 IMF member countries.
The Brazilian finance minister said the IMF should be open to breaking with long-standing tradition, in which the IMF is led by a European while the United States names a head for sister organization the World Bank.
“We have to leave the door open so that the director of the IMF could be anybody — they could be European, an American” or a person from an emerging power, Mantega said.
“What is important for Brazil is that the IMF continues its path of the last three years, when it’s gone through important reforms.”
Carstens, speaking in Mexico, said it will be a “complex battle” for the IMF post because if a candidate from an emerging country wins it would “break a paradigm of 65 years.”
“To obtain solutions experience in relay dealing with these kinds of problems is needed,” he said.
Lagarde said she visited Brazil first on her tour because it’s a growing power with an increasingly influential voice on the global stage. A spokesman with the French Embassy in Brazil said she will fly back to Paris late Monday and will visit China next week as the next stop on the tour.
She also plans to visit other influential developing nations to convince them that if given the job, she will not exclusively focus on Europe, where the fund is closely involved in a half-dozen bailout deals.
Since the global financial crisis began in 2008, Mantega and other leaders from developing nations have fought for reforms in the IMF, World Bank and other multilateral institutions that would take into account the growth of emerging nations such as Brazil, China and India.
“We must establish meritocracy, so that the person leading the IMF is selected on their merits and not for being European,” Mantega said earlier this month. “You can have a competent European ... but you can have a representative from an emerging nation who is competent as well.”
Mantega also has said that whoever is chosen to replace Strauss-Kahn should only hold the job until the former managing director’s term expires at the end of 2012. Mantega has argued that would give IMF member nations more time to carefully choose a full-term chief.
Chinese Foreign Ministry spokeswoman Jiang Yu has suggested the IMF should shake up the status quo and said the leadership “should be based on fairness, transparency and merit.”
South African Finance Minister Pravin Gordhan went further earlier this month, arguing that the new director should come from an emerging economy to “bring a new perspective that will ensure that the interests of all countries, both developed and developing, are fully reflected in the operations and policies of the IMF.”
French Foreign Minister Alain Juppe said on French television Sunday that there was unanimous support for Lagarde last week among the Group of Eight leaders at their annual summit in Deauville, France.
The U.S., whose vote will be crucial for Lagarde’s nomination, has not officially endorsed a candidate.