Hopes that Kemal Dervis would become the first emerging
market politician to head the IMF faded Thursday as Christine
Lagarde emerged as frontrunner to succeed Dominique
Senior policy officials consulted by Emerging
Markets said they were backing the French finance minister
in the wake of Strauss-Kahns dramatic resignation.
A key ally of former Turkish economy minister Kemal Dervis,
a leading contender for the role, acknowledged that his chances
of clinching the top job had receded.
Asked whether Dervis woud become managing director Homi
Kharas, a deputy to the former Turkish finance minister now at
the Brookings Institution in Washington, told Emerging
Markets: Unfortunately I think its
He said Lagardes appointment could undermine the
IMFs legitimacy if her candidacy is secured solely
through a political deal among rich nations. Major
countries at the end of the day are prepared to forgo the
principle of technocratic appointments for the short term
expediency of having a politically trusted friend and that
seems to be the way that the world is currently
The result will be a revolt against the Fund by developing
countries, he added. What we will see from the emerging
nations is that they will vote with their feet.
Developing nations can make [international financial
institutions] less relevant as global institutions and restrict
them to being essentially institutions that play in the arena
of the spheres of influence of the rich countries. That is what
is happening more and more.
European finance ministers and central bankers appear to be
uniting behind Lagarde to take over the IMF job, which has
traditionally been taken by a European since the fund was
founded six decades ago.
Marc Uzan, executive director of the Reinventing Bretton
Woods Committee, told Emerging Markets that Lagarde was
Europes candidate. Shes competent
and shes the chair of the G20, he said.
One well-placed senior European finance ministry official
told Emerging Markets Europeans were not prepared to give up
their right to the IMF position at this particular
time given the number of IMF programmes underway on the
I cant imagine [the leadership] going
elsewhere, he said. I think Lagarde is highly
qualified and acceptable to non-industrialised countries so she
has the best chance. Swedens finance minister
Anders Borg said Lagarde had shown very strong
Speculation has circled around other European candidates but
none has attracted huge support. Axel Weber, the former head of
the Bundesbank who turned down the top job at the ECB, declined
to comment when contacted by Emerging Markets.
Gordon Brown, the former UK Prime Minister who chaired the
IMFs policy committee for a decade, has been effectively
blocked from the job by David Cameron, his successor as PM.
While several emerging economies have called for the process
to be opened up to all candidates regardless of nationality,
they have so far failed to unite around a single candidate.
As well as Dervis, Tharman Shanmugaratnam, the Singaporean
finance minister who chairs the IMFs main policy
committee, and former South African finance minister Trevor
Manuel, have been tipped for the job.
Asian policymakers are likely to back Lagarde, based on the
strong levels of support for her candidacy garnered by
Emerging Markets at the ADB meetings.
ADB President Haruhiko Kuroda said Lagarde would be the
perfect candidate while Indonesian finance minister
Agus Martowardojo said he would recommend her as a very
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