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as developing nations failed to unite behind a candidate.
US Treasury Secretary Timothy F. Geithner called for the quick appointment of a new managing director on Thursday last week while the Obama administration avoided backing any one person.
“We want to see an open process that leads to a prompt succession,” Geithner said in a statement. John Lipsky, the Washington-based IMF’s acting managing director, “will provide able and experienced leadership to the fund at this critical time for the global economy,” Geithner said.
European officials moved to maintain control over the institution that approved a record US$91,7 billion in emergency loans last year and provides a third of the euro-area’s bailout packages. Italy and Sweden backed Lagarde, while German Foreign Minister Guido Westerwelle said he holds her in high esteem, the first public hint of German support.
“I would argue that Christine Lagarde has outstanding credentials,” Swedish Finance Minister Anders Borg said in a Bloomberg Television interview yesterday. Her gender is an “advantage” since “half of the world has not been represented as managing director” of the IMF, Borg said.
Italian Prime Minister Silvio Berlusconi said Lagarde would be “an excellent choice” as Europe’s candidate, the Italian government said in an e-mailed statement yesterday. Berlusconi said it’s “fundamental” that Europe should reach a common position on whom the candidate should be as soon as possible, the statement said.
Lagarde is now the “odds-on” favourite for the IMF’s top job after being a “20-1 outsider when betting began,” London-based bookmaker William Hill Plc said in an e-mailed statement today.
Trailing her were former Turkish Economy Minister Kemal Dervis and South Africa’s ex-Finance Minister Trevor Manuel, at 3-1 and 5-1 odds, respectively.
Officials in emerging markets including Thailand, Russia and South Africa said the next IMF managing director should come from a developing nation even as they failed to unite behind one candidate the way Europe coalesced around Lagarde.
While Chinese officials haven’t publicly endorsed any candidate, Thailand and the Philippines backed Singapore Finance Minister Tharman Shanmugaratnam as a possible choice to succeed Strauss-Kahn at the IMF.
Philippine Finance Secretary Cesar Purisima said in an interview today that Shanmugaratnam “is certainly well qualified”, and his Thai counterpart Korn Chatikavanij said yesterday Asia has good candidates, including Shanmugaratnam.
“I think the US and Europe should take it upon themselves to really open this up to all candidates that are qualified, not necessarily just Europeans,” Purisima said in an interview.
The time has come for a non-European to head the IMF, according to Angel Gurria, secretary-general of the Organisation for Economic Co-operation and Development. “The moment has come to change what is a tradition, which is that the IMF is led by a European,” the former Mexican finance minister said.
Brazilian ex-central banker Arminio Fraga, South Africa’s Manuel, India’s Montek Singh Ahluwalia and Shanmugaratnam would all make “fine candidates” to lead the IMF, Raghuram Rajan, a professor at the University of Chicago and a former chief IMF economist, wrote in the Financial Times.
China’s government has asked Peter Mandelson, a former UK business secretary and European trade commissioner, whether he’s interested in the job, the Guardian reported, citing no one.
Strauss-Kahn resigned as the 10th leader of the IMF four days after his arrest in New York on sexual-assault charges.
“I want to devote all my strength, all my time and all my energy to proving my innocence,” Strauss-Kahn said in a statement released by the IMF. The fund said it will comment “in the near future” on the succession. Strauss-Kahn (62) had been leading in polls for France’s 2012 presidential election.
Strauss-Kahn, a former French finance minister, was arrested May 14 on accusations of sexually assaulting a hotel maid and has been at New York’s Rikers Island jail complex since May 16.
While he has denied the accusations, he hasn’t entered a formal plea to any of the charges, which include attempted rape. The indictment in the case was filed last week. – Bloomberg.