French finance minister Christine Lagarde emerged on Friday as Europe’s choice to lead the IMF, getting a boost when a Turkish favorite ruled out his candidacy for the powerful job.
Even as leaders in emerging economies clamored for one of their own to take a job monopolized by Europeans since 1946, analysts called Lagarde the odds-on favorite to replace Dominique Strauss-Kahn as IMF managing director, after Strauss-Kahn resigned to face sexual assault charges in New York.
Lagarde is “practically a shoo-in” as the European Union’s candidate to succeed Strauss-Kahn as IMF managing director, an EU source said.
“We should get such a signal at Deauville,” said the source, referring to the French resort where the world’s eight top industrialized powers will meet on Wednesday and Thursday. The G8 gathers Britain, Canada, France, Germany, Italy, Japan, Russia and the US.
Meanwhile respected Turkish economist and former UN Development Programme chief Kemal Dervis ruled out his candidacy on Friday.
Dervis had been widely perceived as acceptable both to the emerging economies and to the EU.
“I have not been, and will not be, a candidate. I am fully engaged in, happy with, and focused on my global work at the Brookings Institution and look forward to continuing my research and policy work, including work on Turkey,” he said in a statement.
That left Lagarde, who has not personally declared her interest, with no clear challengers.
“She’s the frontrunner at this stage, but the race has not yet begun,” said former IMF economist Michael Mussa, now at the Peterson Institute for International Economics.
Ahead of the formal nomination process, “it’s premature to say that it’s decided,” he said.
Emerging economic powers like China, India and Brazil are calling for an end to Europe’s lock on the position, the product of a 65-year-old gentleman’s agreement that allowed Washington to monopolize the World Bank presidency.
Angel Gurria, the Mexican head of the Organisation for Economic Co-operation and Development, said the time had come to change the European-biased tradition.
“I think that this time it is possible, but it must be done quickly,” he said.
Chilean finance minister Felipe Larrain said that “the current situation of the emerging world merits the consideration of someone from this region.”
However, with five European countries, including Ireland, Greece and now Portugal, currently under massive IMF bailouts, Europe wants someone who like Strauss-Kahn could take a central role in rescuing the troubled EU “periphery” economies.
“Europe owes it to itself to act quickly,” the EU source said.
The position is a crucial one in the world economy. The global lender of last resort, the IMF each year lends tens of billions of dollars to troubled countries to help right their economies when no others will help them.
It also lays down strict standards of fiscal and economic reform for its clients, which can upset political and social systems.
Developing countries have not coalesced behind one individual. Names mentioned include Indian planner Montek Singh Ahluwalia; Mexican central banker Agustin Carstens; Trevor Manuel, South Africa’s former finance minister; and Leszek Balcerowicz, the pioneer of Poland’s transition from communism to the free market.
However, they could have a tough time against Lagarde, who is widely respected in global financial circles and well liked by the US — which controls 16.8 percent of the voting power on the IMF executive board.
Europe’s seven directors control 31.5 percent of the vote.
“She’s the odds-on favorite ... It would take someone very, very strong to defeat Lagarde,” Mussa said. “It is a plus that she’s a woman.”
Washington remained uncommitted publicly, while urging the issue be resolved quickly.
“We are prepared to support a candidate with the requisite, deep experience and leadership qualities, and who can command broad support among the fund’s membership,” US Secretary of the Treasury Timothy Geithner said on Friday.
See Stories on page 7
‘IN A DIFFERENT PLACE’: The envoy first visited Shanghai, where he attended a Chinese basketball playoff match, and is to meet top officials in Beijing tomorrow US Secretary of State Antony Blinken yesterday arrived in China on his second visit in a year as the US ramps up pressure on its rival over its support for Russia while also seeking to manage tensions with Beijing. The US diplomat tomorrow is to meet China’s top brass in Beijing, where he is also expected to plead for restraint as Taiwan inaugurates president-elect William Lai (賴清德), and to raise US concerns on Chinese trade practices. However, Blinken is also seeking to stabilize ties, with tensions between the world’s two largest economies easing since his previous visit in June last year. At the
UNSETTLING IMAGES: The scene took place in front of TV crews covering the Trump trial, with a CNN anchor calling it an ‘emotional and unbelievably disturbing moment’ A man who doused himself in an accelerant and set himself on fire outside the courthouse where former US president Donald Trump is on trial has died, police said yesterday. The New York City Police Department (NYPD) said the man was declared dead by staff at an area hospital. The man was in Collect Pond Park at about 1:30pm on Friday when he took out pamphlets espousing conspiracy theories, tossed them around, then doused himself in an accelerant and set himself on fire, officials and witnesses said. A large number of police officers were nearby when it happened. Some officers and bystanders rushed
Beijing is continuing to commit genocide and crimes against humanity against Uyghurs and other Muslim minorities in its western Xinjiang province, U.S. Secretary of State Antony Blinken said in a report published on Monday, ahead of his planned visit to China this week. The State Department’s annual human rights report, which documents abuses recorded all over the world during the previous calendar year, repeated language from previous years on the treatment of Muslims in Xinjiang, but the publication raises the issue ahead of delicate talks, including on the war in Ukraine and global trade, between the top U.S. diplomat and Chinese
RIVER TRAGEDY: Local fishers and residents helped rescue people after the vessel capsized, while motorbike taxis evacuated some of the injured At least 58 people going to a funeral died after their overloaded river boat capsized in the Central African Republic’s (CAR) capital, Bangui, the head of civil protection said on Saturday. “We were able to extract 58 lifeless bodies,” Thomas Djimasse told Radio Guira. “We don’t know the total number of people who are underwater. According to witnesses and videos on social media, the wooden boat was carrying more than 300 people — some standing and others perched on wooden structures — when it sank on the Mpoko River on Friday. The vessel was heading to the funeral of a village chief in