French Finance Minister Christine Lagarde faces no real competition from emerging markets in her bid to lead the International Monetary Fund, though it’s high time for a non-European to take over, said Russian Deputy Finance Minister Sergei Storchak.
“We’re in the strange situation of having another European in line for this job, but a European whose personal and professional qualities make her almost impossible to compete with,” Storchak said in an interview in Moscow yesterday. “She has the right background, perfect English and the ability to lead negotiations.”
Russia and other developing nations, including Mexico and South Africa, are seeking to break a half-century-old tradition of filling the IMF managing director’s post with a European. Lagarde, who has won endorsements from across Europe, said yesterday during a visit to Brazil that being French is neither an advantage nor a drawback to her candidacy.
Major developing economies have struggled to come up with a consensus candidate to replace Dominique Strauss-Kahn as IMF chief. Russia and other former Soviet republics backed Grigori Marchenko, chairman of the Kazakh central bank, while Mexico nominated its central bank governor, Agustin Carstens. Finance Minister Pravin Gordhan said yesterday that South Africa may still advance its own candidate before the June 10 deadline.
“It’s very tough to compete with Lagarde,” Storchak said. “The Europeans acted in unison and that’s it.”
The IMF aims to complete the selection of a new managing director by June 30. European Union member states hold about 31 percent of the votes and the U.S. almost 17 percent. Emerging-market and developing countries boosted their share to 42 percent from 40.5 percent under Strauss-Kahn’s management.
Russia, which holds 2.4 percent of votes in the IMF, failed in previous attempts to gain a greater say in international financial institutions for emerging markets. In 2007, when Strauss-Kahn was elected, Russia supported Josef Tosovsky, a former Czech prime minister and central bank governor.
“We took a risk then and in Strauss-Kahn we didn’t get a terribly reliable ally,” Storchak said. “I am sure he remembers that very well.”
The new IMF head faces the “challenge” of reforming the voting system, which doesn’t fully take into account the size of countries’ economies, Storchak said.
“Countries that back in the day got some preferences don’t want to lose them, while other countries that want to raise their significance have no way to change anything,” he said.
The IMF, which made a record $91.7 billion in emergency loans last year and provides one-third of the EU’s rescue packages, has promised transparency in the selection process.
Strauss-Kahn resigned from the post last month to defend himself against charges that he sexually assaulted a maid at a Manhattan hotel. Lagarde would be the first woman to lead the IMF since its founding in 1945.