French Finance Minister Christine Lagarde said she agrees with leading developing countries that the selection of the next managing director of the International Monetary Fund should be transparent and based on merit.
Speaking after meetings with Chinese leaders in Beijing to press her candidacy for the post, Lagarde said selecting the first woman to head the Washington-based agency would help improve the institution’s commitment to diversity. China, India and Brazil are among emerging economies that have demanded an end to the six-decade-old custom where the top job at the IMF goes to a European, with an American taking the deputy position.
“The IMF does not belong to anybody, it belongs to the 187 members of the fund,” Lagarde told reporters today in Beijing. “Management of the fund does not belong to any particular” nation or region. The process should be open and “only based on the merits of the candidate.”
Lagarde is trying to turn attention away from her nationality by focusing on her track record as finance minister and running law firm Baker & McKenzie LLP, as well as her being a woman. The IMF post fell vacant when fellow French national Dominique Strauss-Kahn resigned last month after being charged with sexually assaulting a chamber maid in a New York hotel.
“If I was elected managing director it would also be a signal of diversity,” Lagarde said. “My professional experience in the private sector, and as chairman of the largest international law firm” as well as “dealing with very sizable egos, was good training for the job.”
While agreeing that Europeans should no longer have a right to the top IMF job, Lagarde said that “equally you cannot be banished or punished because of your nationality.”
She said she also agreed with China’s leaders on the need to reform IMF “governance, management and doctrine,” and emphasize “the principle of inclusiveness.”
Lagarde met yesterday with People’s Bank of China Governor Zhou Xiaochuan, Vice Premier Wang Qishan, Foreign Minister Yang Jiechi, and Finance Minister Xie Xuren. Before China, she visited Brazil and India and will next travel to Portugal, Saudi Arabia and Egypt.
Next week Agustin Carstens, Mexico’s central bank governor, plans to travel to Beijing to advance his candidacy for the IMF’s top job, according to Banco de Mexico.
The No. 2 slot at the Washington-based agency is also up for grabs, with first deputy managing director John Lipsky due to retire in August. There are also two deputy managing directors, Japan’s Naoyuki Shinohara and Nemat Shafik, who holds U.S., U.K. and Egyptian nationality, according to her profile on the IMF’s website.
In response to a question on whether China’s Zhu Min, a special adviser to the IMF managing director, would play a bigger role, Lagarde said it is “fully appropriate if he played a key role in the management of the fund.”
Continued growth in China’s economy would see the country’s share of voting power continue to rise, she said.
Under Strauss-Kahn, the voting power of developing countries was increased to reflect their bigger share of the world economy. When the new structure comes into place, China will hold 6.07 percent of the votes, behind Japan’s 6.14 percent and the U.S.’s 16.5 percent, according to the IMF’s website. The U.S. and European Union will both see their voting power diminish.
“I am very positive about my trip to China, but the decision does not belong to me, it belongs to the Chinese authorities,” Lagarde said. “It is too early to count the chicken, if I may say,” she said, adding that she aims to “under-promise and over-deliver.”
Carstens is backed by 12 Latin American nations, Mexico’s Finance Ministry said yesterday. He will meet Indian Finance Minister Pranab Mukherjee in New Delhi on June 10, according to ministry officials.
“We want the selection of the managing director of the IMF or that of the World Bank to be done on the basis of merit,” India’s Mukherjee told reporters in New Delhi after Lagarde’s visit. He said Carstens is “a competent person,” adding that “we’ll also talk to them. Let’s see how it emerges.”
Carstens served as IMF deputy managing director from 2003 to 2006. He has a doctorate in economics from the University of Chicago and took the reins of Mexico’s central bank in January 2010 after serving as the country’s finance minister.
Lagarde left India without winning a public endorsement from the government, though she said that had not been her aim. “It would be premature and it would be arrogant on my part to expect assurance or reassurance,” she said June 7 in New Delhi.
Russian Prime Minister Vladimir Putin on May 27 voiced his support for Lagarde, joining the U.K., Germany and Sweden. U.S. Treasury Secretary Timothy F. Geithner has praised Lagarde’s qualifications while refraining from endorsing her candidacy.
Countries from the European Union currently hold about 31 percent of the votes at the agency and the U.S. almost 17 percent. Emerging-market and developing countries have 42 percent.