Tracking the fight to head the Fund
Our poll on who you think the worst candidate nominated for head of the Fund has the favourite bringing up the rear. Lagarde recieved 33.71% of the vote with Carstens on 24.72%. The rest was split between the no-runner and Mr Early Retirement
Though the end result is by now all too clear, the Board will likely keep us waiting until June 30th before putting out an official press release announcing Lagarde as the new IMF boss.
All in all a rather malagrugrous state of affairs. I’d say!
The IMF board is due to convene tomorrow to discuss the merits of each candidate. Reports suggest that today they are to take a straw poll of member governments to see whether any candidate has a clear majority. This chart gives you a pretty good idea of what the results might look like…
The US has in the past said it would support the candidate with broad geographic support, the outcome of the straw poll then, is likely to give them the justification to support Lagarde and skirt around accusations that a motivating factor is control of the IMF deputy MD post and of course the World Bank presidency.
In the past couple days a number of nations have jumped off the fence and are publically putting their support behind a candidate. Joining the Carstens camp are Canada and Australia who released a joint statement of Friday. After reiterating the need for an open, transparent and merit based process they go on to say:
Agustín Carstens’ previous experience in the IMF, combined with his background as Finance Minister of Mexico and his current position as Governor of the Mexican central bank, equip him very well to understand and address, on a collaborative and inclusive basis with IMF member countries, the challenges faced by the global economy. Accordingly, after due consideration of the candidates and the IMF selection criteria, we have decided to support him for the position of IMF Managing Director.
Lagarde it seems may at last have the support of China, though the tone suggests they are more resigned to the inevitably of her appointment. China’s central bank chief said “of course we still do not know what the final situation will be. Currently, there doesn’t seem to be anything unclear about it”.
The IMF has released Christine Lagarde’s statement to the board for your reading pleasure. Like Carstens’, she mentions a letter of candidacy, although hers it seems is not publicly available. She covers most issues with broad brush strokes, opting for a focus on steering and managerial duties rather than presenting technical positions.
On the same day campaigners in Washington held a mock coronation of Lagarde to emphasise their disastifaction with the process and particularly the way European countries have acted since the DSK scandal broke. Sarah Wynn-Williams of Oxfam said: “The backroom deal that has pushed Lagarde forward makes a mockery of the appointment process. The new IMF chief should be elected openly, not crowned by Europe.”
In Lagarde’s statement, she outlined five key principles that she feels should guide the IMF over the next five years: Relevance; Responsiveness and surveillance for better crisis prevention; Sufficient resources and adequate tools; Increased legitimacy; and Diversity and team work. Many of the points here were touched on in an exclusive interview she gave last week.
It reads a bit like a management self-help book. None of it addresses in detail the policy questions set out by civil society organisations last week. Continue reading “Acceptance speech dry run? Lagarde meets the board, gets crowned”
Jubilee Debt Campaign have launched an action calling for Christine Lagarde and Agustín Carstens to commit to a public hearing with people affected by the IMF around the world. They say:
Millions of people around the world are affected by the impact of the IMF’s loan conditions and economic ‘advice’, yet there’s been no opportunity for anyone outside the global financial elite to question them in detail and in public … It’s time those on the receiving end had a chance to ask the questions in a public hearing
As well as refering to questions already set out by civil society, the action focuses particularly on the following two questions:
First, I believe it is outdated, undemocratic and illegitimate for senior management at international financial institutions to be nominated and chosen on the basis of their nationality. Powerful countries must stop undermining multilateral institutions by maintaining their stranglehold over certain positions. Will you commit to appointing your deputy managing directors through a genuinely open, merit-based and transparent process?
Second, IMF-sanctioned austerity policies are causing irreparable social, and economic damage in many countries across the world. Will you commit to reviewing and reversing these policies, to support instead sustainable job creation and prevent the poorest from being the victims of global economic problems?
Go here to TAKE ACTION!
Today Lagarde meets with the IMF board following meetings with IMF officials and US Treasury Secretary Timothy Geithner yesterday. Although still a long-shot, Carstens may be buoyed somewhat by the news that Brazil may back him after all. Paulo Nogueira-Batista, Brazil’s executive director at the Fund was quoted as saying “Brazil may well decide to support Carstens”. More symbolic than anything (their chair commands 2.79% of the vote) it at least shows a willingness to express their grievances at the process with deeds as well as words and saves Carstens the embarrassment of not having the support of leaders from his own region. Nogueira-Batista continues, “this institution has a long way to go in undoing problematic governance structures … this [campaign] process has helped somewhat by highlighting the weaknesses”.
Domenico Lombardi, a former IMF board member pointed to the dilemma faced by many nations in voting for anyone else but Lagarde, saying that “in the end this person is going to be the managing director of the institution. There is really no sense in voting for somebody else when it’s clear who will win”.
Still looming is the French courts’ decision on whether to pursue legal action against Lagarde for accusations of abuse of office over a settlement between businessman Bernard Tapie and the French government. Recent reports suggest that an official under her ministry’s authority is too under investigation.
The IMF board will meet on June 28 to discuss the candidates, announcing the victor by June 30.
IMF Boss 