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”.
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.
Carstens’ presentation to the IMF board reads like a power play in challenging the legitimacy of the Fund and their commitment to a transparent and merit-based selection process.
Lagarde will no doubt benefit from Carstens’ statement being made public before she meets with the board on Thursday. Still, Carstens sure to have the Lagarde camp working overtime produce a convincing declaration of her suitability for the post.
It started in May with an eight page curriculum vitae of sorts in which he spelled out why he should get the job, starting:
To facilitate the transparent and merit-based selection process, I hereby offer an overview of my professional background; economic policymaking record; managerial and diplomatic skills, with particular attention to multilateral cooperation; understanding of the Fund and the policy challenges facing the Fund´s diverse membership; and, in closing, my strategic vision for the institution.
Long-time readers of the blog will no doubt be interested to see how it compares to the candidate assessments offered by some of his critics…
Throughout there are digs at the European stitch up such as: “we need a Managing Director who can best serve all of the member countries, not merely those experiencing challenges at one particular point in time.”
We had a pretty good idea already but yesterday the IMF board made public the interview dates for each candidate. Carstens will meet the Board today whilst Lagarde will have her interview on Thursday the 23 June. The statement reads:
During their informal meetings with the Board, each candidate will present their views on issues facing the Fund and the membership, and the Executive Directors will be able to exchange views with the candidates. Candidates’ statements will be published on the Fund’s website following these meetings.
We look forward to reading them.
The Board will review each candidate next week and make a final decision by June 30.
Lagarde left for Washington with a box chocolates and best wishes from her European counterparts. Not that she needs the luck, I mean, they’ll be voting for her either way, right?
IMF Boss 