Emerging Nations Seek Non-European IMF Chief Every managing director of the International Monetary Fund has been a European. But emerging economic powers say it's time to open the job to others. Mexico's Agustin Carstens and Israel's Stanley Fischer have thrown their hats into the ring. But France's Christine Lagarde remains the front-runner.
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Emerging Nations Seek Non-European IMF Chief

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Emerging Nations Seek Non-European IMF Chief

Emerging Nations Seek Non-European IMF Chief

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The International Monetary Fund has been reeling since its last managing director, Dominique Strauss-Kahn, was arrested last month in New York. A new director is due to be chosen by the end of this month. As NPR's Tom Gjelten reports, the institution's reputation may have been tainted by the scandal, but there's no shortage of interest in the top job.

TOM GJELTEN: The head of Mexico's central bank, Agustin Carstens, was in Washington today but not to discuss his country's economic issues. He's a candidate to become the next managing director of the IMF, and he was here looking for U.S. support.

Christine Lagarde, the finance minister of France, is also running, as is Stanley Fischer, the governor of Israel's central bank. The candidates have been flying around the world in full campaign mode. Here's Christine Lagarde speaking last week to Al Arabiya, the Saudi-owned news channel.

Ms. CHRISTINE LAGARDE (Finance Minister, France): I am who I am and I come with my set of skills, background and expertise, which I think might be very successful for the job of managing the fund in the current circumstances.

GJELTEN: As the French finance minister, Lagarde has played a leading role in managing Europe's worst financial crisis in many years. But every IMF managing director since the Fund's creation has been a European; that's how the Fund creators envisioned it. The emerging economic powers say it's time to open the job to candidates from across the world.

That's why Agustin Carstens from Mexico is running.

Mr. AUGUSTIN CARSTENS: My participation in this process is inspired by the principle that we emerging markets have been claiming for many years that there needs to be open and transparent process.

GJELTEN: With Stanley Fischer of Israel throwing his hat in the ring last Friday, the IMF race has actually become sort of interesting. Among those following it is Arvind Subramanian, who worked for years in the IMF research department.

Mr. ARVIND SUBRAMANIAN (Peterson Institute for International Economics): This position has become contestable for the first time ever, and that's a reflection that the world is changing, emerging market economies have become bigger, and the world has recognized that institutions need to change to adapt to these changing realities.

GJELTEN: In theory. In practice, the global economy is still largely under the control of the big, rich countries. The United States and its western allies hold most of votes on the IMF board. And officials here say the United States and its allies will unite behind Christine Lagarde.

So, Moises Naim a former minister of trade in Venezuela, is not all that impressed that the selection of a new IMF chief has really become a wide open process.

Mr. MOISES NAIM (Former Minister of Trade, Venezuela, Carnegie Endowment for International Peace): There is a debate, there is a conversation going on, but the outcome is exactly the same as it was when it was done in a smoke-filled room without a lot of participation. That is, a European is going to be the next head of the IMF.

GJELTEN: Here's another reason: the rising powers, like China, Brazil, India, and Mexico, may all want a bigger voice in the global economy, but they still have their own interests - and apparently they're not yet ready to unite behind a candidate from outside Europe. Brazil is supporting Christine Lagarde. So is Indonesia, and many Arab and African countries.

Arvind Subramanian, now at the Peterson Institute for International Economics, says historical reasons may still be important.

Mr. SUBRAMANIAN: Brazil has been reluctant to support Mexico, because there are longstanding issues between Brazil and Mexico. I don't think very likely that the Chinese would have supported an Indian or vice versa.

GJELTEN: So, countries like Brazil and China are becoming more assertive individually but that does not mean they're ready to cooperate.

Moises Naim, now at the Carnegie Endowment for International Peace.

Mr. NAIM: What we have not yet seen is these countries acting together and shaping outcomes in a way that is defined by them.

GJELTEN: Some analysts think that China and Brazil and the other big emerging powers have not yet concluded that the IMF is so important to them that they care much who runs it. But the IMF still has a lot of power and there is at least one indication the institution still matters to someone. The Fund last week reported it's been the target of a major cyber-attack, and the current thinking among security experts is that some nation state has been trying to get access to secret IMF data for its own national purposes.

Tom Gjelten, NPR News, Washington.

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