Economy

No agreement yet on new IMF chief

By Shamim Adam (China Daily)
Updated: 2011-05-23 10:11

Their failure to follow such calls with action probably highlights the political immaturity of the BRICS complex even when "the case for the new IMF head to come from the BRIC countries is increasingly strong," said Jim O'Neill, who created the BRIC term and chairs Goldman Sachs Asset Management in London.

Former Brazilian central bank chief Arminio Fraga, one-time South African Finance Minister Trevor Manuel and Indian policy maker Montek Singh Ahluwalia are among the emerging market representatives capable of leading the IMF, according to the fund's former chief economist, Simon Johnson. He also suggests the possibility of Bank of Mexico Governor Agustin Carstens and Zhu Min, a former Chinese central banker now working at the IMF.

"The big political question is whether the largest emerging markets - Brazil, China, India, South Africa, Turkey and perhaps Saudi Arabia, South Korea, Russia, Indonesia and Mexico - can unify behind one candidate," Johnson wrote in a May 18 Bloomberg News column. "That would be a breakthrough but it's still not clear who will provide the diplomatic initiative to organize them into a coalition that speaks with a single voice."

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The Chilean government said on Friday it has a "good opinion" of former Finance Minister Alejandro Foxley as a possible candidate and will consider nominating him.

US Treasury Secretary Timothy Geithner has refrained from mentioning any names, insisting in a statement he wants a quick decision on a candidate who can command broad support.

"We are consulting broadly with the fund's shareholders from emerging markets, as well as advanced economies," Geithner said. "It is important that this be an open process and one that moves quickly to select new leadership for the IMF."

Shen Jianguang, a former IMF economist and now at Mizuho Securites Asia Ltd, said in a Bloomberg Television interview that one option is to promote Zhu Min the first deputy managing director, to the IMF's No 2 position.

"Zhu Min definitely can be a deputy CEO of the IMF" given the growing importance of China in the world economy, he said. "Emerging markets are not very happy with the situation that the head of the IMF has to be from Europe."

Lipsky's term

John Lipsky, 64, is acting managing director after Strauss-Kahn's resignation four days after his May 14 arrest in New York on charges of attempted rape and sexual assault. Lipsky's term in the IMF's No 2 post, which has traditionally been filled by an American, ends in August.

The biggest emerging economies have focused on increasing trade and financial links among their nations. The state development banks of the BRICS countries agreed to help boost the use of local currencies when making loans within the five nations, Indian Prime Minister Manmohan Singh said last month. While early signs point to Lagarde, the mood could swing in the weeks to come.

"The US and Europe should take it upon themselves to really open this up to all candidates that are qualified, not necessarily just Europeans," the Philippines' Finance Secretary Cesar Purisima said in a Bloomberg Television interview.

Bloomberg News