New Delhi: French finance minister and leading contender for the top job at the International Monetary Fund (IMF), Christine Lagarde, on Tuesday said she is committed to working towards ensuring greater representation for emerging market economies such as India in the fund commensurate with their growing financial clout.
Lagarde is in India to canvass support for her candidature as the first woman managing director of IMF. She will be followed on Friday by Agustin Carstens, the Mexican central bank president, the only other candidate for the post.
Traditionally, Washington-based IMF has been headed by a European, while the World Bank, also based in Washington, has been led by an American, since the institutions were set up in the mid-1940s.
“Critical reforms that have taken place in last three years is an improved representation of countries that are under-represented,” Lagarde said after meeting Prime Minister Manmohan Singh, finance minister Pranab Mukherjee and deputy Planning Commission chairman Montek Singh Ahluwalia.
“Clearly, China and India are massively under-represented. For India to be properly represented, we will have to increase its quota by 40% and its voice by the same amount,” Lagarde said when asked what she would do to increase the say of developing countries such as India in IMF.
Earlier in the day, Mukherjee told reporters that India has not given any assurance to Lagarde regarding India’s backing for her candidature. The last date for filing nominations for the post is 10 June. The selection of a new IMF chief is expected to be announced by 30 June.
“There is no assurance (on supporting Lagarde). India wants the election of the managing director of the IMF to be on the basis of merit and competence and to be held in a transparent manner and not on any particular nationality. There should be a consensus,” he said after his meeting with Lagarde, who will be visiting China on Wednesday and Lisbon for a meeting of African finance ministers and central bankers on Friday.
India and other fast-growing emerging economies such as China, Brazil, Russia and South Africa (BRICS) had expressed reservations about a European again heading the IMF top job left vacant by the resignation last month of Dominique Strauss-Kahn. He had quit following charges of sexual assault on a New York hotel maid.
The demand for an IMF head from an emerging market economy reflects the churn in many multilateral organizations where these nations have been aggressively seeking greater representation for themselves following the 2008-09 global slump that crippled once-powerful Western economies. In IMF, BRICS has a vote share of around 15%, the US about 17%, and the Europeans nearly 35% at present.
But BRICS countries have so far been unable to come up with a common candidate. Mexico’s Carstens visited Brazil last week but did not get a clear backing for his candidature. There are also reports that South Africa could nominate former finance minister Trevor Manuel for the post.
“It would be difficult to say at this moment (whether there will be any common candidate from the BRICS countries) because there was divergence of views in respect of the South African candidature. So it is not possible to say whether there will be a common candidate or not,” Mukherjee said.
On India supporting Mexico’s Carstens, Mukherjee said he is “a competent person. We are also in discussions with them”.
According to French officials, the Chinese have promised to back Lagarde, though the Chinese executive director at IMF, Jianxiong He, was a signatory to a letter along with other BRICS countries seeking a non-European for the job.
But Biswajit Dhar, director general at Research and Information System for Developing Countries, a think tank, said he did not see the possibility of emerging economies putting up a common candidate.
“There are a number of contenders from the emerging countries,” said Dhar, “but there has been no discussion or coordination among them to put up a common candidate. At the same time, developed countries have a clear succession plan worked out.”
Lagarde invoked India’s close relations and strategic ties with France, saying she had been received very warmly by her Indian hosts. When asked if she would support a candidate from a country in the BRICS grouping for the No. 2 slot, Lagarde said: “Why not?” adding that the selection process should be based on skill and merit.
PTI contributed to this story.