June 14, 2011
Photo: AP
Agustin Carstens, president of Mexico's Central Bank (file photo)
The race to become the next head of the International Monetary Fund is now officially a two-way race after the IMF board disqualified the Bank of Israel's Stanley Fischer on Monday. Analysts say French Finance Minister Christine Lagarde is favored to win. But rival candidate Agustin Carstens of Mexico disagrees.
He is considered a long shot, but the governor of Mexico's central bank insists he is the best candidate for the IMF's top job. Besides a 30-year career in global economics, Agustin Carsten told policymakers in Washington that his outsider status gives him greater perspective on issues facing the global banking institution's 187 member countries.
"Also, it would be an advantage from the point of view that the fund would not be perceived of working in a biased way in favor of Europe," Carstens said.
French Finance Minister Christine Lagarde is widely seen as the front-runner to replace Dominique Strauss-Kahn - who resigned last month after being charged in New York with sexual assault.
Despite her own admission that Europe's debt crisis must remain the immediate focus of the IMF, Lagarde says her background has little to do with her candidacy.
"Being a European should not be a plus. It should not be a minus either. And I'm not arguing for my candidacy because of the fact that I'm a European or because I've been engaged in setting up those financial institutions that have helped in the bailouts that we've put in place," Lagarde said.
Emerging markets are pressing for greater say in running the IMF. Lloyds Bank economist Trevor Williams says a Lagarde appointment could be seen as a cozy arrangement between the U.S. and Europe.
"The weakness would clearly be that this may be seen as just another French succession to the head of the IMF, as if the deal is still the case between them and the U.S. to share the two key global positions," Williams said.
The top job at the World Bank has traditionally gone to an American, with a European typically named to head the IMF. But besides possibly becoming the first woman to lead the 65-year old institution, Lagarde has the best resume, says analyst Sabina Dewan at the Center for American Progress.
"I think it's important moving forward that the head of the IMF, the managing director, be chosen on the basis of merit, not nationality. But I think for the moment it's important to get someone in there that is capable, that is ready and Christine Lagarde definitely fits that bill," Dewan said.
The IMF disqualified 67-year old Israeli bank economist Stanley Fischer on Monday due to his age. IMF rules say first time managing directors must be under 65.
Now that it is a two-way race, Carstens is claiming the advantage over Lagarde, saying his candidacy carries fewer question marks.
"I'm sure she will say that she's working for the fund and not for the European Union, but still that question mark will be there and she will have to demonstrate something that I probably would not have to demonstrate," Carstens said.
The IMF's executive board is expected to choose its next director by June 30.
The U.S. holds a large majority of votes at the IMF, but has not announced which candidate it favors.