Who’s your international money on?

Emerging markets have wasted their chance to come together to challenge Europe over IMF leadership

Even if Agustín Carstens is selected by the International Monetary Fund by the end of the month to become the organisation’s new chief, the celebrations would be muted. Developing countries would have been able to hold a louder party if they had rallied around a single candidate.

In the shortlist run-off the IMF is considering at the moment, Christine Lagarde holds all the aces. Amongst the cards in the French Finance Minister’s hand are the fact that she has a steady domestic economic record; she has been at the heart of the EU as it has tried to stabilise itself; and she is a woman. Mr Carstens has a reputation as a pragmatist and is currently the governor of Mexico’s central bank. He is also in a strong position as he is from a country that is outside the cosy club of economically powerful nations but still inside the wider G20 grouping.

This battle could be billed as a ‘First Division Lagarde v Second Division Carstens’ match. The leading First Division sides have all leant their support to the fellow top-flighter but, crucially, other teams in the lower leagues have not be able to decide whom to back. And even now that Mr Carstens has been selected for the play-off final he is short on patronage. He has had a lot of training and experience but this is a fight in which the judges concentrate on the strength and number of your seconds and supporters outside the ring, rather than simply the calibre of the pugilist in the ring.

Mr Carstens should be able to land a few punches on Madame Lagarde. She is representing the eurozone, an economic region plagued by budget deficits, cross-border bailouts and raging disagreements over defaulting and restructuring. But so far she has used her nous and charm and been able to dodge the weak attempted jabs. Mr Carstens would be in a much stronger position if developing nations had whole-heartedly plumped for him in the first place.

Dominique Strauss-Kahn, (a man from the cosy club), has been unceremoniously dumped from the throne of the world’s piggy-bank and this is a chance to engineer a shift away from what has been perceived as the natural order of things – having a European leading the IMF. This ought to be an opportunity to deliver a positive window to the emerging markets from which they could challenge other nepotistic hierarchies, (such as always having an American run the World Bank), but the lack of organisation points towards a defeat.

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