France’s candidate to head the International Monetary Fund was in Brazil this week to drum up support for her bid, but her hosts are still on the fence about whether to back the European candidate or throw their weight behind a contender from the developing world.
French Finance Minister Christine Lagarde is seeking to replace her compatriot Dominique Strauss-Kahn, who resigned as IMF managing director earlier this month after he was arrested for sex crimes in New York.
But Ms. Lagarde faces reticence from up-and-coming nations such as Brazil, who feel the Europeans have controlled the fund for too long.
Brazil, along with other emerging nations such as China and India, is pushing hard for more of a say in global governance. It wants a seat on the UN Security Council and widespread reform of agencies such as the World Bank and IMF.
Brazil believes that as one of the world’s fastest growing nations – and one relatively untouched by the global economic crisis – it deserves more power.
Under charismatic president Luiz Inácio Lula da Silva, Brazil played a leading role in world trade talks and in took the lead in recent climate change negotiations. Its troops head the UN peacekeeping mission in Haiti.
Although Lula – as he is widely known – left office in January, his successor also feels Brazil deserves more power. But she has yet to declare support for either Lagarde or her main rival, Mexican Finance Minister Augustín Carstens.
“This episode shows the limitations of the alliance that Brazil is seeking to develop with India and China in the emerging world,” says Oliver Stuenkel, an assistant professor in International Affairs at the Fundação Getúlio Vargas, a leading business school. “Any candidate the BRICS countries chose would have had widespread support in the developing world but they failed to do that and it shows it is very difficult for the emerging world to find a common denominator.”
“It was smart, picking a woman," says Mr. Stuenkel. "It shows that the Europeans and Americans were more agile and flexible. They quickly said this is the right person and Brazil was unprepared.”
Lagarde promises 'diversity of members'
After meeting with finance officials in the capital, Brasilia, Ms. Lagarde said she fully understood Brazil’s thinking and sought to position herself not as the candidate of old Europe, but of all nations.
“If I was elected, I'd make sure that the diversity of members is represented at all levels,” Lagarde said, adding that she would continue with and “deepen” ongoing reforms.
Under plans announced in 2008, Brazil’s participation in the IMF will go from 1.4 percent to 2.3 percent by 2012. Discussions about revising those quotas further are ongoing, according to the Brazilian government.
Brazil keeps cards close to chest
After Monday’s meeting, Brazil’s Finance Minister Guido Mantega gave no clue as to how his government might vote. But he was adamant that reforms are unstoppable.
“What Brazil wants is that this philosophy of the International Monetary Fund be continued by the new director general and that the established reform plan be met,” he said.
The IMF hopes to name a new managing director by June 30.