Lagarde with Henry Rotich, Kenyan finance minister
IMF boss Christine Lagarde concludes a trip to Africa trip on Friday, continuing her tradition of starting the new year visiting one of the world’s fastest growing continents. For 2014, she chose Kenya and Mali, two very different economies on either side of Africa.
Just when the wait in the Argentine-holdout debt battle was getting wearing, enter the IMF with to add a controversial twist to the saga.
On Tuesday, its board will be discussing whether to wade into the argument.
The past year was a difficult one for many Arab countries undergoing historic political and economic change – Egypt, Jordan, Libya, Morocco, Tunisia and Yemen. The environment is challenging, but the underlying hope remains the same – a new society based on greater openness, greater opportunity and greater equality, writes Christine Lagarde, managing director of the International Monetary Fund, in the FT .
The first building block of a more inclusive economy must surely be macroeconomic stability. Unfortunately, this has come under threat in some countries – from slowing global growth, growing social tensions and rising political pressures.
Agustín Carstens arrives in Argentina on Friday, the latest stop on his charm offensive to drum up votes for his candidacy as IMF chief over that of France’s Christine Lagarde. Is it doomed?
Argentina is likely to be very polite – Carstens, the Mexican central bank chief, is a fellow Latin American and Argentina hates nothing more than being told what to do by developed countries it sees as too ready to spout the very orthodox economic ideas it believe led it to ruin.
But that’s the problem with how they see Carstens – his Chicago Boy background and orthodox outlook on some questions jar.
When Christine Lagarde, the French finance minister, capped off her whirlwind visit to Brasília on Monday with a press conference, she announced she would be speaking in French and English followed by a translation into Portuguese. A Brazilian journalist loudly interjected that this was Brazil and there should be a simultaneous translation into Portuguese, which was after all the mother tongue here.
The episode was a small illustration of the assertiveness of the new Brazil. It is this increasing confidence in Brazil of its role on the international stage that led Ms Lagarde to make Latin America’s largest economy the first stop on her tour of the world’s emerging markets to gain support for her bid to become the next managing director of the International Monetary Fund. If she can win over Brazil, she will gain credibility for her campaign among other emerging markets.
Kazakhstan has admitted that there is little chance of an emerging markets candidate being chosen to head the International Monetary Fund unless the current voting set up is reformed. But if developing countries unite to press for change they will have a fighting chance of winning the top job in global finance when it comes up for grabs again in five years.
Grigory Marchenko, the head of the National Bank of Kazakhstan , was nominated last week as the CIS candidate to head the IMF, but he believes his chances of getting the job are slim.
Agustín Carstens, governor of Mexico’s central bank (bottom row, second from right), is confident the Bric countries will back him as the next IMF managing director.
But beyondbrics is not so sure. First, because support from the rest of Latin America has been luke warm. More importantly, we just can’t see the Bric countries – and when it comes to taking decisions, that means China – preferring to negotiate with Carstens rather than Christine Lagarde. (Placed above Carstens in our picture. Coincidentally.)
Since Mexico’s Agustín Carstens threw his sombrero into the ring in the contest to succeed Dominique Strauss-Kahn as the head of the International Monetary Fund, the international response has been underwhelming.
To see the challenge now faced by any emerging market candidate for the IMF job, just look at the odds.
Christine Lagarde, the French finance minister who is backed by most of the European Union, has streaked so far ahead that she is the odds-on favourite, on 1/10. South Africa’s Trevor Manuel, The top EM runner is in second place – but on 10/1. The rest are out of sight, according to bookmaker Paddy Power.
No sooner has the debate begun on an emerging markets candidate, than it looks to be over.
Angela Merkel on Wednesday openly declared her support for a European to succeed the disgraced Dominique Strauss-Kahn as managing director. And she did so in terms designed to cut short the discussion – saying DSK’s early departure was an argument for appointing another European.
No delicate talks about merit, experience or CV. Buy Christine Lagarde, France’s finance minister (pictured) and Europe’s strongest candidate. Sell the rest.