May 25th, 2011
05:27 PM GMT
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‘I have decided to present my candidacy. I did this after an agreement with the President and Prime Minister of France. I have received a number of phone calls from countries supporting my candidacy.’

It took Christine Lagarde seconds to deliver these three sentences.

In doing so, she solved a puzzle that had press and politicians occupied for days: would she run to replace disgraced compatriot Dominique Strauss-Kahn as managing director of the International Monetary Fund?

But Lagarde’s decision to throw her hat into the ring raises more questions than it answers. It has also unleashed a ‘Battle Royale’ between ‘old and new world’ superpowers for control of the institution charged with managing the global economy.

Europe and the United States have traditionally dominated the top positions at the IMF and the World Bank. France has provided 4 of the 10 past MDs at the IMF, since its founding in 1945.

However the world’s emerging markets now want more of a say.

In anticipation of Lagarde’s candidacy today, IMF representatives from the world’s BRICS countries (Brazil, Russia, India, China and South Africa) released a statement saying Europe’s stranglehold over the most senior position undermined the fund’s role.

In an open letter, the BRICS called for a leader to be chosen on merit, not on nationality.

While saying the future MD should have solid ‘political acumen,’ their choice of words was a far cry from the more opaque diplomacy we are used to hearing from such top brass.

Lagarde certainly made her move at the right time.

Today British Prime Minister David Cameron holds talks with U.S. President Barack Obama. And with the eurozone lurching back towards a crisis combined with the West’s reluctance to relinquish its control at the helm of the IMF, you can bet the topic of Strauss-Kahn’s succession will be high up on the agenda.

The subject is likely to be revisited in Deauville at the end of this week when heads of the world’s eight most industrialised nations hold their twice-yearly summit.

The bloc-otherwise known as ‘the G8’ is no stranger to France nor is it unfamiliar with the country’s new IMF candidate. France actually created the group (albeit with two fewer members) back in 1975 to respond to the oil shock. Lagarde was actually the first woman finance minister among G8 nation in 2007.

But is Lagarde the best person for the job?


Below I lay out the ‘pros’ and ‘cons’ of her candidacy, as I see them:

1) PRO: She’s Qualified:

Economists and politicians alike agree that Lagarde certainly has the credentials to run for MD. She enjoys the support of Britain’s Chancellor of the Exchequer George Osborne and the German Chancellor Angela Merkel, among others, as a preferred candidate for the post. Even Silvio Berlusconi, Italy’s charismatic Prime Minister, has backed her.

2) CON: She’s French:

However, they also concede that her nationality –being French-could work against Lagarde as much as run in her favour.

· One IMF economist told me this week: "Some have argued that a European should run the IMF because of the eurozone crisis. But others here would disagree. Perhaps a candidate from the emerging markets would be more neutral and take a stronger stance on issues such as Greece, which are very unpopular here."

3) CON: She’s Facing a Probe:

· Sophie Pedder, Paris Bureau Chief of The Economist magazine, told me that Lagarde may have to overcome a judicial review of her handling of a settlement between prominent French businessman Bernard Tapie and the state. In an interview with CNN’s Jim Bittermann in Paris today, Lagarde rebuffed such suggestions.

4) PRO: She’s a Woman:

· Emails obtained by CNN show some female employees at the IMF have called for a woman at the helm. Private economists agree.

· Jens Larsen of RBC capital markets says: ‘I certainly think a female head of the IMF could be a good thing.’ Larsen continues: ‘Internally I think it’s a good thing to have a different perspective and externally I think it would project the right image.’

5) CON: She’s a Politician:

· Economists within the IMF tell me they are concerned about an institution of such monumental importance being held hostage to candidates’ future domestic political ambitions. The question of ‘why’ Christine Lagarde wants the job will almost certainly be one of she’ll have to answer to the fund’s executive committee, when she’s summoned to Washington for interview. For the moment though it’s certainly got economists from both inside and outside the IMF guessing upon her motives.

· RBC’s Larsen says: ‘I’m really keen to see the IMF getting someone who is committed to the organization and to the IMF’s cause, which is also to provide assistance to countries that are sustainable.’

· Larsen says what really concerns him is ‘when it comes to politicians they tend to be focussed not so much on the organization and more on what they are going to do next.’

Lagarde will qualify as a candidate but whether she gets the job will depend less on what’s on her resume and rather on the political power play that her candidacy will generate.

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soundoff (19 Responses)
  1. Terry P

    She's been after the job for years. It needs to go to someplace else and not stay in France.

    May 26, 2011 at 5:59 am |
  2. Christy X

    She seems like a great candidate. Plus she doesn't seem like the type that would run naked chasing after the maid in a hotel suite.. then again, you never know..

    May 26, 2011 at 7:47 am |

    Why not? Because she's French? Sounds like discrimination. Let the best woman/man get the job, period.

    May 26, 2011 at 7:57 am |
  4. Elsie

    Is she really best qualified? She is from legal background, she is NOT an economist – she will look at legalities first – not ideal in my view.

    May 26, 2011 at 10:01 am |
  5. akka69

    I completely disagree with point 5).
    She's teh current french minister of economy, but many people here think she's not "political" enough.
    She's rather perceived as acompetant but she has made several gaffes in the past due to a technical, rather than political, approach to economy.

    Besides, she lacks the charisma that most politicians have.

    May 26, 2011 at 10:12 am |
  6. Valerie M

    She's a minister, yes. However I would not call her a politician in that sense that she's never run an election (from what I know). Her strength and her leadership come from her presence qnd from her ability to stay focused on the job.

    May 26, 2011 at 10:37 am |
  7. adam xahir

    i think she is good for imf

    May 26, 2011 at 10:47 am |
  8. adam xahir, maldives

    yap, she seems like a great candidate,

    May 26, 2011 at 10:49 am |
  9. BasD

    Lagarde is the best choice. She is extremely capable and a European on that position is much needed as the EU is heavily under pressure. I also find the stand of the 'new world' (I hate this expression but okay) on this matter somewhat annoying and lacking any self-reflection. How can you seriously make such a demand when the contributions that they make towards the IMF are absolutely minimal ?

    May 26, 2011 at 10:55 am |
  10. yamlal Aryal

    why all the time European people have to be chosen as the chief of IMF. It has to be come from BRIC block or some other country this time. we all know that the organisation needs to be revamp and more focused on helping the less developed country rather to be more political focus on it.

    May 26, 2011 at 11:07 am |
  11. lal

    Well its not that Europe's psuedo protectionist policies and double standards towards global trade are going to see any changes irrespective of who is the chief.

    So why not allow her enjoy the feat.

    May 26, 2011 at 11:47 am |
  12. Matthew

    Given your two pros, you basically said she will only get the job because she is a qualified woman... Why not point out her work with a U.S. Politician which shows her ties to the U.S. (which could carry support/backing) and her foriegn affairs experience? Also, while China may have been part of that BRICS open letter, what they truly don't want is an American in the position. With the current acting IMF head, they will be more inclined to support her in exchange for somebody from BRICS taking his seat. Additionally, the acting IMF head has already mentioned seeking retirement prior to this scandle, so it ends up a win-win.

    May 26, 2011 at 12:01 pm |
  13. nedyfe

    I think she should get the post because she is tall and has white hair!

    May 26, 2011 at 3:53 pm |
  14. angel5

    I guess this is just the better alternative or choice if she had been an expert on her field of expertise, thus, i believe there`s no difference who will take over, regardless of race yet COMPETENCE is definitely a must!!! there are lots of problems facing the world than pufferring the IMF wt such scandals and non-irrelevant subjectsfor the whole mankind to deal with. Reduce your world debt interests to the third world countries should be the priority of this institution..a loaned third world countries forests, etc?????????

    May 26, 2011 at 4:02 pm |
  15. E12

    I think she should not get the job. I dont doubt that she is qualified. However her French background will mean that she will look out first for French interests, then European( and British) interests and then if she gets the time, she might just give other parts of the world consideration. This will also happen if other European/British/Russian gets the job. No I think the job should go to someone from Latin America, Africa of Asia because of the reason stated by the author of this article.
    'Perhaps a candidate from the emerging markets would be more neutral'
    Therefore as someone looking in from the outside they can be more objective when doing this job and also help to further the cause of non white countries in general. Also I know Lagarde is qualified to do this job. However are you telling me that no one from other parts of the world are qualified economists. Please give me a break. Also the author of this article says that Lagarde has been endorsed by the likes of George Osborne and silvio Berlesconi. R U F***ING SERIOUS. You mean more like the kiss of death. Those guys should not be running bath water, never mind running countries. And finally, should not the IMF show a bit more maturity. After all if the Americans can elect a non white man as president cant the IMF appoint someone from a part of the world that is not white. It would show that this institution can appoint someone who is not white to do the job and who can do a good job at it, and that the IMF is moving with the times. Or is this institution still clinging on to its old ways which will threaten to make it more irrelevant than it already is.

    May 26, 2011 at 4:10 pm |
  16. Lala

    You gotta be kidding me. No one in the BRICS countries is capable of running the IMF. And then, they will use it for their own benefit and work against the Western countries. These countries are all corrupt, at least Europeans will make sure the IMF benefits ALL.

    May 26, 2011 at 10:08 pm |
  17. Guest

    We need open and transparent selection process, each IMF member country should recommend 1 or 2 qualified candidates for the job, by posting candidate’s bio and resume on the web. Then the IMF Panel Member should conduct interview in an open forum...then they should select the best candidate based on qualification in a secret ballot. Let’s not follow Apartheid Selection Process…enough is enough

    May 27, 2011 at 1:45 am |
  18. Michael

    Really? These are the pro/cons? It's said that she's qualified, but what evidence does this article point to – that Osborne, Merkel and Berlusconi like her.
    The alleged contemptible acts by Strauss-Kahn notwithstanding, his move to take the IMF away from the 'Washington Consensus' was a good thing. They rob countries of exactly the policies that they need to get out of the dire straights that they find themselves in. We need a new philosophy at the IMF, and while Lagarde seems like a perfectly decent person, I don't think she has the vision that the IMF needs.

    May 27, 2011 at 4:49 am |

    I do think so.

    May 31, 2011 at 8:34 am |

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