May 26th, 2011
03:26 AM GMT
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Hong Kong, China (CNN) – So the gloves are off.

The four BRIC countries plus South Africa have joined forces to oppose the automatic choice of a European as head of the IMF.

This is significant step.

For the first time there is a unified voice from the emerging world to match the voice of Europe, now rallying behind French Finance Minister Christine Lagarde.

From a gaggle of un-coordinated statements from emerging economies over the past two weeks, comes a crystal clear - and powerful - voice.

A message jointly signed by China, India, Brazil, Russia and South Africa. They wrote: "We believe that, if the Fund is to have credibility and legitimacy, its Managing Director should be selected after broad consultation with the membership. It should result in the most competent person being appointed as Managing Director, regardless of his or her nationality. We also believe that adequate representation of emerging market and developing members in the Fund's management is critical to its legitimacy and effectiveness."

But the ball is still in their court. The next step is a candidate the emerging economies can rally behind.

And reports are now coming out, quoting unnamed Indian officials, that a candidate could be named in the next couple of days.

They will have to be quick. June 10 is the closing day for nominations and that candidate needs support from across the emerging markets spectrum, not just the five mentioned but emerging powerhouses like Turkey and Indonesia as well.

If the emerging markets are serious about challenging the status quo - and they are giving every intention that they are serious - they have to have a single candidate. Without one a European candidate will likely breeze through.

A lot will depend on the response of the U.S. The acting chief at the IMF, American John Lipsky, has already said Ms Lagarde would be an "excellent" choice. To be fair, he may also say that about others too. The U.S. remains silent but if history is a guide it will put its weight behind Europe.

Ian Bremmer, chairman of the Eurasia Group, told WBT that he has no doubt the U.S. will support Europe. Remember, the U.S. gets support from Europe for having a U.S. citizen at the head of the IMF's sister institution, the World Bank.

But whatever happens, history has already be made. Five powerful emerging economies have spoken in one voice for change. Ignore China, India, Russia, Brazil and South Africa at your peril.

soundoff (34 Responses)
  1. gamblelife

    First fix your roads, infrastructure, power problems, petty criminals and then we can think of giving the job of giving the money to other countries.

    May 26, 2011 at 4:55 am |
  2. Chirag

    Interesting situation for USA : One hand, US can not ignore history of europen support on Internationale issues. Other hand ; can not ignore future powerhouse india and china. However, one thing is clear here that previous IMF head were soft to there respective continent. If so it's SAD.

    May 26, 2011 at 5:19 am |
  3. Vinod Bhan

    When ever there is a change, there is a resistance to that change. It requires huge maturity of purpose and mind to be able to accept the change without any hiccups. The world economic order has changed and so should the mind-set. West can't ignore the dream of more than half the population of the world. Such a huge chunk of people want to demonstrate their voice on every stage, and if they are competent then why not give them a chance.

    May 26, 2011 at 6:24 am |
  4. Mário Costa

    Finally, the emerging countries are standing up as one to make their voices heard. A similarly thing could have happened in the case of Lybia, where an effective intermediation from the developing countries could have eased if possible prevented airstrikes from the west. This serves to prove that balance is definitely needed.

    May 26, 2011 at 7:25 am |
  5. H. Steven

    Quote: First fix your roads, infrastructure, power problems, petty criminals and then we can think of giving the job of giving the money to other countries......You are referring to the developed nations, right?

    May 26, 2011 at 8:54 am |
  6. Rock

    And what u? U have made roads but don't have jobs and Obama is roaming around the world to beg for jobs and protests r soaring in many EU nations as well. In US, Americans themselves r not getting justice when they r scammed from someone inside America, And the reason what they get from Police department is–Sorry,lack of manpower. Ridicluous.
    So called 'developed countries' r losers in this new age.

    May 26, 2011 at 10:22 am |
  7. Rock

    And by the way, did world business today', show the news of Indian PM's Africa tour and Indian investments there? I think,NO.
    It seems that as CNN's Asian bureau is located in Hong kong, so CNN is forced to praise China. or may be they r getting money from Chinese government to do this. And that's why their Hong Kong office keeps finding chances to exaggerate Chinese economic influence–by hook or by crook.

    PS: I don't care if my post will not be posted here. what i think,i have already written for CNN itself.

    May 26, 2011 at 10:28 am |
  8. NewGBush

    Europe thinks it owns IMF! If BRIC could pull out of IMF and support their own BRIC Fund, or some other Fund that include Asia, Latin America and Africa. Then IMF becomes a Euro-US Fund.

    May 26, 2011 at 10:47 am |
  9. karthick

    @Gamblelife : And how did u fix these problems....of course by plundering wealth from the very same countries that have been branded as "developing countries" shut up and stop dishing out nonsense :)

    May 26, 2011 at 10:56 am |
  10. naras1938

    IMF has earned a "tremendous reputation" over the past 30 years; its conditionalities to revive faltering economies all round the globe have proved to be worst disasters with their "one cap fit all" prescriptions. The men in charge in IMF have no idea whatsoever about the problems faced by the developing world OR evn the developed world – see the issues facing Greece, Spain etc., There is no inviolable rule that the IMF must be headed by an European & that the WB must be headed by an American. For both these Institutions, the best candidate – regardless of gender, nationality or colour – must be chosen.

    May 26, 2011 at 11:54 am |
  11. Kyle H. Davis

    gamblelife: I could not have said it better myself. – China is really starting to try to force its way into the global scene this way. The only problem is, even thought it has the second largest economy, the Per Capita GDP is still lower than that of Cuba. – Equating a fast growing economy with "financial intelligence" is simply inaccurate. China's growth is from a self serving manipulation of the Yuan, to cut out competition. It's 3rd grade economics... not what I want in the IMF.

    May 26, 2011 at 12:19 pm |
  12. SuperJase

    If funny how BRICS want to increase their influence in the IMF but contribute very little. They contribute about 4%, the same as the UK while the US donates over 17% and is by far the biggest contributor. You want more power then start to contributing more otherwise go and whistle.

    May 26, 2011 at 12:23 pm |
  13. James

    The IMF is not a democracy. Its job is to protect against balance of payments crises, and it does that by maintaining a fund that it can use to assist countries facing BOP issues. It has attracted controversy in recent decades by straying from its core mission and misguidedly involving itself in nation-building, but its core mission is strictly to make sure that the global system of payments runs smoothly and that there are no foreign exchange crises – this benefits us all. Contributions to the fund broadly match each country's share of world GDP, and voting rights quite understandably go hand in hand with the size of the contribution. Let's be honest – many emerging countries haven't even paid their current IMF quota subscriptions (and yet expect support when things go wrong), and the EU is still by far the biggest contributor to the fund, so I find it strange that BRICS leaders refer to a new world order. A new world order where advanced economies pay for most of the IMF but BRICS get to control the votes? Nonsense. Given the nature of the IMF's core mission, it is right and fair that voting rights match fund contributions and the size of respective economies. The EU and US will vote for Lagarde and that will be that. The day may come when BRICS economies outweigh the west, but it is not today. There are lots of people putting the cart before the horse here. The new world order should and will be recognised when, and if, it actually dawns.

    May 26, 2011 at 12:30 pm |
  14. adam xahir, maldives

    what will happen?

    May 26, 2011 at 12:57 pm |
  15. Shain George

    It is crucial for China to have a say on this, I believe. They are sitting on huge foreign currency reserves and therefore, China would like to see that its investments are safe. Whoever is going to be the head of IMF, China is looking forward to have a stricter fiscal control across the world for sure.

    May 26, 2011 at 1:09 pm |
  16. Juan Arias

    I agree that the election should not follow democratic principles. If you contribute 20% of the fund, you should have 20% of the votes. But where about to chose a political figure above many other more qualified candidates. Let's put President Bush on the tp seat of IMF?

    May 26, 2011 at 1:36 pm |
  17. Cyberbeing

    gamblelife, reading your comment one should assume that European and US roads are in good order eh, no port holes in New York, excellent infrastructure and of course excellent education.

    May 26, 2011 at 3:17 pm |
  18. European

    BRIC+South Africa – these 3rd world countries want to decide??? OMG! When I was in Inda, in Delhi they don't even have tap water and toilets, so they're (excuse me) sh*tting on the streets and the smell in Delhi is so disgusting, that I had an urge to vomit every 20m when I was walking on the streets – not to mention 100s of beggars on the streets I saw. When I was in Russia, I didn't see a single road that wouldn't look like motocross ring – and I was close to Moscow – I can't even imagine what's somewhere far east. The tap water in Russia is also not drinkable, and when you drink it you become ill. Millions of alcoholics in Russia and the average life span of males is around 55 years! China, a country with 1 billion slaves, with 0 research, only waiting what technology they can steal from the west. South Africa – they have the world's highest murder rate... And these looser countries want to decide about world finance?? Come on!!!

    May 26, 2011 at 3:25 pm |
  19. niti

    I don't think that BRIC cares much about IMF. This is a message to the US and Europe telling them that they have always kept the IMF to themselves, and not much has come out of it but problems. I think money invested in IMF is wasted anyways...BRIC has become rich without the help from IMF!

    May 26, 2011 at 3:45 pm |
  20. Sunil Weliwitigoda

    Prestige, Privilege, Power are never given up without a Fight. Those used to Crack, Cocaine, Opium cannot give it up either. But, there comes a time, just like the Roman Empire came to an end, the British Empire ran out of Steam, Europe lost out to America and like today, when America is loosing out fast to the BRICS. Things change, like England which ran the largest Empire in the world is today a Third World Country and the USA is fast becoming a Beggarly Emerging Third World Country from being a Sole Economic and Military Superpower country. It is so hard to give up what you have been so used to, what you have taken for granted. But give up you must, when the Time Comes. And the Time has come…….. Get used to It!

    May 26, 2011 at 3:59 pm |
  21. Alexis Weslyn

    James, above, seems to state the case well.
    Lagarde is an excellent candidate. It wold be difficult to find someone better anywhere. She is confident, effective, intelligent and learned. Her comprehension of Europe and North America is profound, as is her command of not only her native French but of English as well. That she is a woman is a big plus, too. She is someone who understands and can be understood.

    May 26, 2011 at 5:23 pm |
  22. Wow

    I agree that the voting should be as a percentage of what is paid in but it doesn't mean we have to insult developing countries that are striving to develop. I have been to all of the BRIC countries and find them to be nice in there own way so stop slamming them, just becuase a place is different doesn't make it bad. I agree that we should not turn the lendee into the lendor or you wil get something similar to the US housing market. I know that politics will decide who runs the IMF but one can hope that the most qualified person gets the job.

    May 26, 2011 at 9:02 pm |
  23. ThatsNotTrue:[

    @European, stop being racist, with a failed system in the US and UK, all you're doing is what the big propaganda machine want's you to do. Here are some facts, India is an emerging develping country whose "democarcy" is not working really well. Where do you even get your facts about Russia or did you went to the red light district or something. China does not have "1 billion slaves, with 0 research, only waiting what technology they can steal from the west" Most of the West's tech does not come from the West, Isreal actually, if you know where that is on the world map, I doubt that the US can invent anything without international students since the education system failed and more people are educated properly in China, beating the US. "they have the world's highest murder rate" you're talking about the US with it's many wars I presume since South Africa does not spend trillions in wars.
    &&&&& All these countries are beating the US and UK, not only in education but in all areas, complain all you want but that is a fact, why shouldn't they have a say when their part in the global world is increasing.....and they own US and propabily UK debt.
    & Calling them looser, you can't even spell right, I doubt you ever been in any of those places
    & I doubt that you're an european, they have less arrogance, my guess......let see........a tea party member?

    Now for my own opnion, they should have a bigger role, why? Globalization, if IMF, since the I stands for International, not "European" or American. BRICS should have a role since about 40% or more of the global population's in those countries to began with. And we've all seen how American deals with finances "borrow, borrow, borrow" but never pay anyone back, the UK is following the "American way" which is failing. The world needs an Asian way or an African way, any way but the way that led these countries to their current state who only know how to borrow, they need someone who will acually manage money, not spend, spend, spend. If a black president can change the US, why can't and Asian or African head change IMF?

    May 26, 2011 at 10:29 pm |
  24. Andrew

    With Failing economies of Europe and USA and concurrent double digit growth in India and China, the change in leadership is bound to happen. A decade from now, this planet will be a different planet altogether but do not know if its for better.

    May 27, 2011 at 5:33 am |
  25. Rajat

    The west is more developed as they worked hard for it some hundred years back fighting lack of natural resources and going out creating colonies. Asia would be equally or more developed in future because they are fighting hard now trying to shun the obstacles created by imperialism and remedying their infrastructure. The point is having a competent person for the job. And west for no reason can claim that their candidates would be better off then Asians in terms of their intellectual capabilities required for this job. If you dont agree go check the list of grades in any class in US or Europe which has international students from India and China. As a strange coincidence for you the Indians and Chinese would always be on top of those lists.

    May 27, 2011 at 7:18 am |
  26. JonesPapa

    Frankly, IMF aint the forum that should be aspired for!! Passes insignificant rants. To be fair to developing countries – the so called developed nations were once there. US was one of them a century ago; And given the growth rates of India and China – they too will qualify as a developed country in a few decades from now.

    May 27, 2011 at 9:50 am |
  27. Premangsu Chowdry

    The credibility of being above any bias or vested interest whatsoever are required in a top International organization like the IMF . It has been questioned time and again in the past,withouft any response, thus beginning the loss of some of its effectiveness. A new significantly strong emerging and united voice like BRIC , an economically strong mature group of countries from different continents and with vastly diverse backgrounds, but unified in their opinion on major economic and financial issues, cannot be ignored. . It will otherwise toll the bell for the IMF to lose its clout in the world. The credibility of being above any bias or vested interest whatsoever are required in a top International organization like the IMF . It has been questioned time and again withouft any response. augering the loss of its clout. A new emerging significant and united volice like BRIC , an economically strong group of countries from different continents and with vastly diverse backgrounds but unified in their opinion on major issues, cannot be ignored. . It will otherwise toll the bell for the IMF to lose its clout in the world.

    May 27, 2011 at 10:15 am |
  28. JOey

    US may be contributing 17% of the IMF fund but to ignore the voice of BRIC totally is not wise especially when that 17% of the contribution is based on borrowed money from one of the BRIC country – namely China. I do not believe the person wrote the comment about "you want more power then start contributing more otherwise go and whistle" will tell that to his banker

    May 27, 2011 at 10:52 am |
  29. Meth

    Europe must accept Asian superiority (India + China) – and submit their freedom and sovereignty as a payback if they want to have a normal future.

    May 27, 2011 at 12:05 pm |
  30. IMF Raj

    The old boys club finally wants to let a girl in when flames of change are at the doorstep. Good luck to all involved.

    May 30, 2011 at 2:07 am |
  31. Harsh

    @European- If u think the conditions in BRIC-S countries are so bad,then u should train urself to live in same circumstances since Europe and US Don't have anything left,other than relying on developing nations. Go and ask ur leaders what they think about this issue. U r able to eat yummy Pizza with extra cheese bcoz ur companies r getting jobs and contracts to remove same sh*t from the roads which u didn't like in India and China. U sound like a loser who has no way left other than bashing the ones who are the future of the world.

    May 31, 2011 at 10:27 am |
  32. Person not Country

    Just becomes someone comes from a developing country should not disqualify that person from heading a world body like the IMF. Don't we have very unqualified illiterate people in the USA and some top scholars in the globe from developing countries? Didn't Kofi Annan lead the UN even though he comes from a developing country in Africa? The point the BRICS are making is that we want the world to be more a a meritocracy – like the Olympics or the World Cup. The best person should win irrespective of gender, nationality or family background. It's that simple. Otherwise the BRICS are best advised to start a BRICS Fund and shut down the IMF in their countries.

    June 1, 2011 at 12:00 pm |
  33. DZB

    @Rock: This post is about the BRIC countries, not about what stories World Business Today ran on their show, so quit your bitchin'

    June 13, 2011 at 8:39 pm |

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