Lagarde set to get India's support for IMF top job

While maintaining that merit and not nationality should guide selection of the new International Monetary Fund (IMF) chief, India will in all likelihood support French Finance Minister Christine Lagarde for the job.

Lagarde, on a day’s visit to India, met Finance Minister Pranab Mukherjee today and got a favourable response. Mukherjee said he would even talk to Mexico’s central bank governor, Agustin Carstens, to dissuade him from contesting and build a consensus around Lagarde. He told Lagarde the selection should be through consensus.

When the post had fallen vacant and Lagarde, backed by some European countries, announced her candidature, government representatives had said it was time to end the practice of reserving the post for someone from Europe.

According to sources, Mukherjee today told Lagarde that New Delhi “appreciates” her credentials.

However, publicly, he said, “There is no assurance. We are working on a consensus.” Lagarde said, “We had an excellent meeting. We were able to review quite a few issues.”

Lagarde also met Prime Minister Manmohan Singh and Planning Commission Deputy Chairman Montek Singh Ahluwalia.

New Delhi’s decision to support Lagarde is based on the fact that India enjoys good relations with France, a major power in Europe.

Mukherjee told Lagarde, “When I was the finance minister in 1982, IMF was headed by a French person. When Prime Minister Manmohan Singh was the finance minister in the early 90s, IMF had another French chief. This time, I am the finance minister and you are contesting for the IMF top post.”

Mukherjee, however, did tell Lagarde that the selection should be on merit. “The candidate should be outstanding. The candidate should be considered irrespective of his or her country of origin,” he said.

Mukherjee also told Lagarde that 65 years had passed since IMF was founded and the west should understand the “new realities” in the forum. India’s voting share in IMF is 2.72 per cent.

Top finance ministry sources told Business Standard that while the UPA leadership was keen to see that the post did not remain with only Europe, it was aware of the weight of tradition, under which IMF is headed by a European and the World Bank by an American.

“It (reforms at monetary agencies) is not a one-shot operation. The developing countries must stand together. The reforms of global institutions or Bretton Woods institutions are high on the agenda of developing countries,” the prime minister had said after Lagarde announced her candidature.

China has already broken the unity among the BRIC nations by secretly endorsing Lagarde’s candidature.