France's Lagarde prepares IMF charm trip to China, Brazil

26th May 2011, Comments 0 comments

French Finance Minister Christine Lagarde is on a charm offensive to win over emerging economic powers unhappy that another European should head the IMF, planning visits to China and Brazil, sources said on Thursday.

"She could go in the coming days to China and Brazil," said one source in Lagarde's entourage, adding that details had yet to be agreed.

US Secretary of State Hillary Clinton meanwhile said on Thursday that Washington had not yet made its choice for the IMF post, although "unofficially" she would welcome a woman in the job, in an apparent reference to Lagarde.

The top IMF job is vacant because last week the head of the organisation, Frenchman Dominique Strauss-Kahn resigned to fight sexual assault charges which he denies.

The imminent visits by Lagarde, likely to include others in the BRICS group comprised of Brazil, China, India, Russia and South Africa, will allow her "to make herself better known, to explain her candidacy and lobby," the source added.

She may have a lot of work to do, having run quickly into strong resistance in the major developing countries who think it is time they got a say at the top of one of the global economy's most important institutions.

China said on Thursday that the choice of a new IMF chief should be based on "openness, transparency and merit, and better represent emerging markets and better reflect changes in the world economic structure."

China's foreign ministry said it had "noted" the nomination of candidates for the post of IMF managing director.

But a statement did not directly address Lagarde's candidacy -- even though a French government spokesman had said on Tuesday that Beijing would back her.

Lagarde told the Wall Street Journal in an interview on Thursday that she was prepared to visit China, as early as Sunday, to drum up support for her bid.

"China, Brazil and India are an absolute necessity," Lagarde said.

If the developing countries oppose another European as head of the IMF, they have up to now failed to agree a candidate of their own, with some critics seeing their opposition as just sour grapes.

On Thursday, however, Indian Finance Minister Pranab Mukherjee said he was coordinating with other emerging countries to back a common candidate.

"I am in touch with some of the finance ministers of developing countries and emerging economies ... We are trying to consolidate our position," he said in a PTI news agency report.

On Wednesday, Indian Prime Minister Manmohan Singh called on developing countries to help reform the IMF while on Tuesday, the BRICS IMF directors said Europe's grip on the top post "undermines the legitimacy of the Fund."

South Africa insisted on Thursday that the next IMF chief should come from the developing world but added that it had not discussed potential candidates, with consultations underway with its partners.

The head of South Africa's national planning commission Trevor Manuel has been floated as a candidate along with Mexican central banker Agustin Carstens.

Germany, France, Britain and Italy have all backed Lagarde but the United States, a key player and where she is generally respected, appears reticent.

US Treasury Secretary Timothy Geithner on Wednesday called Lagarde and Mexico's Carstens "very credible" candidates, without endorsing either, adding that "there may be others to join them."

By a convention dating back to its 1945 founding, the IMF has a European head while an American takes the top job at its sister body, the World Bank.

Currently, European nations hold close to a third of the voting power at the International Monetary Fund while the United States has nearly 17 percent.

Asian nations hold around 20 percent, with the rest held by other countries.

The IMF has said it would like to make a choice by the end of June, based on consensus among the 24 executive board directors, or possibly by a vote.

© 2011 AFP

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