France’s Christine Lagarde brought her IMF roadshow to India yesterday in the latest leg of a world tour aimed at overcoming opposition in emerging countries to her bid to lead the institution.
The French Finance Minister, who has already travelled to Brazil to press her case, was scheduled to meet Prime Minister Manmohan Singh, Finance Minister Pranab Mukherjee and the influential policy advisor Montek Singh Ahluwalia.
India appears resigned to the idea of Europe’s continuing its stranglehold on the managing-director position at the Washington-based lender, but it has joined other emerging countries in criticising the selection process.
“She’ll be received warmly, but I’m not sure she will receive open Indian support,” Brahma Chellaney from the Centre for Policy Research think-tank in New Delhi said..
Most observers expect Ms Lagarde, a 55-year-old former lawyer, to echo her statements in Brazil where she pledged to reform the International Monetary Fund to give emerging and developing countries more power.
India has so far declined to publicly support any candidate in the race to fill the top job, which fell vacant with the resignation of Dominique Strauss-Kahn over allegations of sexual assault in New York last month.
In a New York court on Monday, the 62-year-old pleaded not guilty to the attempted rape of a hotel maid.
New Delhi has stressed it would like to see a common emerging-market candidate for the job, but has not declared in favour of the only other serious contender, Mexico’s central bank chief Agustin Carstens.
Mr Carstens visited Canada yesterday and is going to India on Friday on a tour that has already seen him stop off in Brazil and Argentina.
“I think at this point India would like to see if the Mexican candidate is going to a credible challenger. They’re hedging their bets safely and have sat on the fence,” Mr Chellaney said.
The only possible Indian candidate for the job, 68-year-old Montek Singh Ahluwalia, who heads the government’s Planning Commission policy unit, was ruled out because he is over the IMF retirement age of 65.
Under a tradition that has existed since the formation of the IMF after World War II, a European has always headed the institution while an American leads the World Bank, the IMF’s sister organisation.
Mr Singh has conceded that changes to the IMF and other global institutions to reflect the rise of Asia and other emerging countries will take time, telling reporters last month that it would be a “long haul”.
Other Indian officials have stressed that the current voting rights for the IMF give Europe and the United States overwhelming influence and ability to force through their candidate as the next head.
Ms Lagarde is due in China today before heading on Friday to Lisbon, where African finance ministers and central bankers will be meeting for the African Development Bank’s annual gathering.
Uday Bhaskar of the National Maritime Foundation think-tank, said Lagarde’s nationality was an advantage because New Delhi viewed France as a country prepared to stand up to the Washington.
“India has always seen France as acting with autonomy in Europe, regarding for instance the United States,” he said.
“The traditional Indian position is to say that the IMF should not always be headed by a European and the World Bank by an American, but it’s very unlikely that India and the other Asian nations will have any candidate,” he said.
Mr Chellaney said India was also watching China carefully.
Much could hinge on whether China unites with Brazil, Russia, India and South Africa, the other so-called BRICS countries, rather than doing its own deal with Europe and the United States.
Some reports suggest China has agreed to back Ms Lagarde in return for support for its own candidate as her number two.
“There’s an effort ongoing to create momentum for an emerging-country candidate. If the Chinese strike their own deal it will become difficult,” Mr Chellaney said.
The Times of India newspaper, quoting unnamed sources, said other Asians were also in the frame for the number two spot, such as Thai Finance Minister Korn Chatikavanij and Singapore Deputy PM Tharman Shanmugaratnam.