Failure of emerging-market nations to rally behind a single candidate to head the International Monetary Fund shows the effort still needed to link diplomatic might with growing economic strength.
As the IMF begins its search for a successor to Dominique Strauss-Kahn, Russia is endorsing Grigori Marchenko, the head of Kazakhstan’s central bank, while the Philippines and Thailand speak favorably of Singapore Finance Minister Tharman Shanmugaratnam. India, China, Brazil and South Africa have yet to throw their support behind anyone even as they urge selection be driven by merit rather than nationality.
By contrast, European Union nations have given overwhelming support to French Finance Minister Christine Lagarde to head the Washington-based IMF, the institution that approved a record $91.7 billion in emergency loans last year and provides a third of the euro-area’s bailouts. That left Asians, South Americans and Russia talking principles without agreeing on one person.
“The Europeans have the great advantage that they have institutional mechanisms to agree on a candidate upfront,” said Ousmene Mandeng, head of public-sector investment at Ashmore Group Plc in London and a former IMF economist. “The emerging markets may find it more difficult to identify a common candidate and then lobby to ensure that he or she obtains sufficient support from the U.S.”
As recently as last month the leaders of Brazil, Russia, India and China, known as the BRIC countries, were urging the U.S. and Europe to end their 65-year monopoly on leadership positions at the IMF and World Bank, which has always been headed by an American June 30.
SILENCE IN JAPAN
For Japan, second only to the United States in IMF voting power, backing someone from elsewhere in Asia would serve as a painful reminder of the country's waning influence.
Koichi Haji, chief economist at NLI Research Institute in Tokyo, said Japan is not thrilled with the prospect of Europe retaining its hold on the top spot, but isn't in a position to propose a Japanese candidate and would not be comfortable with someone from an emerging market either.
"Nothing seems to be an attractive option, which might be why Tokyo remains so silent on this whole subject," he said.
Japanese Finance Minister Yoshihiko Noda declined to comment when asked whether he would support Lagarde or another name put forward, Mexico's central bank governor, Agustin Carstens.
He said only that the process should be open, transparent and merit-based, a line heard repeatedly throughout the region.
As for smaller Asian economies, the next head of the IMF is far from the top of the to-do list.
Many in the region harbor bad memories of the financial turmoil of the late 1990s and felt the IMF was condescending and harsh in its dealings with countries in crisis.
Asian nations have built up large cash reserves, in part as a form of self-insurance so that they would never again be forced to go hat-in-hand to the IMF. The fund has little influence over countries that don't need its loans.
Still, an Asian IMF chief would be a powerful sign of respect, said Pavin Chachavalpongpun, a fellow at the Institute of Southeast Asian Studies in Singapore.
Getting a southeast Asian candidate into the mix would raise the region's international profile, and the fund might benefit from the experience of someone from a country that has been on the receiving end of IMF advice. There would be no shame in putting forward a candidate who loses, he said.
"If you never try, you never succeed," he said.
An Asian IMF boss might serve as a symbol of IMF humility as well -- which might help heal some of those 1990s wounds.
Now that the world has endured a financial crisis wreaked by the policies of the rich, the IMF has begun to question its western economic orthodoxy.
Indeed, at an IMF conference in March, its chief economist said the latest crisis forced a "wholesale re-examination" of principles that had formed the basis of mainstream economics.
Those tenets, often referred to as the "Washington consensus," also formed the basis of many of the IMF policies and recommendations that so rankled Asian economies.
Now that they are no longer seen as gospel, it makes even more sense to choose an IMF leader who thinks differently, said UCLA's Edwards, who has long opposed the tradition of Europeans leading the IMF while Americans take the top World Bank spot.
He dismissed as "absurd" the idea that another European should get the job this time around because a European is best suited to manage the region's sovereign debt crisis, which is likely to take up a great deal of the next leader's time.
The one reason why the crisis is not going away is that no one has been looking at it with a broad historical lens," he said in an emailed response to questions from Reuters.
"What we need is not an expert in the last crisis; what we need is someone that will understand the next crisis. Because we can be sure that there will be more.
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