Lagarde favourite for IMF as Mexican enters fray

Mexico central bank Governor Agustin Carstens will be presented as a candidate for managing director of the International Monetary Fund, the Finance Ministry said in an e-mailed statement today.

The process to choose a new leader at the IMF should be “open, transparent and based on merit,” the ministry said. Finance Minister Ernesto Cordero will present Carstens’ candidacy, the statement said. The government will likely nominate Carstens tomorrow, said Ricardo Ochoa, head of international affairs at the ministry, in a phone interview.

With Carsten’s nomination, Mexico joined Australia, China and other nations in calling for the new managing director of the lender to be chosen because of merit and not the convention that the position should go only to Europeans. Australian Treasurer Wayne Swan said May 22 the position shouldn’t be “limited” to any one nation or continent.

The Washington-based fund plans to complete its search for a managing director by June 30 to replace Dominque Strauss-Kahn who was indicted May 19 in New York on charges including attempted rape. Carstens served as deputy managing director of the fund from 2003 to 2006.

Carstens became central bank governor in January 2010 after Guillermo Ortiz stepped down. Carstens, who has a doctorate in economics from the University of Chicago, served as finance minister starting in 2006, where he led the nation’s response to the global financial crisis. Mexico was the first nation to request a flexible credit line from the IMF, a mechanism to help support economies seeking strong macroeconomic policies.

Voting rights

Mr Strauss-Kahn was the fourth Frenchman to have held the IMF's top job.

He is in New York on bail awaiting trial for sexual assault and attempted rape, charges he denies.

In their statement Mr Swan and Mr Gordhan said G20 leaders wanted to reforming international financial institutions, including the IMF and the World Bank.

Developed industrialised countries currently control about 57% of the voting rights in the IMF, compared with about 43% for developing nations.

With the recent emergence of Brazil, Russia, India and China, many other global figures - including the head of the Organisation for Economic Co-operation and Development - had also called for the IMF job to go to a non-European.

The appointment is usually decided unanimously by the IMF's executive board, although a majority vote by the board would be enough to choose the winner.

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