New Delhi: India favours emerging economies jointly putting forward a candidate to head the International Monetary Fund, even if their bid is ultimately unsuccessful, two Indian finance ministry sources said on Monday.
Asia's third-largest economy is working behind the scenes with other emerging economies to build consensus behind one candidate, the sources, who declined to be named, told Reuters. Former South African Finance Minister Trevor Manuel could emerge as the choice of the group, one of the sources said. India has not made public its position on who should head the fund.
The IMF has promised a merit-based process to replace former leader Dominique Strauss-Kahn of France, who is under house arrest in New York on charges of attempted rape of a hotel maid. Strauss-Kahn denies the charges. French Finance Minister Christine Lagarde has emerged as a front-runner to take over, but developing economies, with growing global clout, are keeping pressure on Europe and the United States to avoid a backroom deal over the appointment.
The IMF has been run by a European since it was created at the end of World War Two. "We have been approached by Mexico and South Africa and are in touch with Brazil and other countries of the BRIC on the IMF," said an Indian finance ministry source, who could not be named as he was not authorised to speak to media.
The booming BRIC emerging economies are Brazil, Russia, India and China. The grouping recently added South Africa. India's representative to the IMF, former chief economic adviser to the finance ministry, Arvind Virmani, has been asked by New Delhi to explore a consensus among emerging economies on a candidate to head the IMF, a ministry source said.
However, consensus still eludes the emerging economies, with Mexico putting forward its own candidate for the top job. That has not stopped behind-the-scenes lobbying by other emerging countries to come up with an alternative to Lagarde. "India would like to see a consensus candidate from the emerging markets, even if it does not mean winning the contest, to send a strong message that there is a need for reforms at the IMF and other international institutions and give more voice to the developing countries," the second Indian source said.
China has the third-highest voting share in the IMF, while India ranks eighth. The negotiations could also result in a joint statement on the IMF succession issue by the BRICS countries. The first source said the emerging markets would have to take a decision in the next two or three days.
"We are trying to evolve a consensus among the 'dynamic emerging markets' that include Mexico, South Africa and African countries like Nigeria," the source said. "India would have no problem to support the South African candidate or any other BRIC candidate if there is agreement among the emerging markets and other members," one of the Indian finance ministry sources said. He added that India could also support a candidate from a European or other developed country provided the person was "sympathetic" to the concerns of developing markets, reflecting the fluid nature of the talks between the emerging economies.
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