Asia looks to Lagarde to honour pledges

Written by Reuters | Singapore | Updated: Jun 30 2011, 09:10am hrs
Asias fast-rising economies set their sights on securing key IMF appointments under newly named chief Lagarde on Wednesday, hopeful she would be the one to make good on oft-heard pledges to swing more power to emerging markets.

Lagarde said all the right things on her recent campaign-trail tour of Asia. She acknowledged that countries such as China and India deserve increased IMF voting power commensurate with their growing economic clout, and a fair shot at the emergency lending institutions top decision-making posts.

Lagarde is a friend of India, a senior Indian government source said. We cant get the IMF managing directors chair for now but at least India can get some high-level appointments in the IMF during her tenure and we will work towards that.

Lagarde begins her five-year term as MD of the International Monetary Fund on July 5, and will find herself immediately immersed in efforts to head off a Greek debt default that could spark an international crisis.

High on her to-do list within the Fund will be appointing a top leadership which fairly reflects global economic influence, and shepherding through an already agreed process to reallocate IMF voting rights to give emerging markets greater say.

Lagarde received support from many major Asian economies even though she perpetuates a pattern they despise of Europeans holding the top IMF job. No Asian candidate stepped forward to challenge Lagarde and Mexicos Agustin Carstens.

Lagarde has been more successful in consensus building to bridge relationships between advanced countries and emerging markets, Indonesias central bank deputy governor Hartadi A Sarwono said.

She will need those skills for the difficult personnel decisions. The US is already considering putting forward a Treasury official for the number two role, which has traditionally been filled by an American.

India sought to join consensus: Pranab

Washington: India supported Lagarde as the IMFs next head as it wanted to be part of the consensus that was forming around her, finance minster Pranab Mukherjee said on Tuesday. Mukherjee said that he thought the IMFs selection mechanism should have been more transparent, but he believed that Lagarde, Frances finance minister, was a worthy candidate. Of course she has merit. Otherwise, why should I be supporting her he said. He kept his cards close to the vest, waiting until after the IMF board elected Lagarde as managing director to reveal Indias support.