May 23, 2011 7:11 pm

Europe’s tight grip on IMF attacked

A leading potential candidate from the emerging markets criticised the tradition that the head of the International Monetary Fund is always a European as the race for the top job began to take shape.

“It has to be wrong for multilateral bodies to have a recruitment process where birthright is more important than ability,” Trevor Manuel, the South African planning minister, told reporters on Monday.

Mr Manuel refused to discuss whether he will become a candidate but said choosing a developing country head for the fund is “a principle worth fighting for”.

A former finance minister, Mr Manuel is seen as one of the most credible emerging market contenders to run the IMF, but Europe is uniting behind Christine Lagarde, France’s finance minister, as its candidate.

Nominations to be the next IMF managing director are due by June 10 and the process is meant to finish by June 30. The IMF is searching for a new leader after the resignation of Dominique Strauss-Kahn who is facing charges of alleged sexual assault.

“The odds still have to heavily favour the European candidate,” said Arvind Subramanian, senior fellow at the Peterson Institute for International Economics in Washington and former assistant director of the IMF’s research department.

Mr Subramanian said the challenge for emerging markets was to put rivalries aside and unite behind one or two candidates.

“Within Asia I think the big problem is whether China would agree to an Indian candidate and vice versa,” he said, adding that Tharman Shanmugaratnam, Singapore’s finance minister, was one candidate who might command widespread Asian support.

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