As Europe coalesces behind French finance minister Christine Lagarde to lead the International Monetary Fund, Mexican central bank chief Agustin Carstens announced his bid Tuesday to run the global institution. In an interview on Bloomberg TV, Carstens said the IMF doesn't need a European to lead it. “I don’t see why... to contribute to solving the crisis in Europe, a European has to be the managing director,” he said. “Right now the crisis is in Europe, but we don’t know where the next crisis will be.”
Since World War II a "gentlemen's agreement" held that Europeans led the IMF while Americans led the World Bank. And in recent days, France's Lagarde has emerged as the front-runner, winning support from Britain, Italy, Germany, Sweden, Ireland and, rumor has it, China. However, there's never been more demand for a candidate from an emerging economy, as countries such as Brazil, Mexico and India play a greater role in the global economy. The memory of the IMF's previous French managing director, Dominique Strauss-Kahn, also bodes poorly for Lagarde as well as a potential legal probe into a 2008 payout involving Lagarde, a prominent businessman and a state-owned bank. According to Bloomberg, "Mexico’s nomination of Carstens provides developing nations an experienced candidate they can rally around as they seek to end Europe’s 65-year hold on the job."
Carstens has a doctorate in economics from the University of Chicago and led Mexico through the global financial crisis as finance minister. Still, though he claims support from some countries, he has to win official endorsements from any besides Mexico. Brazil's cool reaction to his announcement isn't a good sign either. Sources told Reuters that Brazilian officials don't think he's reform-minded enough and he's a long shot to win.
Another possible emerging market candidate to get some attention is Singapore’s Finance Minister Tharman Shanmugaratnam, who is backed by Thailand and the Philippines. Currently Brazil, Russia, India and China are in consultations to determine a candidate.