BRICS, a five-nation economic bloc comprising Brazil, Russia, India, China and South Africa, has issued a joint statement seeking a reversal of an unwritten convention that the International Monetary Fund (IMF) head has to be a European. However, ground reality suggests that someone from the developing world does not stand a chance to emerge victorious in case voting happens for the post of IMF MD. In an email interview with Indivjal Dhasmana, India’s representative in IMF, Arvind Virmani, said his personal view is that a possibility of a developing economies candidate to be IMF head is extremely low, given the current structure of voting in the IMF board. Edited excerpts:
Is Planning Commission Deputy Chairman Montek Singh Ahluwalia eligible to run as IMF MD?
According to the current by-laws of IMF, the age of a newly appointed MD cannot exceed 65 years. Ahluwalia is not eligible as he is more than 65.
The French government’s spokesman, Francois Baroin, claimed China is supporting French Finance Minister Christine Lagarde. But, now China’s Executive Director’s name is there in a BRICS joint statement. So, which version should we take?
The BRICS statement was issued in the evening of Tuesday (Washington time) and was approved by the Chinese ED. It is not possible for me to comment on a statement of a French government spokesman on what the French finance minister has said.
Do you think there is a chance for a candidate from emerging-market economies or developing countries to be the IMF MD in the foreseeable future?
My personal judgement is that the probability of an MD from an emerging-market economy will remain extremely low as long as the IMF’s quota shares do not reflect the relative weight of the different economies in the world and their contributions to global growth. (Currently, advanced economies have a 59.5 per cent share in the IMF board and developing economies 40.5 per cent).
Do you see any possibility of selection of the IMF MD this time through a consensus? Or elections seem a possibility?
The selection process, approved by a large majority of the IMF executive board, puts the emphasis on consensus, once the nomination process is over (on June 10), perhaps complemented by a “straw poll”. This has been the traditional approach for decades and the odds are that the same will happen this time. However, there is a Mexican candidate who has declared his candidature and there is a possibility of a vote, in case he remains in the fray till the end.
Developed nations have declared their candidate, but developing nations have yet to declare. Do you see this coming in the wake of a developing candidate winning?
Mexico is actually classified as an EMDC (Emerging Market and Developing country) in IMF terminology and is also a member of the G24. So, there is already an EMDC candidate.