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Three questions for Christine Lagarde

world Updated: May 31, 2011 00:04 IST
Dipankar De Sarkar
Dipankar De Sarkar
Hindustan Times
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Christine Lagarde, the leading contender to head the International Monetary Fund, is preparing to launch a charm offensive on India.

The elegant and chic French finance minister is facing charges that Europeans are once again trying to wangle the IMF top job - The Economist magazine has slated what it called "the stitch-up, whereby the head of the IMF is a European and the head of the World Bank is an American."

Lagarde's her main problems are that she is not an economist by training and she is a European finance minister at the wrong time. From these difficulties flow the following questions for Lagarde:

1. As the first non-economist to be holding the post of IMF director-general, how will she cope with the technical issues that are certain to be thrown at her within days of taking over? Dealing with expert technical advise at the national or regional level is one thing - deciding global issues on the basis of competing technical advice is quite another.

2. As a European, how will she deal with Europe? Will she act on behalf of all shareholders, who include India, or be soft on profligate Europe? Will she apply the same yardsticks to all borrowers for evaluating future loans?

3. How will she reflect the global shift of power in the workings of the IMF? It is after all Europe that is blocking BRICS demands for changing the IMF's voting shares.

A lot rides upon the questions India asks Lagarde, and not only for emerging economies. Many London-based analysts are wary of one more European claiming the job - just days after Barack Obama urged Europe to embrace rising India, China and Brazil.

"Why is Montek Singh Ahluwalia not in the running?" Bill Emmott, former editor of The Economist, told me. "At a time when Europe is trying to overcome age barriers, I cannot see why Montek is not in the running."

In its latest issue The Economist lists five candidates who it says are better than Lagarde, and one of them - Israel's central bank governor Stanley Fischer - is too old under existing IMF rules. Just like Montek.