Media Mates: MANAGEMENT COMPASS: In Focus

Global Economy
Christian Lagarde new IMF chief
Becomes the first woman to be elected as Managing Director, IMF

Europeans continue to dominate IMF
Amidst the financial meltdown in the European economy and the economic crisis in Greece, French national, Christian Lafarde was elected as the IMF’s first female Managing Director. "The executive board, after considering all relevant information on the candidacies, proceeded to select Ms. Lagarde by consensus," the IMF said in a statement. The election followed the disgraced exit of ex-Managing Director Dominique Strauss Kahn who resigned from the post to defend himself against charges of sexual assault made by a New York hotel maid. The election of Lagarde is fuelling heated debates that the election continues to strengthen European stronghold over the World Bank’s IMF, which has been headed, ever since its inception in 1944, by European nationals only.

Though many other names were doing the rounds, the final race for the IMF chief post has boiled down to Lagarde and Mexican central bank's governor Agustin Carstens. Both had travelled to New Delhi to drum up support for their candidature, but returned without eliciting any commitment of support. Despite calls and assertions for "merit-based and transparent" process for choosing the next IMF Managing Director, it was alleged that the winner was almost decided even before the nominations closed on June 10. The reasons are not attributed to consensus but the archaic and reform-starved voting pattern at the multilateral lender.

The role played by emerging economies
Lagarde, former French Finance Minister, threw in her hat for the coveted IMF post and was fully-backed by other European nations. Ever since the global financial crisis, whose watershed moment was the demise of US investment banking giant Lehman Brothers in September 2008, the emerging nations have been driving world economic growth. The roles played by China, India, Brazil and other emerging markets cannot be discounted, in terms of their contribution of global economic revival.

The election of yet another European as IMF chief also led to speculations that the emerging economies, especially the BRICS bloc (Brazil, Russia, India, China and South Africa) are finding it increasingly difficult to arrive on a consensus. The world and especially the emerging economies have learnt another lesson in world power politics as Lagarde comes from a region that has been continuing to grapple with debt turmoil without any immediate chances of recovery.

Who is Christian Lagarde
Even though Lagarde comes with a background in law, her role as France’s Finance Minister has acquainted her with the necessary skills and strategic bent of mind to oversee the revival of Ireland, Greece and other global economies on the brink of an economic disaster. Praise and support flowed him from her hometown, Chicago, where the law firm Baker and McKenzie said in a statement that “Christine was an effective leader who used her intellect, discipline and diplomacy to take our firm to new heights.

As the first female chair of a global law firm, she inspired so many of us with her grace, humanity and consensus-building approach, leaving a lasting impact on our firm and on the legal profession." Lagarde begins her five year term as the Managing Director, IMF on July 5.

— Manoj Rammohan

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