The battle for the top job at the International Monetary Fund kicked into high gear Thursday, with Europeans staking their claim for the post as the continent grapples with economic problems and Asian and emerging nations arguing now is their time to lead the international institution.
World Bank president Robert Zoellick said global leaders have started the formal process to replace Dominique Strauss-Kahn, who early Thursday resigned following his weekend arrest on sexual-assault charges.
"There's a process that the countries will use, and the shareholders and you can see it starting to form now," Zoellick said after speaking at the Bretton Woods Committee annual conference in Washington. "It's up to the shareholders to decide the next process that they take in leadership and I'm sure they'll pick a very fine person."
Asked whether the process would live up to promise by global leaders for a more transparent, merit-based process, Zoellick said, "I'm sure it will be."
The Group of 20 industrialized nations has promised to change the leadership selection process at both the IMF and World Bank, suggesting a move away from the automatic appointment of a European to the IMF and an American to the World Bank.
Zoellick spoke as European governments coalesced around Christine Lagarde, a corporate lawyer who has been France's finance minister since 2007 and who has emerged as the frontrunner for the IMF job in the days since Strauss-Kahn's arrest in New York.
Asian and other emerging markets nations, meanwhile, are pressing for increased representation, arguing that senior management should better reflect changes in global economic patterns.
The question of the IMF's leadership is sensitive as it comes at a time of change in the global economic power balance. Emerging market countries are expanding strongly, playing an ever increasing role in contributing to world economic growth. Most European economies, however, are growing slowly over the medium term, and many are creaking under the burden of government debt.
Some Asians think the rise of their continent should mean greater representation in international organizations -- the IMF post involves directing the flow of billions of dollars to stabilize the global economy.
"There's no logic to the tradition that the IMF is run by a European," Thailand's finance minister Korn Chatikavanij told The Wall Street Journal Thursday in a telephone interview. "The world has come a long way in the past three or four years.
But Europeans argue that their problems -- in particular some countries' unsustainable sovereign debt burdens -- would make a European more suitable for the job. Crucially, German chancellor Angela Merkel said that pressing concerns required a rapid appointment -- something that might favor a European, as the most obvious candidates are European. "It's of great importance that we find a fast solution" for the IMF succession, Merkel told a press conference Thursday. "I am of the opinion that we should propose a European," she said, adding, "I won't give a name today, but we will talk about it in the E.U."
Lagarde said that any proposal for the post would need European agreement. "Any candidacy should have European support," she said during a visit to a Paris supermarket Thursday.
"Our objective is that the IMF is able to fulfill its mission and to meet its challenges," said a French foreign ministry spokesman. "It's quite clear that in this regard, Europe is a player of the first order."
Lagarde has already secured the backing of European capitals. Swedish finance minister Anders Borg on Wednesday said Lagarde stood out for the role she has played in managing the euro zone's fiscal crisis and global financial coordination. "Madame Lagarde is one of the obvious candidates," he said. Crucially, Merkel will support Lagarde if France puts her forward, according to people familiar with the matter.
But she is not the only high profile European name circulating. European Central Bank governing council member Nout Wellink said Wednesday that ECB president Jean-Claude Trichet would be "a fantastic candidate ... He knows everything in Europe, and he is fully independent. He has a big track-record and is very persuasive," Wellink said during a late-night talk show on Dutch television.
A volley of statements from Asia on Thursday seemed designed to preempt any hasty appointment of a European. Philippine finance secretary Cesar Purisima said Asia's role as an engine of growth for the global economy meant an Asian should take the reins at the IMF.
"Given the urgent need for stable leadership in the IMF, coupled with the shifting global economic landscape ... there is no time more fitting than now for an Asian leader to take the helm of such a distinguished organization," Purisima said in a statement. "A new brand of leadership will send a positive signal that the IMF is indeed responsive to the changing world."
People's Bank of China gov. Zhou Xiaochuan said in a statement that "the make-up of the top management should better reflect changes in the structure of the global economy and better represent emerging markets."
Indonesian finance minister Agus Martowardojo said: "It would be good if the opportunity is also open for Asian candidates. Indonesia certainly will welcome and support it."
Thai finance minister Korn argued that Asians knew how to deal with financial problems after the region's 1990s financial crisis, which erupted in Thailand before spreading across Southeast Asia and beyond.
"We've all had hands-on experience, and credit should go to Strauss-Kahn and the IMF for the way they have learned from their mistakes in Asia in the past," Korn said.
Still, it wasn't immediately clear whether Asian or emerging economies could coalesce around a single candidate. A former U.S. official said the only way to block France's Lagarde would be for the Brics countries -- Brazil, Russia, India, China and South Africa -- to quickly agree on a candidate and force the U.S. and EU to respond.
Korn said Singapore's finance minister Tharman Shanmugaratnam would be a good choice to take on the top job at the IMF, as would Indonesia's former finance minister Sri Mulyani Indrawati, who is now with the World Bank. But Tharman, who was given the added role of Singapore's deputy prime minister in a Cabinet reshuffle Wednesday, has dismissed speculation that he might get the job. "Fortunately, the new Cabinet has been announced and put paid to such rumors," he was quoted as saying in the local Today newspaper. Tharman's office had no immediate comment Thursday.
SaKong Il, a prominent South Korean economist also considered a contender, said the selection of the next IMF managing director should be "merit-based," not dependent on the home country of the candidate.
"It's time to follow through on what's been promised" by the Group of 20 leaders," said SaKong, who organized the G-20 summit in Seoul in Nov. 2010. "I think the global community is watching."
Speaking from London, SaKong said he was "honored" to be considered a candidate but said it would "too presumptuous" for him to say how he would propose to run the IMF.
One strike against SaKong is that he is 71 years old. IMF rules say that a managing director must be younger than 65 when he starts his first term. According to the IMF's bylaws, the managing director must retire at 70. However, those rules can be changed.
One Japanese national sometimes mentioned as a candidate is Asian Development Bank president Haruhiko Kuroda, a former Japanese vice finance minister. The ADB said Thursday that Kuroda wouldn't be available for comment but that the Manila-based lender "looks forward to continue working with the IMF and its recently appointed acting managing director, John Lipsky."
Other financial leaders from emerging economies have also questioned the tradition of appointing a European to head the IMF since it was created in the aftermath of World War II. Brazilian finance minister Guido Mantega has suggested a shake-up at the organization so that the person who leads it is selected on merit, not just for being European, while South Africa's finance minister Pravin Gordhan has said a candidate from an emerging economy would bring "a new perspective" to the IMF.
James Hookway and Bernd Radowitz are reporters for the Wall Street Journal, where this story originally appeared. Write to Hookway and Radowitz.
Cris Larano in Manila, I Made Sentana in Jakarta, Owen Fletcher and Bob Davis in Beijing, Prasanta Sahu in New Delhi, Takashi Nakamichi in Tokyo, P.R. Venkat in Singapore, Enda Curran in Sydney and In-Soo Nam in Seoul, Gabriele Parussini and Nathalie Boschat in Paris contributed to this article.