Lagarde in Brazil Vows Bigger IMF Role for Emerging Markets

French Finance Minister Christine Lagarde said Brazil is underrepresented at the International Monetary Fund and if elected managing director she will continue work giving a bigger voice to developing nations.

Lagarde, who has won endorsements from across Europe since announcing her candidacy to head the Washington-based lender on May 25, arrived in Brasilia today before heading to China in a bid to broaden support for her bid among developing countries.

“I chose Brazil as my first destination in the campaign because it’s a big emerging country that carries a lot of weight in the international scene,” said Lagarde. “It’s important to allow countries to have a lot of representation.”

Speaking alongside Brazilian Finance Minister Guido Mantega, she said being French is neither an advantage nor a flaw as Brazil and other emerging markets seek to break a half- century tradition whereby the top IMF job is reserved for a European.

Mantega told reporters that emerging markets have no plans to rally around a single candidate and that Brazil would decide who to support after hearing each nominee’s proposals. Mexican Central Bank Governor Agustin Carstens, who is trying to win backing from developing nations for his rival bid, visits Brasilia on June 1.

“We think it’s good that there’s a variety of candidates because it shows that there’s a democratic spirit,” Mantega said.

Private Support

Brazil will privately support Lagarde’s candidacy to run the IMF, a Brazilian government official familiar with the negotiations said May 24. Carstens likely won’t have enough votes to win, said the official, who requested anonymity because he isn’t authorized to speak publicly about the issue.

In exchange for its support for the European candidate, Brazil will push for Lagarde to run the IMF only until the end of next year, when former head Dominique Strauss-Kahn’s term would have expired, the official said. Brazil doesn’t plan to declare that support openly, he said.

“Nationality shouldn’t be a qualification to head the IMF,” Mantega said today. “This rule is outdated.”

Russian Prime Minister Vladimir Putin voiced May 27 his support for Lagarde, joining the U.K., Germany and Sweden. U.S. Treasury Secretary Timothy F. Geithner has praised Lagarde’s qualifications while refraining from endorsing her candidacy.

IMF executive directors representing Brazil, Russia, India, China and South Africa have protested a tradition dating back to the fund’s creation after World War II that its leader always be a European.

Brazil Praise

Mantega today said Brazil “welcomes” Lagarde’s nomination and he praised her qualifications, though he said the fact that the next IMF chief will be absorbed by problems in Europe doesn’t mean they need to come from there.

The IMF said it aims to complete by June 30 the selection of Dominique Strauss-Kahn’s successor. Countries from the European Union hold about 31 percent of the votes at the agency and the U.S. almost 17 percent. Emerging market and developing countries saw their share of votes increase to 42 percent, from 40.5 percent, under Strauss-Kahn’s management.

The IMF, which provided a record $91.7 billion in emergency loans last year and accounts for one-third of the euro-region’s bailout packages, has promised transparency in the selection process.

Strauss-Kahn resigned from the post this month to defend himself against charges that he sexually assaulted and raped a maid at a Manhattan hotel. Lagarde would be the first woman to lead the IMF since its founding in 1945.

Mexico’s Carstens served as IMF deputy managing director from 2003 to 2006. He has a doctorate in economics from the University of Chicago, and took the reins of Mexico’s central bank in January 2010 after serving as the country’s finance minister.