June 10, 2011

Lagarde May Get South African Challenge for IMF Chief

Trevor Manuel could be emerging market favorite

Although French Finance Minister Christine Lagarde is seen as the frontrunner to step into the lead job at the International Monetary Fund (IMF) after the hasty departure of Dominique Strauss-Kahn, a new candidate may offer her a run for her money. Word out of Pretoria is that South Africa may nominate Trevor Manuel, a former finance minister, now that the deadline for nominations is approaching.

Reuters reported that thus far the only other challenger to Lagarde is Mexican Central Bank chief Agustin Carstens, but he lacks the broad support from emerging market nations that might be given to Manuel. Carstens is seen as too conservative by peers among those countries, but Manuel has been viewed as an ideal candidate. He managed South Africa's economy, the continent's largest, for ten years.

Emerging Markets magazine said that a "senior and well-placed" source in Pretoria had told of the potential nomination, which has not been confirmed by President Jacob Zuma's office. Manuel himself has said that his focus is on South Africa, but he has not denied the possibility of the nomination outright. He told public radio station SAFM, "Today is the deadline. I haven't put my hat into the ring as I speak to you. My adrenaline is flowing about South Africa right now. It's where my focus is."

Lagarde was in Lisbon on Friday lobbying African officials for the post at the African Development Bank's annual meeting. The possibility of a legal investigation concerning a 2008 arbitration payout is still pending, although French judges were expected to ask for more time to decide whether the matter warrants a full investigation. She has expressed confidence in the outcome.

Manuel was South Africa's finance minister from 1999 to 2009. He was born under apartheid, and although he spent time in prison for his political activities during the 1980s, he successfully transformed himself into a figure in whom investors could trust after the apartheid era ended.

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