MEXICO CITY/BRASILIA (Reuters) The race to pick a new leader for the IMF formally launched on Monday as Mexico sought support for its central bank governor and Brazil said more time was needed to make a choice.
Mexico nominated Agustin Carstens to succeed Dominique Strauss-Kahn, although Brazil, Latin America's leading economy, appeared reluctant to back him.
Brazilian officials feel Carstens is a long shot for the top job at the International Monetary Fund and not sufficiently reform-minded, Brazilian government sources told Reuters.
After Britain over the weekend endorsed French Finance Minister Christine Lagarde as an "outstanding candidate" for the job, officials of emerging economies were pushing back against any assumption the next IMF leader must be European.
"A stench of colonialism is wafting around 19th and H streets in Northwest Washington, site of the headquarters of the International Monetary Fund ," said Moises Naim, a former World Bank board director for Venezuela who is currently at the Carnegie Endowment for International Peace.
Russia last week said it would back Kazakhstan's central bank chief, Grigory Marchenko, and sources have said South African politician Trevor Manuel could also emerge as a candidate.
The IMF's board of member countries opened the formal nomination process on Monday and has set a deadline of June 30 to pick a successor. Brazil urged that the board take time to pick the right person for the post.
"What matters here is having a good candidate, not nationality," said Brazilian Finance Minister Guido Mantega.
Strauss-Kahn is under house arrest in New York on charges of attempted rape, which he denies. He resigned on Wednesday. The IMF is being run by its No. 2 official, John Lipksy, who has said he wants to step down in August.
In a letter to IMF staff circulated on Monday, Strauss-Kahn called the events surrounding his arrest "a personal nightmare" and apologized for the pain his case was causing IMF staff. He said he was confident he would eventually be exonerated.
WHO HOLDS THE POWER?
Emerging-market countries appear riled by the notion that Lagarde, who has yet to be formally nominated, is already a front-runner and they are pressing to find candidates who could break Europe's 60-year hold on the post.
"We have been approached by Mexico and South Africa and we are in touch with Brazil and other countries of the BRIC," an Indian finance ministry official told Reuters. He was referring to the booming economies of Brazil, Russia, India and China. South Africa was recently added to the group.
Mantega suggested Strauss-Kahn's successor only serve the remainder of his term, which would have ended in September 2012. Full terms are for five years.
A truncated term seems unlikely to fly since the IMF board does not want to go through the tortuous and politically strenuous process of selecting a leader again so soon.
Fast-growing emerging-market nations have been pushed and pulled to take on a larger role in global institutions like the World Bank and IMF and to contribute more money.
Caught off guard by Strauss-Kahn's resignation, they are now resisting the "gentleman's agreement" that has assured a European will lead the IMF and an American the World Bank.
"It's no longer tenable for Europeans to anoint an IMF head behind closed doors," said Oxfam spokeswoman Sarah Wynn-Williams.
Oxfam was one of a coalition of groups that sent an open letter to the IMF board urging an open selection process rather than a "backroom deal" to pick Strauss-Kahn's successor.
Johannes Lin, a senior fellow at the Brookings Institution in Washington, said a Europe-U.S. deal on a leader "would send another signal that the 'old powers' are not ready to accept the new economic reality."
"It would create the spectacle of the Europeans and the United States holding on to prerogatives whose time has passed and whose exercise results in national embarrassment such as we have seen in the wake of recent leadership upheavals at the World Bank and IMF," he wrote.
Leaders from the Group of Eight wealthy nations are expected to discuss the IMF succession at a meeting later this week in Deauville, France.
Lagarde backers argue that the IMF needs someone immediately familiar with the situation in Europe, where the global lender is helping draft rescues for indebted nations like Portugal, Ireland and Greece.
But Edwin Truman, a former U.S. Treasury Department official now at the Peterson Institute, suggested that was an argument more of convenience than fact, and he harked back to 1987 when Latin America was struggling.
"The Europeans did not argue that the managing director should come from Latin America because Latin America was then in the midst of a debt crisis," Truman pointed out.
(Additional reporting by Lesley Wroughton in Washington, Jeremy Gaunt in London, Luis Rojas Mena in Mexico City and Abhijit Neogy and Manoj Kumar in New Delhi; writing by Glenn Somerville)
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