Indonesia backs Lagarde as IMF candidates seek support

G20 member Indonesia threw its backing behind France's Christine Lagarde for the head of the IMF on Sunday, marking her first public endorsement from a major emerging market and padding her lead in a three-way race.

Indonesia has previously been non-committal on the race for the International Monetary Fund's top job, as Southeast Asian and other emerging market nations discussed the possibility of putting forward a candidate themselves for a post traditionally held by a European.

But with the deadline for the job ending on Friday, only Bank of Israel Governor and former IMF deputy chief Stanley Fischer has emerged as a candidate to challenge frontrunner Lagarde and Mexico's central bank chief Agustin Carstens.

"Personally I support France," said Indonesian Finance Minister Agus Martowardojo on the sidelines of a World Economic Forum event in Jakarta.

"She is a very professional person. She is smart in interacting between institutions, and has high integrity and skills," he added, having met Lagarde during her visit to Indonesia in February.

Lagarde, France's finance minister, is backed by the European Union and a handful of smaller countries from Georgia to Mauritius. Paris is hopeful that Washington and Beijing will also stand behind her.

Fischer said on Saturday he would compete for the IMF job, vacated when Frenchman Dominique Strauss-Kahn quit in May over charges he tried to rape a New York hotel maid. Strauss-Kahn has denied the charges.

MEMORIES OF ASIAN CRISIS

Fischer is popular in the United States, but may not go down so well in Asia, where he remains associated with some of the harsh IMF-backed free-market policies to fight the region's financial crisis in the late 1990s.

Indonesia, Southeast Asia's biggest economy, needed a $43 billion bailout from the IMF then to help it cope, but has more than doubled its foreign reserves since 2008 up to a record $118 billion to give itself a cushion against future crises.

Lagarde was in Saudi Arabia on Saturday as part of a world tour to drum up support among emerging market economies, while Carsten visited New Delhi on Friday but appeared to fail to win their commitment to his candidacy.

India and other emerging economies China, Brazil, South Africa and Russia have called for an end to Europe's grip on the top job at the international lender. However none of those countries put up a candidate or explicitly backed Carstens.

"There is not the capacity to build consensus among the emerging market nations behind one candidate, irrespective of who that person is, and besides that the Europeans feel very strongly," said Ian Bremmer, president of political risk consultancy Eurasia Group.

"I think it's virtually impossible to unseat Lagarde at this point."

BY Reuters..

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