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Political Economy
Posted at 10:04 AM ET, 05/27/2011

Why Israeli central banker Stanley Fischer will/won’t head the IMF

Israeli central bank official Stanley Fischer is throwing his name into the pool of people being considered for the top spot at the International Monetary Fund, the Wall Street Journal reported Friday.

Given the increasingly long list of prominent candidates—including French Finance Minister Christine Lagarde (who is widely supported in Europe) and Mexican Central Bank Governor Agustin Carstens (who may gain the support of the emerging markets bloc)—what are Fischer’s chances?

Fischer, 67, certainly has the academic and professional qualifications. A former deputy managing director of the IMF, he also served as the chief economist at the World Bank and a vice chairman of Citigroup. He was formerly a professor at the Massachusetts Institute of Technology’s Sloan School of Management where he served as the thesis adviser to Ben Bernanke.

But if you take into account the politics of the selection process, Fischer’s chances may be much slimmer although, as the Wall Street Journal reported, he may have “an outside shot at the job if there is a deadlock in the voting.”

Here’s a breakdown of the political issues Fischer faces.

Reasons why he will get the job

He was born in Africa, helping position him as a candidate from the emerging markets. Fischer sought the top job at the IMF in 2000 and was able to gain the support of many countries from Africa and the Middle East.

He’s not French. Three previous managing directors have been French.

Reasons why he won’t get the job

He holds an Israeli passport, which raises all sorts of issues that countries may want to sidestep in the debate over a candidate.

He’s also a naturalized American citizen, which would not help him with emerging markets countries that want one of their own in position.

His age. IMF rules say the new managing director should be 65 years of age or younger.

He’s a man. All the previous IMF heads have been men. And do we even need to mention Dominque Strauss-Kahn and why the job is vacant in the first place?

Wild card

Will the U.S. back Fischer? The U.S. has 17 percent of the vote, but unlike the Europeans who have openly backed Lagarde, has been mum about who it would back.

The IMF has said it would release a list of three candidates for the job by June 10 and that the new director, who needs to gain a simple majority of the voting members of fund, will be picked by the end of the month.

By  |  10:04 AM ET, 05/27/2011

 
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