JAKARTA/CAIRO, June 12 (Reuters) - French Finance Minister Christine Lagarde stretched her lead in the race for the IMF's top job on Sunday when Indonesia became the first big developing economy to back her publicly.
An 11th-hour challenge from Israel’s Stanley Fischer, announced on Saturday, seemed to be a symbolic move and the country’s finance minister acknowledged it was a long shot.
Indonesia, like many emerging economies, was previously non-committal about its choice for the next boss of the International Monetary Fund as Southeast Asian capitals discussed whether to put forward a candidate from the region.
Lagarde already has the support of the European Union and a handful of smaller countries. She gained a personal message of approval from her opposite number in Jakarta.
"Personally I support France," Finance Minister Agus Martowardojo said at an economic forum in Jakarta. "She is a very professional person. She is smart in interacting between institutions, and has high integrity and skills."
Several large emerging economies have been critical of the longstanding tradition of the IMF being led by Europeans.
But they have refrained from backing Mexican central bank governor Agustin Carstens, the only well-known challenger from an emerging economy until Fischer’s announcement.
The French finance minister, who is on a world tour to drum up support, said during a Sunday stop in Cairo she had got "very affirmative" support from Egypt.
The United Arab Emirates declared its support for her on Sunday.
FISCHER’S SURPRISE MOVE
The top position at the world’s main rescue-lending agency became vacant after Frenchman Dominique Strauss-Kahn was arrested by police on May 14 and resigned. He is charged with the attempted rape of a New York hotel maid, which he denies.
The move by Fischer, head of the Bank of Israel and once second-in-command at the IMF, was a surprise. At 67, he is two years past the age limit for applicants and the IMF would have to change those rules for him to stay in the race.
Israeli Finance Minister Yuval Steinitz admitted Fischer’s "chances are not great," because of politics and his age.
"Were it purely professional one would be hard pressed to find a better person than Fischer," Steinitz told army radio.
Fischer was born in Zambia and holds both Israeli and U.S. citizenship. The former could pose a problem for Arab countries and the latter because the IMF job normally goes to a European on the grounds that a U.S. national already gets to fill another post, the top job at the World Bank.
Fischer’s IMF record may additionally be questioned in Asia, where he remains associated with harsh IMF-backed free-market policies the region was forced to adopt in the late 1990s in return for aid to counter a financial crisis.
The IMF board is due to choose the next managing director by June 30. The United States and the European Union hold almost enough votes jointly to choose the winning candidate.
Nonetheless, Lagarde’s ability to clinch support from large developing countries is vital. In 2000, the Clinton administration blocked Germany’s Caio Koch-Weser after his bid for the IMF top job failed to get broad support beyond Europe.
One potential pitfall for Lagarde is an inquiry in France into her role in a controversial compensation payment to a French businessman. Lagarde has said she has no concerns about the case.
Whoever runs the IMF may end up with more than the world’s large post-recession debts to worry about, after revelations that the Washington-based IMF’s sensitive databases and economic information archives may have fallen prey to cyber hackers.
CANDIDATES CRISS-CROSS GLOBE
Lagarde’s latest campaign stops included Saudi Arabia on Saturday. Mexico’s Carstens visited New Delhi on Friday and is due to visit Washington on Monday.
Big emerging economies such as China, India, Brazil and South Africa have demanded that Europe relinquish its 65-year grip on the IMF’s top job, which should go to whoever is the best qualified candidate. But so far, only a few smaller developing countries have 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."
Germany paid tribute to Fischer’s skills but remained steadfastly behind Lagarde.
"Stanley Fischer is an internationally respected expert who the chancellor regards highly on a personal level," a German government source said. "That does nothing to change the German government’s support for Christine Lagarde’s candidacy."
