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A rush by European officials to maintain a 65-year lock on the International Monetary Fund’s top job leaves little hope for a candidate from an emerging economy, India’s representative to the institution said.

“I’m not totally pessimistic but I’m not at all optimistic,” Arvind Virmani, who represents India and three other countries on the IMF board, said in an interview yesterday in Washington. “There is no indication which suggests that the result will be any different this time.”

Officials including U.K. Chancellor of the Exchequer George Osborne and Italian Prime Minister Silvio Berlusconi have said French Finance Minister Christine Lagarde should replace countryman Dominique Strauss-Kahn, who resigned last week following his arrest on sexual assault charges in New York, as the IMF’s chief.

Virmani said the European stance contradicts calls by the Group of 20, which includes the advanced economies plus major emerging ones, for a selection process based on merit rather than geography.

Virmani and IMF representatives for Russia, China, South Africa and Brazil yesterday released a statement urging “abandoning the obsolete unwritten convention” by which the IMF leader is always a European and the head of the World Bank an American. Countries from the European Union hold about 31 percent of the votes at the agency and the U.S. 17 percent.

“If the Fund is to have credibility and legitimacy, its managing director should be selected after broad consultation with the membership,” the directors from the so-called BRICS nations wrote.

Virmani said he is consulting with his counterparts from Brazil, Russia and China about putting a candidate forward.

Advising Friends

“At this point in time if I was advising my own friends, I would have to frankly tell them that ‘the probability of your winning is minuscule and you’re really competing for second place,’” he said. At the same time “there is still perhaps merit in saying that ‘we tried’ even though we knew that it would fail.”

Mexico is nominating its central bank governor, Agustin Carstens, who in an interview yesterday said it was too early to say which countries will back him.

German Chancellor Angela Merkel told reporters last week that Europe’s sovereign-debt crisis “speaks for a European candidate.”

Virmani objected to that logic.

“There was no discussion about who’s the best, there were statements, saying that ‘we have to have a European because there’s a European crisis,’” said Virmani, who also represents Bangladesh, Bhutan and Sri Lanka.

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The International Monetary Fund said it aims to complete the selection of a successor to Dominique Strauss-Kahn by June 30.

Countries will be able to nominate candidates for the managing director’s position between May 23 and June 10, the Washington-based IMF said in a statement today. The board will meet with all candidates if there are fewer than four and with a short list if there are more.

The procedure “allows the selection of the next managing director to take place in an open, merit-based, and transparent manner,” said Shakour Shaalan, the senior member of the 24- person board.

The IMF said the board’s objective is to select the managing director by consensus.

French Finance Minister Christine Lagarde emerged as the leading contender to replace Strauss-Kahn, who was indicted yesterday on charges including attempted rape, as European officials moved to maintain control over the institution.

Officials in emerging markets including Thailand, Russia and South Africa said the next IMF managing director should come from a developing nation even as they failed to unite behind one candidate the way Europe coalesced around Lagarde.

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A loss of momentum on Wall Street, dropping commodity prices and worries over Europe’s debt problems caused Asian stock markets to sag Monday.

Oil prices fell below $99 a barrel as crude became more expensive for investors with other currencies amid gains in the U.S. dollar.

Doubts about the strength of the U.S. economic recovery have weighed on Wall Street and markets elsewhere recently. After sailing through their best first quarter since 1998, U.S. stocks are starting to lose some momentum.

The Standard and Poor’s 500 stock index, a broad market benchmark, is up just 1 percent this quarter after jumping 5.4 percent in the first three months of the year. That weaker performance is in large part because of conflicting data about the health of the U.S. economy.

Sluggishness on Wall Street was a sign that “investors continued to worry about slowing global growth and European debt concerns,” said Ben Potter of IG Markets in Melbourne.

Meanwhile, the arrest Saturday in New York of International Monetary Fund head Dominique Strauss-Kahn on attempted rape charges was unlikely to directly affect Asian markets.

But the incident might prove a distraction in Europe, where the the IMF and Strauss-Kahn have been heavily involved in trying to resolve debt crises in countries such as Portugal and Greece, said Jackson Wong, vice president at Tanrich Securities in Hong Kong.

Japan’s Nikkei 225 index dropped 0.9 percent to 9,560.46 with banking shares incurring losses following comments last week by Chief Cabinet Secretary Yukio Edano suggesting that Tokyo Electric Power Co. will need help repaying its debts. Mitsubishi UFJ Financial Group Inc. lost 1 percent. Mizuho Financial Group and Sumitomo Mitsui Financial Group Inc. both lost 1.5 percent.

Edano said Friday that TEPCO may need adjustments to its loans to help it cope with financial losses incurred following twin natural disasters on March 11 _ an earthquake and subsequent tsunami that smashed into one of the company’s nuclear plants in northeastern Japan.

The utility has been struggling for two months to bring a radiation leak from the crippled Fukushima Dai-ichi plant under control. TEPCO has sought a 2 trillion yen ($24.8 billion) loan to tide it through the initial emergency period. It also expects to pay 50 billion yen ($620 million) in initial compensation to nearly 80,000 residents evacuated from around the plant. Overall damages are expected to be much higher.

South Korea’s Kospi lost 0.5 percent to 2,110.99, and Hong Kong’s Hang Seng was down 1.2 percent to 23,000.44. Benchmarks in Australia, Singapore and Taiwan were also lower, while those in New Zealand and the Philippines rose.

Falling commodities prices were keeping stock investors at bay, said Wong. Oil, for example, was nearly $114 a barrel at the end of April but is now below $100 per barrel. A slump on Wall Street on Friday also weighed on investor nerves.

On Friday, the Dow Jones industrial average lost 100.17 points to close at 12,595.75. The S&P 500 fell 0.8 percent to 1,337.77, and the Nasdaq lost 1.2 percent to 2,828.47.

Benchmark crude for June delivery was down 98 cents to $98.67 a barrel in electronic trading on the New York Mercantile Exchange. The contract settled at $99.65 per barrel Friday, up 68 cents.

In currencies, the euro fell to $1.4089 from $1.4110 in late afternoon trading Friday in New York. The dollar strengthened to 80.95 yen from 80.84 yen.

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Turkey’s prime minister said Tuesday that Moammar Gadhafi must “immediately step down,” a major escalation of Turkish pressure on the Libyan leader with whom Turkey has long-standing ties.

Gadhafi has ignored calls for change in Libya and instead preferred “blood, tears and pressure against his own people,” Recep Tayyip Erdogan told a news conference in Istanbul. “Gadhafi must take a historic step and withdraw, for the future of Libya, its peace and prosperity.”

Previously, Turkish leaders had gently urged Gadhafi to meet demands for change from the rebellious opposition, then suggested that he step down. But Erdogan’s comments on Tuesday were his strongest public message to Gadhafi yet.

Last month, Erdogan proposed a roadmap for peace in Libya, urging forces loyal to Gadhafi to withdraw from besieged cities and calling for the establishment of humanitarian aid corridors and comprehensive democratic change.

On Monday, Turkey temporarily closed its embassy in the Libyan capital due to deteriorating security and its staff were evacuated to Tunisia. On Sunday, vandals burned the British and Italian embassies and a U.N. office in Tripoli. The U.N. has withdrawn its international staff. The Turkish consulate in rebel-controlled Benghazi, Libya, remains open.

Turkey initially balked at the idea of military action in Libya, but citing its responsibilities as a NATO member it took part in the enforcement of an arms embargo on Libya while volunteering to lead humanitarian aid efforts.

Turkey has vast trade interests in Libya, where Turkish companies have been involved in lucrative construction projects worth billions of dollars, building hospitals, shopping malls and five-star hotels before the chaos.

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Some 25,000 Japanese troops are fanning out on the wreckage-strewn northeastern coast Monday in a massive search for thousands of bodies still missing from last month’s earthquake and tsunami.

Backed by dozens of boats and aircraft, the soldiers are scouring the region for remains swept to sea or buried under masses of rubble.

The operation is the third intensive military search for bodies since the disaster that killed up to 26,000 people low fee cash advance. Some 12,000 remain missing and are believed dead. Monday’s search is an all-out effort to recover any remains for their families.

The soldiers are combing through the rubble and navy boats and divers are searching the waters up to 12 miles (20 kilometers) off the coast.

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South African inflation accelerated to a nine-month high of 4.1 percent in March as food and fuel prices climbed, adding to pressure on the central bank to raise interest rates from a 30-year low.

The inflation rate rose from 3.7 percent in February, the Pretoria-based statistics office said on its website today. The median estimate of 21 economists surveyed by Bloomberg was for the rate to increase to 4 percent. Prices advanced 1.2 percent in the month.

The Reserve Bank, which left its benchmark interest rate unchanged at 5.5 percent in March, is monitoring to determine whether rising food and fuel prices are pushing up costs more broadly in the economy, Deputy Governor Daniel Mminele said on April 16. While the bank expects inflation to remain inside its 3 percent to 6 percent target range until the end of 2012, there are “significant upside risks” to the outlook, he said.

“Higher food and fuel prices are likely to be the dominant inflationary theme over the next few months,” said Carmen Altenkirch, an economist at Nedbank Group Ltd. in Johannesburg. “The upside to our interest-rate forecast has increased over the past month. The Reserve Bank may opt to react pre-emptively, hiking rates in the second half of the year.”

The rand was at 6.7805 against the dollar as of 11:16 a.m. in Johannesburg from 6.7883 before the data was released. The yield on the R157 government bond, due 2015, was unchanged at 7.66 percent.

Gasoline Prices

The government boosted gasoline prices by 5.7 percent this month and 4.8 percent in March. White corn, a staple food in South Africa, has surged 31 percent on the South Africa Futures Exchange in the past six months.

The Reserve Bank cut its key rate three times last year to spur growth in Africa’s biggest economy, which the bank expects to expand 3.7 percent this year.

Consumers are starting to benefit from lower interest rates, with retail sales probably increasing an annual 7.1 percent in February from 6.4 percent in the previous month, according to the median estimate of 16 economists surveyed by Bloomberg. The statistics office is due to publish the data at 1 p.m. local time today.

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The four companies that are still receiving the largest amounts of government bailout aid won’t be able to raise the amount of cash they pay out to their top executives this year, the administration’s pay czar has ruled.

The decisions, released late Friday, cover 2011 compensation for the top 25 executives at General Motors Co., Chrysler, American International Group Inc. and Ally Financial Inc., the former financing arm of GM. The rulings clear the way for millions of dollars in salary and bonuses to be paid out by companies that are still repay the billions in aid they received during the financial crisis from the government’s $700 billion Troubled Asset Relief Program.

While the companies can’t give cash raises, they are being allowed to boost the value of deferred stock awards to their executives. The Treasury Department defended that decision, saying it is in line with pay guidelines that it used to make compensation decisions in 2009 and 2010.

The government’s findings do not identify the executives by name but only by salary rankings.

The highest-paid executive at insurance giant AIG will total compensation of $10.5 million in 2011, including a $3 million salary, the largest of any of the pay packages approved Friday by the pay czar. AIG confirmed in a filing with regulators Friday that President and CEO Robert Benmosche’s pay will stand at $10.5 million this year, the same package he received in 2010.

GM’s highest-paid executive will receive $1.7 million in salary for 2011 and performance-based stock awards that will bring total compensation to $9 million. The highest-paid executive at Ally Financial will receive no cash salary in 2011 but can be granted performance-based stock awards worth $9.5 million. GM is headed by Chairman and CEO Dan Akerson, and Ally’s CEO is Michael Carpenter.

AIG nearly went under during the 2008 financial crisis. It had written insurance on the value of hundreds of billions in mortgage investments held by financial institutions. When the investments lost value, AIG could not afford to make good on its contracts. It took government help to stay out of bankruptcy and received a bailout package with a total value of $182 billion. The government got a 92 percent stake in the company and hopes to start selling the shares soon to help recoup its money. The company also has been selling off assets to repay the aid free credit score online.

Taxpayers provided a total of $49.5 billion to GM as it went through a bankruptcy reorganization in 2009. The Treasury Department has trimmed its stake in GM to 26.5 percent of the company from 61 percent, when it sold $23.1 billion of GM stock at an initial public offering in November. Treasury will need to sell its remaining GM shares at an average price of $53 to break even on the bailout.

Ally, which is 74 percent owned by the government, announced this week that it is preparing an initial public stock offering as a way to repay a portion of the $17.2 billion in aid it received.

The highest-paid executive at Chrysler, Sergio Marchionne, who is head of both Chrysler and Italy’s Fiat, is not affected by the pay restrictions because he receives his salary from Fiat. The pay czar’s filing showed that the second-highest paid executive at Chrysler will receive $500,000 in cash salary this year and total compensation of $1.18 million.

The compensation decisions were announced by Patricia Geoghegan, who succeeded Kenneth Feinberg last September. Geoghegan, a tax and compensation lawyer, came to Treasury after retiring as a partner from the New York law firm of Cravath, Swaine and Moore.

Feinberg’s departure last fall ended a contentious 14-month career as pay czar in which critics contended he had not done enough to reign in excessive salaries and bonuses at companies rescued by billions of dollars of taxpayer support. Feinberg now oversees a $20 billion fund created by BP PLC to compensate victims of the Gulf of Mexico oil spill.

Feinberg argued that his efforts had laid the foundation for a new compensation system based on longterm performance.

In a final report, Feinberg recommended that future compensation decisions should place limits on guaranteed cash payments and require that pay packages have a significant performance component.

Sen. Bernie Sanders, I-Vermont, one of Feinberg’s most vocal critics, contended that Feinberg had not been tough enough in cracking down on the pay excesses on Wall Street that had contributed to the financial crisis by encouraging excessive risk-taking.

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Washington has started getting ready for a possible government shutdown.

Behind the scenes, federal agencies are working on their plans for shutting down operations and deciding how many workers they need to perform essential operations.

Congress has one week — until the end of March 4 — to pass another short-term bill to fund federal agencies. If they fail, agencies are legally obligated to perform only essential activities necessary to protect life and property.

In other words, agencies have to move at warp speed to quickly wind down most operations. If they don’t, they face legal ramifications for spending money they’re not allowed to.

The government would keep essential services — like air traffic control and the national security apparatus — in full operating mode.

Each agency has its own shutdown plan. To prepare for next week, the agencies are updating their plans and submitting them to the White House’s Office of Management and Budget.

Obama administration officials have declined to release those plans, which include details like how many employees are needed to perform essential functions, and how long it will take each agency to complete a shutdown.

The budget office maintains the agencies are prepared.

"OMB is prepared for any contingency as a matter of course — and so are all the agencies," Kenneth Baer, OMB communications director, said earlier this week in a statement. "In fact, since 1980, all agencies have had to have a plan in case of a government shutdown, and they routinely update them."

Both Democratic and Republican leaders in Congress have said they want to avoid a shutdown.

But OMB is watching Congress. According to the guidance distributed to other federal agencies, OMB says it will monitor the status of congressional actions and notify agencies if shutdown plans are to be implemented.

The last time the federal government went dark was during the Clinton administration: five days in November 1995 and another 21 days ending in January 1996.

At the time, Sen. Dianne Feinstein asked the Government Accountability Office to prepare a report that detailed how many workers would be kept on the job.

Relying on each agency’s shutdown plan, the GAO found that some agencies, like NASA, would furlough more than 90% of its employees. Meanwhile, the Justice Department would retain 75% of its staff.

Of course, 15 years have passed since the GAO studied the issue, and plans might look significantly different. And in practical terms, agencies are allowed some wiggle room in who they keep on the job.

During the Clinton-era shutdown, new Social Security claims weren’t being processed because the Social Security Administration furloughed 61,415 employees. As the shutdown wore on, the agency adjusted its plan and recalled workers to start processing new claims.

Still, a lot of services provided by the government would go dark.

In the last major shutdown, the government closed 368 National Park Service sites, along with national museums and monuments, according to a Congressional Research Service report.

In addition, 200,000 passport applications went unprocessed, and toxic waste cleanup work at 609 sites stopped, according to the same report. The National Institutes of Health stopped accepting new clinical research patients, and services for veterans, including health care, were curtailed. 

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Vietnam devalued the dong by about 7 percent, the most since at least 1993, risking faster inflation to curb the nation’s trade deficit and narrow the gap between official and black-market exchange rates.

The dong slumped to as weak as 20,893 per dollar, compared with 19,498 yesterday, and was at 20,850 at 12:05 p.m. in Hanoi. The State Bank of Vietnam fixed the reference rate for the currency at 20,693 versus 18,932 yesterday. The trading band was narrowed to 1 percent on either side of the rate, compared with 3 percent previously.

Vietnam’s fourth devaluation in 15 months takes place with its inflation rate at the fastest in almost two years, and with the International Monetary Fund describing its foreign-currency reserves as being “low.” While the whole of Asia outside Japan is struggling to curb inflation, countries such as China, Taiwan and Singapore have strengthening currencies and rising foreign- exchange reserves.

“There is still a crisis of confidence out there,” said Nizam Idris, a strategist at UBS AG in Singapore. “There’s still more pressure for the currency to depreciate some more.”

The devaluation may ease a drop in foreign-exchange reserves and calm the market at the risk of boosting imported inflation, wrote Tai Hui, the Singapore-based head of Southeast Asian economic research for Standard Chartered Plc.

Still, Vietnam also needs “a broader set of policies to restore macroeconomic stability,” said Benedict Bingham, the IMF’s senior resident representative in Vietnam poor credit personal loans. “Monetary policy will need to focus more decisively on containing inflation, and fiscal policy will need to be put on a clearer consolidation path to contain public debt.”

The monetary authority had already devalued the dong in November 2009 and February and August last year, amid concern the nation will run short on foreign capital needed to fund a trade deficit, which reached $1 billion in January, according to preliminary government figures.

While the official exchange rate of the currency had been little changed since the August 2010 devaluation, on the black market the currency weakened from about 19,500.

“We paid 20,500 per dollar in December and 20,800 in January,” said Alan Young, chief operating officer of Australian-listed Vietnam Industrial Investments Ltd., which runs steel plants in the northern port city of Haiphong. “You just can’t buy dollars at the official rate.”

Currency reserves probably fell to about $13.6 billion at the end of last year, down from $14.1 billion in September and $23.9 billion in 2008, according to Citigroup Inc.

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Ireland’s parliament is being dissolved Tuesday for a long-awaited election, Prime Minister Brian Cowen announced in a farewell address tinged with regret over the nation’s plunge to the brink of bankruptcy.

Cowen declared a formal end to his government two months after he was forced to negotiate a euro67.5 billion ($92 billion) loan package from the European Union and International Monetary Fund.

The premier said the new parliament would convene March 9, but in keeping with Irish practice, did not announce an election date. That was to be revealed later Tuesday after Cowen meets the symbolic head of state, President Mary McAleese. Analysts forecast Feb. 25 as the most likely election date.

Cowen told a silent, somber parliament that his 2 1/2 years as prime minister “have been a time of great trial and test. I believe we have worked hard to correct past failures and to secure the future recovery of our country.”

Cowen agreed to an early election, rather than trying to serve his full term to mid-2012, after suffering a string of political humiliations and losing his parliamentary majority last month.

Before making his final speech to Dail Eireann, Ireland’s parliament, the 51-year-old Cowen had already announced his retirement from politics after a 26-year career. He became Ireland’s first sitting prime minister not to seek re-election to parliament.

Cowen said the winners of the election would wield the power to continue his government’s policies of bank bailouts and deep austerity measures _ and warned that taking another course would lead to even greater economic disaster on line pay day loans.

“This election will define our economic future. It will decide whether Ireland moves forward from this recession, or whether we prolong it or indeed succumb to it,” he said.

After Cowen ended his speech, only the lawmakers from his own Fianna Fail party stood to applaud him.

Ireland’s economy boomed from 1994 to 2007 on the back of heavy foreign investment and a homegrown property bubble. But Irish banks borrowed recklessly on international markets and loaned heavily to construction barons in Ireland, Britain and the United States.

When the global credit crisis in 2008 exposed Ireland’s exceptional vulnerability to property loans, Cowen’s government sought to prevent the collapse of Irish banks by offering them blanket insurance on all their deposits and borrowings from international creditors. That strategy has left Irish taxpayers with a bank bailout bill likely to top euro50 billion ($70 billion), nearly a third of Ireland’s gross domestic product.

The bank-bailout bill helped to drive Ireland’s 2010 deficit to 32 percent of GDP, a postwar European record. Ireland is now facing 2011 spending cuts and tax rises totaling an unprecedented euro6 billion ($8.2 billion), a measure likely to increase unemployment already standing at a 17-year high of 13.5 percent.

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