Straits Herald August 25, 2019

Christine Lagarde resigned last month as the managing director of the International Monetary Fund (IMF) to take on a new role as the next head of the European Central Bank (ECB).

Her resignation takes affect on Sept 12, 2019.

International Monetary Fund (IMF) Managing Director Christine Lagarde smiles during a press conference in Kuala Lumpur on June 24, 2019. (Photo by Mohd RASFAN / AFP)

The question now falls on who shall be her replacement. As per tradition, the head of the IMF will be from Europe, while its sister organisation – The World Bank – will be headed by an American.

The European Union has nominated Kristalina Georgieva to lead the International Monetary Fund (IMF), ending weeks of impasse among 28 countries. Georgieva, from Bulgaria, is currently serving as chief executive of the World Bank.

Some Asian countries back this nomination.

IMF member countries can make nominations until September 6. After that, the IMF board will interview the nominated candidates and aim to complete the process of selecting IMF’s new head by October 4. The IMF has always been led by a European, since the institution’s creation. In contrast, the United States get to appoint the president of the World Bank.

Why not an ASEAN member?

Prominent Malaysian banker, Nazir Razak, makes a nonchalant argument on his Instagram feed on why not appoint the IMF chief to be someone from ASEAN.

nazir razak, IG

The three individuals Nazir placed on his Instagram post are former Malaysian central bank governor Zeti Aziz, former Singapore finance minister and current chair of Singapore’s central bank Tharman Shanmugaratnam, and current Indonesian finance minister Sri Mulyani Indrawati.

The three individuals do have a strong track record of building strong and stable economies within ASEAN.

The U.S. and China have been on a trade dispute for about two years. Their trade war is seen as the biggest stumbling block to global growth. At the same time, there is a strong focus on monetary policy – how central banks decide to support the various economies and whether their tools are still effective after nearly a decade since the sovereign debt crisis.