Fresh from yet another meeting in Brussels on Europe's debt crisis, International Monetary Fund (IMF) managing director Christine Lagarde yesterday kicked off a three-country tour of Southeast Asia, which is thriving after emerging from turmoil more than a decade ago.
Her week-long visit, which starts in Malaysia and includes the Philippines and Cambodia, builds on ties that took years to mend after the 1997 Asian financial crisis forced countries into unpopular IMF austerity policies. Now the fund is seeking to maintain its influence in a region that is helping power the world economy while reducing its reliance on the IMF's financial support.
These countries, which did not need IMF help during the global crisis of 2008, were building up foreign-currency reserves and boosting regional alliances to ensure they could weather future shocks on their own, said Eswar Prasad, a former head of the China division at the Washington-based lender.
"The main risk for the IMF is that it comes to be seen as less relevant to the region, both in terms of the advice it has to offer and in its role as provider of a financial safety net," said Prasad, now a senior fellow at the Brookings Institution in Washington.
For Lagarde, who spent most of her first 17 months at the IMF consumed by Europe's debt crisis, the trip also shows appreciation for the contribution Malaysia and the Philippines made to a US$461 billion increase in the fund's resources this year, when the US and Canada abstained.
The visit, which mixes meetings with officials and business leaders, concludes on November 20 in Cambodia with the East Asia Summit, where Lagarde will join leaders of the Association of Southeast Asian Nations and other countries, including US President Barack Obama.
Her goal was to "engage, listen and exchange views about the global economy", said Anoop Singh, who heads the IMF's Asia-Pacific department.
Recent economic data has shown signs of recovery in Asia. South Korea's unemployment rate fell to 3 per cent in October, the lowest in more than four years, amid a rebound in exports and industrial output, a report showed yesterday. Hong Kong may report faster year-on-year growth in the third quarter.