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Macroscope
Opinion
Anthony Rowley
Anthony Rowley

Macroscope | Next IMF chief must stand up to Trumpian protectionism, but need not be European

  • Efforts to change the age limit for the new IMF head look like a ploy to keep the job in European hands, when what’s needed most is knowledge and skill for building global consensus

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International Monetary Fund managing director Christine Lagarde (right) will replace Mario Draghi (left) as president of the European Central Bank in November. Draghi has all the qualifications to replace Lagarde at the IMF also, were it not for the organisation’s age limit. Photo: EPA
Anthony Rowley

Rarely has the need to select a new head of the International Monetary Fund on merit been greater than now, and yet the usual manoeuvring to ensure that the job goes to someone of European nationality continues. As a result, potentially strong candidates from, say, China or Japan and elsewhere in and beyond Asia are sidelined.

Christine Lagarde is stepping down after eight years at the helm of the IMF to head the European Central Bank, which will benefit from her presence – as will Europe as a continent. She has brought gravitas, statesmanship (or stateswomanship) and administrative skills to the task of IMF managing director.
Her successor will need these skills and more as the global economy enters a very tricky phase where it could become stranded in the shoals of recession or even founder on the rocks of trade protectionism, slumping production and investment, and even an international financial crisis.
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The challenges are in fact awesome. The multilateral consensus which birthed the IMF and its “Bretton Woods sister” the World Bank 75 years ago is unravelling. Securing an international policy consensus in times of trade and economic war (let alone peace) is becoming that much more difficult.

Ad hoc arrangements such as the Group of Twenty advanced and emerging economies, the Group of Seven and various other “G” combinations are also being undermined by the fracturing of political consensus. That is one reason why the world is drifting rudderless towards economic crisis.

To make his or her voice heard above the din of political populism, the new head of the IMF must have the authority that comes from a sound working knowledge of economics, finance and governance – with a liberal dash of gravitas and diplomacy added to the mix.

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