BSP chief says Asian IMF leader should seriously be considered

MANILA, Philippines -  Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. said the next managing head of multilateral lender International Monetary Fund (IMF) should come from Asia as the region continued to fuel global economic growth amid the uncertainties in advanced economies led by the US and Europe.

Tetangco told reporters that emerging economies in Asia including the Philippines should rally behind a single candidate that would replace resigned IMF chief Dominique Strauss-Kahn who is now under house arrest after being accused of sexual assault by a chambermaid of a hotel in New York City.

“Because of the shift in economic power that has taken place in the past two years an Asian leader should seriously be considered,” he stressed.

Names of several non-Europeans have been put forward as possible successors including French finance minister Christine Lagarde, former British prime minister Gordon Brown, former Turkey finance minister Kemal Dervis, Israel central bank chief Stanley Fischer, and Mexico central bank chief Agustin Carstens.

Earlier, Finance Secretary Cesar Purisima said discussions in choosing the new IMF leader should take into consideration the increasingly changing global economic landscape.

“The selection process for the new managing director of the IMF should be global in substance, not just in form. The selection process should be characterized by transparency and inclusiveness. Gone are the days when the future of the world economy is left in the hands of only a few countries,” Purisima said.

Asked who among Asian leaders could fit well on the job, Purisima said Singapore Finance Minister Tharman Shanmugaratnam, who is also currently the chairman of the International Monetary and Finance Committee, the IMF advisory committee, is qualified.

“I think Minister Tharman is certainly well qualified. As you all know in the late 90’s, Asia underwent in its own debt contagion and I think that experience will come in handy in helping our European friends deal with their own debt crisis.”

“Beyond Mr. Tharman, maybe we should look at leaders in China and probably in Latin America.”

The Finance secretary however admitted having an Asian IMF chief will be a difficult thing to do.

He cited the IMF weighted voting system that gives more votes to developed nations. Among the top 30 economies that enjoy the majority of IMF voting rights, only seven were from Asia.

These are Japan with 6.3 percent of voting rights, China with 3.8 percent, Saudi Arabia with 2.8 percent, India with 2.4 percent, Korea with 1.4 percent, Indonesia with 0.9 percent, Malaysia with 0.7 percent. The US has most of the voting rights at 16.8 percent while the Philippines has only 0.4 percent voting rights.

“That is why countries should have an open discussion on this. Developed nations should also have open minds while emerging markets should get their act together to come up with a lone Asian candidate that will lead the international organization. Clearly, it is high time for Asia to lead a new brand of leadership in the IMF,” Purisima added.

Based on its latest World Economic Outlook, the IMF sees the world economic growth slowing down to 4.4 percent this year from 5.0 percent last year.

The report said advanced economies led by the US would expand at a slower pace of 2.4 percent this year from 3.0 percent last year while emerging and developing economies would expand by 6.5 percent from 7.3 percent.

The economic growth in Asia would likewise slowdown to 8.4 percent this year from 10.5 percent last year.