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Rajan to be IMF chief?
RBI Governor Raghuram Rajan is expected to be made the Director-General of the International Monetary Fund (IMF) if some reports emanating from top financial sources have to be believed. The Europeans were mainly occupying this coveted position since its inception. Rajan earlier worked as IMF chief economist. He was educated in United States whose say is critical for the selection of this top position in one of the Bretton Woods institutions.
Hyderabad: RBI Governor Raghuram Rajan is expected to be made the Director-General of the International Monetary Fund (IMF) if some reports emanating from top financial sources have to be believed. The Europeans were mainly occupying this coveted position since its inception. Rajan earlier worked as IMF chief economist. He was educated in United States whose say is critical for the selection of this top position in one of the Bretton Woods institutions.
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His commitment to open financial markets with proper regulation seems to be his USP in the post- recession period. The world economy is resurfacing from the global financial crisis of 2008. Writing in Business India, Brij Khindaria, an international affairs columnist said that early whispers to this effect had emerged in the corridors at the spring 2015 meeting of the World Bank and IMF.
The current chief of IMF, Christine Lagarde will retire in 2016. Rajan’s tenure as Governor of RBI also ends in 2016. The IMF along with World Bank has emerged to rebuild the world economic and financial system ravaged by Second World war. But, Europe still enjoys disproportionately higher clout at IMF even though European economy lost its might and presently passing through difficult times. Even the first World is acknowledging that the world is witnessing an Asian century.
The World Bank and IMF duo represent Western hegemony over global finance. But, the Third World is challenging this with the formation of institutions like Asian Infrastructure Investment Bank (AIIB), the New Development Bank (previously called BRICS Development Bank). The West has already initiated reforms in IMF-World Bank governance. Rajan’s likely elevation would be a continuation to this change at IMF-World Bank.
In fact United States tried to scuttle the Chinese initiative of starting AIIB. But, its allies except Japan defied Washington to seek membership in this Asian organization. India and china are partners in BRICS, AIIB. New Delhi is expecting Chinese support for the candidature of Raghuram Rajan as the latter also seeking an end to western hegemony over global money.
The United States is concerned over growing economic and military power of China and wants India to join it in containing China. India with its skepticism over its giant neighbour is not averse to Washington‘s game plan. This can also be reason for US preferring an Indian to a European to head the IMF.
