July 13th, 2011 | China Daily Zhu moves up IMF ladder
Zhu Min, special advisor to the head of International Monetary Fund (IMF), has been nominated as a deputy managing director of the fund.
If approved by the IMF board, Zhu will become the first Chinese national to hold such a senior position at the international body.
IMF Managing Director Christine Lagarde announced her appointment of Zhu in a statement on Tuesday.
Zhu moves up IMF ladder
Meanwhile, David Lipton, a White House economic aide, was selected to take over for the current first Deputy Managing Director John Lipsky. The No 2 position has long been held by a US national.
Besides Lipsky, who is expected to retire soon, the other current deputy managing directors are Naoyuki Shinohara, of Japan, and Nemat Shafik, an Egyptian national.
Zhu, born in 1952, was the former deputy governor of the People’s Bank of China, the central bank. He joined the IMF a year ago as a special advisor to former managing director Dominique Strauss-Kahn, who resigned on May 18, three days after being arrested by New York police on sexual assault allegations. Strauss-Kahn was released 10 days ago after the credibility of his accuser, a hotel maid, came into question.
The IMF announcement said that Zhu will assume his duties in the newly created deputy managing director position on July 26, working with the other three deputy managing directors in support of the managing director.
Lagarde also stated in her first press conference last week that she will be more inclusive of emerging markets.
“Zhu brings a wealth of experience in government, international policy making and financial markets, strong managerial and communication skills as well as an institutional understanding of the fund, and I look forward to his counsel,” Lagarde said in Tuesday’s announcement.
“As deputy managing director, he will play an important role in working with me and the rest of my management team in meeting the challenges facing our global membership in the period ahead, and in strengthening the fund’s understanding of Asia and emerging markets more generally,” Lagarde said.
Edwin Truman, senior fellow at the Peterson Institute for International Economics, told China Daily that Zhu’s nomination is not a surprise.
“Indeed, I suspect that it was agreed well before Strauss-Kahn was forced to step down. Christian Lagarde has merely acted on that prior agreement,” said Truman, a noted economist and an expert on the IMF.
He said the appointment makes sense on its merits. “Zhu has demonstrated a sophistication and sense of responsibility as an advisor to the managing director over the past year or so. He clearly is more than a representative of China in the management of the IMF, and his presence will help to strengthen the management team,” Truman said.
“It’s an overdue recognition of China’s weight in the world economy. And Zhu Min is an excellent person to hold this new position,” said Sebastian Mallaby, director of the Maurice R. Greenberg Center for Geoeconomics Studies at the Council on Foreign Relations, a nonpartisan think tank.
“Zhu was already a de facto deputy managing director in terms of his responsibility and power, but the formalization of his role is symbolically quite important,” said Eswar Prasad, the Tolani Senior Professor of Trade Policy at Cornell University.
“The move is an acknowledgment of China’s increasing prominence in the fund’s power structure. It signals that the world community expects China to play an increasingly important role on the global economic stage,” said Prasad, also a senior fellow at the Brookings Institution and a former chief of the IMF’s China Division and Research Department.
However, Prasad warned that the appointment makes the IMF top management regionally unbalanced, with two of the deputy managing directors from Asia.
He said the fact that the head of the International Monetary and Finance Committee (IMFC), which oversees the IMF’s operations, who is also from Asia, skews things further.
Singapore Minister of Finance Tharman Shanmugaratnam was appointed to head the IMFC four months ago after its chief, Yousesef Boutros-Ghali, Egypt’s former minister of finance, resigned on Feb 4.
“Latin American governments, which traditionally held one slot among the top management positions, are likely to be particularly displeased by this outcome, which shuts them out completely,” Prasad said.
“China has been appeased, but the challenge now for Lagarde and her management colleagues is to rebuild other emerging markets’ trust in the institution,” he said.
By Chen Weihua