Abu Dhabi, UAETuesday 22 October 2019

IMF selects World Bank chief as new head

Kristalina Georgieva from Bulgaria replaces Christine Lagarde, who is the new head of the European Central Bank

The IMF on Wednesday formally selected Kristalina Georgieva of Bulgaria to be only the second woman to lead the 189-member institution. AFP
The IMF on Wednesday formally selected Kristalina Georgieva of Bulgaria to be only the second woman to lead the 189-member institution. AFP

The board of the International Monetary Fund, which represents 189 countries, selected Kristalina Georgieva as managing director for a five-year term starting October 1. She will succeed Christine Lagarde, who is going on to head the European Central Bank from next month.

"I am deeply honored to have been selected ... I come as a firm believer in its mandate to help ensure the stability of the global economic and financial system through international co-operation. Indeed, in my view, the fund’s role has never been more important," Ms Georgieva said on Wednesday.

Ms Georgieva, 66, who was chief executive of the World Bank, is the first person from an emerging-market economy to lead the IMF since its inception in 1944. She joins the Washington lender at a tumultuous time – a sluggish global economy fraught by a trade war between the US and China, the uncertainty of Brexit and rising geopolitical tensions in the Middle East.

"It is a huge responsibility to be at the helm of the IMF at a time when global economic growth continues to disappoint, trade tensions persist, and debt is at historically high levels. As I noted in my statement to the Executive Board, our immediate priority is to help countries minimise the risk of crises and be ready to cope with downturns. Yet, we should not lose sight of our long-term objective – to support sound monetary, fiscal and structural policies to build stronger economies and improve people’s lives. This means also dealing with issues like inequalities, climate risks and rapid technological change."

Discord between the US and China, the world’s two biggest economies, forced the World Bank and the IMF to revise down their projections for the world economy this year. In April, the IMF revised its global growth forecasts for the year to 3.3 per cent from 3.5 per cent. It was the third revision by the IMF in six months.The 2019 outlook is the weakest since the 2007-08 financial crisis. Global equities swung wildly earlier this year when US President Donald Trump threatened to further escalate the trade war and eventually imposed an additional 15 per cent tariff on $112 billion (Dh411bn) in Chinese goods on September 1.

Ms Georgieva, a native of Bulgaria, will be assisted by four IMF deputy managing directors. Prior to heading the World Bank from 2017-2019, she served at the European Commission overseeing budget and staff.

Backed by French President Emmanuel Macron, last month she won support from the rest of the EU and tacit backing from the US to head the IMF which has assets of $1 trillion.

As part of an informal understanding between the US and Europe, the leader of the IMF is usually a European while the World Bank chief is an American.

Updated: September 26, 2019 02:40 PM

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