While the RBI Governor Raghuram Rajan has done the right thing by clarifying that he is not running for the IMF chief’s job, his diverse experience of handling issues related to both the developed and the emerging nations makes him an ideal candidate for this role.
The Reserve Bank of India (RBI) Governor Raghuram Rajan is at his impeccable best in quelling any speculation about taking over as the International Monetary Fund (IMF) chief from the current Managing Director, Christine Lagarde, whose 5-year term will end in July next year.
Even a hint of Rajan being interested in the job will clearly impact his functioning as the RBI governor as his 3-year term with RBI will come to an end only in September next year.
But, with the uncertainties in the global economy likely to continue as China rebalances its export-led growth strategy, other countries like Russia and Brazil facing serious economic challenges, and global growth expected to remain weak – it will be a good idea for the IMF to let Raghuram Rajan lead the discourse for bringing global growth back on track and improve its waning clout also.
His experience, credibility and foresight in predicting problem spots has been well established already, and he is also well attuned to the IMF functioning.
Speaking at the RBI on ‘Spillovers from Unconventional Monetary Policy – Lessons for Emerging Markets’ during her visit to India in March, Lagarde had said: “It is indeed a privilege to share the stage with Dr Rajan, one of the world’s most highly regarded financial economists, one whom the Fund is fortunate enough to have had as its Economic Counselor. Raghu certainly has been very busy since he took over as governor of the RBI in September 2013. He has deftly steered the Indian economy to safer waters after it was hit by the market turmoil following the ‘taper tantrum’ episode of mid-2013…”.
There is also a realisation in the IMF that the fund committed a big mistake by not listening to his forecast of the 2008 global economic crisis.
Clearly, Rajan has the capability to blend the best of developed and emerging nations’ needs to find out workable solutions.
At a time when India has emerged as the fastest growing country in the world, thanks to the new GDP series, it might also be an opportune time to end the European monopoly and hand over the reigns of IMF to an Indian economist.
Rajan on his part has done the right thing by saying that, “It’s not the job that I have applied for. It’s not a job that I am running for,” and pointing out that he will have to take a decision about his next assignment only when his term ends at RBI – but, that hardly takes away anything from the fact that he could be the best bet for the IMF as its next chief.