Christine Lagarde, head of the International Monetary Fund, is on a mission. She’s off to three countries in Southeast Asia to try to show that the IMF is still relevant to a region that is increasingly self-reliant, and also to express gratitude for contributions Malaysia and the Philippines made to boost the IMF’s funds when the U.S. and Canada declined to do so.
Bloomberg reported Wednesday that Lagarde was to conclude her week-long Asian odyssey in Cambodia, where the East Asia Summit will begin on Tuesday. At the summit she will meet with leaders of the Association of Southeast Asian Nations and the heads of other countries, including President Obama.
After the 1997 Asian financial crisis compelled some countries to adhere to IMF austerity policies, feelings ran high against the institution and spurred nations in the region to take steps to handle their own financial well-being. To that end, said Eswar Prasad in the report, they undertook to boost their own currency reserves and strengthen ties with one another.
Prasad, a former head of the China division at the IMF and now a senior fellow at the Brookings Institution, said Asian countries did not need help from the Washington-based financial body during the 2008 financial crisis and are working to ensure that they will not need to do so in the future. He was quoted as saying, “The main risk for the IMF is that it comes to be seen as less relevant to the region, both in terms of the advice it has to offer and in its role as provider of a financial safety net.”
Anoop Singh, who heads the IMF’s Asia-Pacific department, characterized Lagarde’s tour goal as to “engage, listen and exchange views about the global economy.” Singh added, “Asia is now the global growth leader and you see how much many Asian countries have improved the fundamentals over time. There are clearly many lessons the world can learn from Asia.”