On September 26, Kristalina Georgieva, who served as a Bulgarian economist in a communist country has been positioned as the new Chief of the capitalism’s premier institutes, 189-nation International Monetary Fund. Georgieva was selected by the executive board of directors of IMF on September 25, as the new fund’s Managing director. She is one of the top officials in the World Bank. She will replace Christine Lagarde who will re-positioned as the head of the European Central Bank.
The International Monetary Fund is the lending institutions which provides countries with loans and funds at the time of crisis to help overcome the time of distress. The new Chief of IMF is appointed at a time when there is economic turmoil. The global economy is facing slowdown and economic crisis due to tension among the world’s biggest economies China and US which are engaged in a trade war. The World economist has predicted that according to the current scenario the Global economy is progressing towards recession, which will soon hit the markets. As per the reports Argentina took the largest loan of $57 billion from IMF due to economic downfall. This bailout was considered as the largest of all time.
Georgieva after she was approved by the 24-member nomination board as the Chief, talked to reporters about the challenges that need to be addressed which include the declining global economic growth, the Trade wars and the high debt burden in several countries. In the interview to the international media, she said “ Warning signals are flashing and we must be ready to be tested,” she said. “My immediate priority for the IMF is to help members minimize the risk of crises and be ready to cope with downturns.”.
Georgieva will officially take over as the New IMF Chief on October 1. Georgieva was at No. 2 position in World Bank since early 2017. She will be the first fund leader who belongs to an emerging economy rather than following the traditional European economic powers including Germany and France. During her tenure with World Bank, she was highly acknowledged for her efforts to increase the capital of the bank by $13 billion, along with a reform that justified the key goal in the Trump’s administration by reducing bank’s lendings to rich developing countries like China.
On the other hand David Malpass as the new leader of the World Bank. Malpass belongs to Trump administration, therefore, continuing the seven decades tradition where the leader of the World Bank belongs to America and the leader of IMF is chosen from a European country. The biggest challenge for Georgieva will be to manage the IMF’s huge loan to Argentina as the country is facing economic meltdown, as said by Eswar Prasad who is an economics professor at the Cornell University. Whereas David Lipton, Deputy IMF Managing Director told media that the funds provided to Argentina will remain on hold until the country is facing political and economic uncertainty.