Manila, Philippines - The Philippines wants the replacement for jailed International Monetary Fund (IMF) chief Dominique Strauss-Kahn to come from the Asia-Pacific region where emerging market economies continue to fuel global economic growth.
Finance Secretary Cesar Purisima said in a text message to reporters yesterday that Asian economies continue to play an increasing role in global economic growth and thus are deserving of greater responsibilities in the IMF. In contrast, advanced economies like the US, European countries and Japan are slowing down.
“Given the urgent need for stable leadership in the IMF coupled with the shifting global economic landscape, wherein Asia increasingly plays a major role as a growth driver of the global economy, there is no time more fitting than now for an Asian leader to take the helm of such a distinguished organization,” Purisima stressed.
Strauss-Kahn announced his resignation on Thursday as head of the IMF, saying he had to focus on clearing his name in the sexual assault charges filed by a 32-year-old chambermaid in the posh Sofitel Hotel Times Square in New York City.
Asia has been pushing for a bigger voice in the IMF as its contribution to the global economy has grown substantially.
“A new brand of leadership will send a positive signal that the IMF is indeed responsive to the challenging world,” Purisima stressed.
A country’s IMF quota, or shareholding, determines the extent of its voting power in the 184-member organization.
The IMF had drawn criticism mostly from Asian countries for its handling of the 1997 Asian financial crisis. The multilateral lender allegedly had imposed harsh conditions on Asian economies that had sought its help.
Major decisions require an 85 percent vote. Advanced economies represent a quota of 58.2 percent while emerging markets and developing countries hold the remaining 41.8 percent.
The US has a quota of 17 percent while the 27 member states of the European Union have a combined quota of over 30 percent. Asia has a quota of 17.7 percent.
The Philippines, represented by Bangko Sentral ng Pilipinas Gov. Amando Tetangco Jr., has a quota of 0.38 percent.
Based on its latest World Economic Outlook, the IMF sees world economic growth slowing down to 4.4 percent this year from 5.0 percent last year.
The report said advanced economies led by the US would expand at a slower pace of 2.4 percent this year from 3.0 percent last year, while emerging and developing economies would expand by 6.5 percent from 7.3 percent.
Economic growth in Asia would likewise slow down to 8.4 percent this year from 10.5 percent last year.