With debate raging worldwide over an appropriate successor to the disgraced Dominique Strauss-Kahn as head of the International Monetary Fund, Asia Society Global Council Co-Chair Simon Tay weighs in with a new opinion piece questioning the IMF's relevance to Asia in the second decade of the 21st century.
In a piece co-written with Hank Lim, Tay notes, "The IMF's nearly 70-year-old practice of appointing only a European is being questioned, with some suggesting it is time for an emerging economy, and perhaps Asia, to take the place .... The fact is that in the new global economy, Asians and others now play a much larger role. This has been recognized with the creation of a G-20, for dialogue to foster cooperation among the largest economies. But reform in the IMF itself has been slower.
"Currently, the four largest Asian economies add up to only 13.8 per cent of the vote, including Japan with some 6.28 per cent. The promise is that from October next year, Asia will total some 20 per cent. But the share of votes and, even more, the attitude of Europeans lead to doubts the IMF can sufficiently evolve to reflect the dynamic realities of global rebalancing...
"If the IMF cannot change fast enough, Asians will need to look at the available alternatives. One possibility is to revisit the creation of an Asian Monetary Fund (AMF) .... If Asians and other emerging economies are insufficiently represented in the IMF, while Europeans continue to monopolize the institution even when the crises are in their own backyard, there is every reason for regional efforts to gather momentum."
Click here to read Tay's entire op-ed.
Asia Society Global Council Co-Chair Simon Tay is a former Asia Society Bernard Schwartz Fellow and currently chairs the Singapore Institute of International Affairs.