Ex-Singapore finance chief Tharman Shanmugaratnam shortlisted for IMF top job, but will Europeans hand over the title?

Tharman Shanmugaratnam has reportedly been shortlisted for the IMF job, but it won’t be easy to get.
Lianhe Zaobao

Singapore’s ex-finance tsar Tharman Shanmugaratnam may be eminently qualified to succeed Christine Lagarde as head of the International Monetary Fund (IMF), but few among his admirers believe the global body will break from tradition with a non-European chief.

The IMF succession race was triggered last week when Lagarde was nominated to succeed Mario Draghi as European Central Bank chief.

If confirmed, Lagarde – IMF chief since 2011 – will start the new job at the end of October, meaning her current employer would need to find a replacement before that.

Since its inception in 1945, all 11 IMF chiefs have been of European descent – part of a so-called duopoly whereby the IMF is led by a European and the World Bank by an American.

But in what could be a sign the world body may be open to change, 62-year-old Tharman has been shortlisted for the IMF job, according to several media outlets.

A stalwart in Singapore Prime Minister Lee Hsien Loong’s cabinet, Tharman held concurrently from 2011 to 2015 the chairmanship of the IMF’s key policy steering group, the International Monetary and Financial Committee. He was the first Asian to hold that position.

At home, the central bank chief turned politician rose through the ranks quickly after entering government in 2001 to become the country’s number three leader.

He was finance minister from 2007 to 2015, and held office as one of Lee’s two deputies from 2015 until May this year.

At one point, the trained economist, well liked by the public because of a rare ability to discuss complex economic issues in simple terms, was viewed as the best candidate to succeed Prime Minister Lee.

Tharman later said he was not interested in the job. Lee and others in the establishment have repeatedly said the Chinese majority city state was not yet ready for a minority leader.

For long-time observers of Tharman’s career, his nationality – not qualifications – is likely to be the main hindrance to landing the IMF job.

Other non-European figures viewed as being in the running for the IMF job include Raghuram Rajan, India’s former central bank chief; Agustín Carstens, a Mexican economist and former deputy managing director of the monetary fund; and Egyptian-American Mohamed El-Erian, the former chief executive of global investment firm PIMCO.

Song Seng Wun, a veteran Singapore-based economist, said it was “good enough” that Tharman had made the shortlist.

He doubted the Americans’ and Europeans’ willingness to relinquish their traditional leadership of the IMF and World Bank – despite rising calls for them to do so from emerging powers such as India and China.

Eugene Tan, a Singaporean political observer, said the IMF’s European power brokers were more likely to be change averse amid the economic uncertainty rising out of the US-China trade war.

“With US President [Donald] Trump’s designs on the World Bank and China’s growing political and economic influence on the developing world, the European thinking is possibly that it is not the best time to break new ground as to the IMF head,” said Tan, a law professor at the Singapore Management University.


Despite offering long odds for Tharman succeeding Largarde, political observers and economists including Tan and Song were almost unanimous in acknowledging that he has the pedigree for the job.

Pundits believe that with Tharman’s political career at home winding down, it may be an opportune time for him to take up the IMF position.

In May, Prime Minister Lee made Tharman senior minister, an advisory position in the cabinet usually held by grandees of the ruling People’s Action Party.

Lee is expected to hand over power to a new generation of leaders helmed by new deputy prime minister, Heng Swee Keat, soon after general elections expected to be called in the next 12 months.

“I do believe that Tharman has made it rather clear that he will not be playing a substantial role in Singapore’s [next generation] government. That would leave him more room to manoeuvre in pursuing other interests that might place Singapore further on the world stage,” said Felix Tan, associate lecturer at the Singapore Institute of Management Global Education.

Siwage Dharma Negara, from the ISEAS-Yusof Ishak Institute in Singapore, suggested Tharman’s heritage could be a strength rather than a hindrance, especially in bridging ties between the IMF and Asian countries like Indonesia – where structural reforms the monetary body called in exchange for aid during the Asian financial crisis of the 1990s were seen as haughty.

“Tharman can help bridge the interests of the Western side and emerging markets and Asean in particular, thus mitigating any misunderstanding about the institution,” Siwage said.

For Vishnu Varathan, an economist at Mizuho Bank in Singapore, it is that geopolitical “dexterity” – of understanding China and the West – that makes Tharman the pre-eminent candidate for the next IMF chief.

“His expert knowledge and dexterity, render him as a rare breed of deep thinkers on socio-economic and political issues with sharp market acumen and risk perceptions,” said Vishnu.

“One hopes that this is not a continental sacred cow that the IMF shies away from slaughtering. Nationality is the worst possible reason to pass up on world class nomination.”