Egyptian-American economist El-Erian nominated to succeed Lagarde at IMF

Egyptian-American economist Mohamed El-Erian is nominated to succeed Christine Lagarde as the managing director of the International Monetary Fund (IMF).

European leaders nominated Lagarde last week to succeed Mario Draghi as president of the European Central Bank (ECB), raising the question of who would in turn replace her at the IMF.

According to multiple reports on Monday, El-Erian, former CEO of investment giant PIMCO and currently Allianz’s chief economic adviser, is on the list of four leading candidates under consideration to replace Lagarde.

“Lagarde is an inspired and unusual choice to lead the European Central Bank.” El-Erian said in an OP-ED published in Bloomberg Opinion on June 3.

El-Erian described last week Lagarde’s nomination as an inspiring choice to head up the ECB.

He, one of the world’s most widely followed economists, is credited with identifying and coining the concept of the “New Normal” to describe the likely economic performance of advanced economies after the 2008 global financial crisis.  He has been named four years in a row to Foreign Policy’s list of “The Top 100 Global Thinkers.”

In May, El-Erian was named as the new president of Queens’ College, a constituent college of the University of Cambridge, England. He is expected to succeed Lord John Leonard Eatwell in October 2020, according to Queens’ College.

He previously won a scholarship to study economics at Queens’ in 1977 and graduated with first class honors.

A fixture on major news outlets, including Reuters, CNBC, Bloomberg, and the Financial Times, El-Erian is an academic at heart.

He attended Cambridge for his undergraduate degree, then earned his masters and PhD in economics from Oxford. He has served on the boards of several schools, universities and think tanks.

Potential Candidates

According to the New York Times, the list of candidates to lead the IMF includes Tharman Shanmugaratnam, a senior minister and chairman the Monetary Authority of Singapore (MAS). It also included IMF deputy managing director Agustín Carstens, who is Mexican, as well as Outgoing Bank of England governor Mark Carney.

Meanwhile, Agence France-Presse mentioned Europeans such as Bank of France chief François Villeroy de Galhau, French politician Pierre Moscovici, and World Bank’s chief operating officer Kristalina Georgieva, from Bulgaria, as “early candidates mentioned as possible successors”.

IMF, Inception, and Role  

The International Monetary Fund was established in the wake of the second world war with the aim to help global economic recovery. It has now 189 member countries and a mandate “to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world”.

IMF is best known for providing loans to countries in crisis but under drastic economic reforms known as structural adjustment programmes, demanding borrowing countries to implement certain policies on the assumption that they will make them more competitive and encourage economic growth.

The conditionality clauses attached to these loans have been under criticism because of their effects on the social sector.