On 1 October, the International Monetary Fund (IMF), the international body responsible for ensuring the financial stability of developing countries by extending them large sums of money with the condition of imposing certain policies, announced the appointment of a new chief economist.
The Indian-born Gita Gopinath, currently a tenured economics professor at Harvard, has been appointed to succeed Maurice Obstfeld at the end of 2018.
As an expert on trade, exchange rates, monetary policy and public debt, Gopinath is tasked with adapting the IMF’s role in a world beset by an emerging market crisis and disillusioned with globalisation. Here are five things you should know about her:-
She follows in the footsteps of a former RBI governor
Gopinath is the second Indian to be appointed to the role of chief economist after Raghuram Rajan, who was the governor of the Reserve Bank of India from 2013 to 2016. Rajan was named the IMF’s chief economist in 2003 before leaving the organisation in 2006 to join India’s finance ministry as its chief economic advisor. Gopinath’s recent appointment has led to speculation that she could one day be considered for the top job at India’s central bank.
She is the first woman to head the IMF’s research department
In addition to being the IMF’s Economic Counsellor, Gopinath will be director of the body’s research department – becoming the first woman to do so. The department is crucial to the IMF’s functioning as it monitors the global economy and policies of member countries and is also tasked with publishing the World Economic Outlook every year.
She was a critic of the Modi government’s demonetisation initiative
Like Rajan, who said demonetisation “was not a well-thought out exercise”, Gopinath was also vocal in her criticism of the move. In an interview with Business Standard in December 2017, she went on record to say that demonetisation wasn’t a good idea and the government should have spent more time refining its plans to implement the goods-and-services tax (GST) regime, a reform that she supported. She added that she didn’t know any macroeconomists who thought the note ban was useful.
India’s balance of payments crisis in 1991 shaped her academic interests
Before moving to America for her Masters and PhD in economics, Gopinath pursued her undergraduate and graduate degrees in economics from Lady Shri Ram College and the Delhi School of Economics. Her time at Delhi University coincided with India’s balance of payments crisis in 1990-91 and this inspired her to pursue her interest in international finance. The crisis, which stemmed from a ballooning of imports in the mid-80s, saw India battle the problem of a fiscal deficit as well as a trade deficit. Faced with a shortfall in its foreign exchange reserves, the government received an emergency loan from the IMF to cover its spending obligations, pledging its gold reserves as collateral. The move led to the liberalisation of the Indian economy.
She is the economic advisor to the chief minister of Kerala
Since 2015, Gopinath has been advising Kerala’s CM, Pinarayi Vijayan, on economic affairs, having reportedly made recommendations on skill development and healthcare. Till date, this is the only role she has taken one that has required her to directly advise a central or state government. Her appointment, however, was the subject of controversy given that her free-market beliefs were in opposition to the ideals of Kerala’s left-wing parties. For example, in January this year, she flagged the state’s growing welfare expenditure as a potential budgetary concern.