IMF’s new deputy joins virus fight fresh from Trump’s trade war

The International Monetary Fund’s new top deputy officially joined the global policy response to the pandemic Thursday as board members approved the veteran of President Donald Trump’s trade negotiations with China.

Geoffrey Okamoto, 35, the U.S. Treasury Department’s acting assistant secretary for international finance and development, was ratified by the IMF board as first deputy managing director. He succeeds David Lipton, 66, who left last month as the longest-serving top deputy, and will oversee lending programs, strategy and policy development as the fund faces the gravest challenge since it was established at the close of World War II.

“The primary objective is doing whatever we have to do to stabilize, and then set the stage for a rebound back to normalcy,” Okamoto said in an interview before his approval was announced, adding that he’ll draw on skills sharpened during negotiations between the two largest economies as policy makers confront a slowdown that many say is the start of a global recession.

He said that the world needs new policy responses to deal with the unprecedented buckling of economies. While he wouldn’t estimate how much fiscal stimulus will be needed, the response to the 2008-09 financial crisis could serve as a guide. Governments fighting the effects of the pandemic have so far pledged almost $2 trillion to shore up financial markets and businesses.

‘Large Locomotive’

“Unless it has been in the case of a failed state, usually we don’t see entire economies shutting down and then trying to wholesale restart,” Okamoto said. “As you’re seeing in various parts of the world, that’s not an easy process to get the economy of a country, or the global economy, moving again. This thing is a very large locomotive and it’s going to take a lot of energy and right policy framework to get us back to anywhere near normal.”

Okamoto has already worked closely with IMF chief Kristalina Georgieva in her previous role as chief executive officer of the World Bank. Bringing on a new No. 2 official comes less than six months after Georgieva took the top job at the fund, succeeding Christine Lagarde after she was selected to lead the European Central Bank. By tradition, the first deputy managing director is nominated by the U.S. and appointed by the IMF managing director.

Georgieva said Monday the fund is ready to mobilize its $1 trillion lending capacity to help nations counter the outbreak, calling for global coordination on monetary, fiscal and regulatory support. At least 20 countries have expressed interested in support, inclining Iran’s request for approximately $5 billion in financial aid.

Okamoto acknowledges he isn’t a Ph.D. economist like his four immediate predecessors, saying he plans to take in the input of fund officials with decades of policy experience and more finely honed technical skills.

“I obviously have different technical expertise than people who have occupied this job previously,” said Okamoto, who holds a master’s in public policy from Georgetown University in Washington. At Treasury, he oversaw global markets, coordination with the Group of 7 and Group of 20, and U.S. participation in international financial institutions.

He said his work at Treasury taught him to forge agreements on “really tough policy issues and tough negotiations on everything from trade agreements with China, to trying to get global consensus on how to resource the IMF for the next few years,” Okamoto said. “That’s going to require an incredible amount of coordination and a heavy amount of diplomatic tact to pull off well.”