Candidate assessment: Marchenko is not of sufficient caliber to lead the IMF by Meruert Makhmutova

imfboss has invited candidate assessments from civil society voices in the home countries of the candidates to head the IMF. Throughout the process we will be posting these here for your benefit.

By Meruert Makhmutova, Director of Public Policy Research Center, Almaty, Kazakhstan

The Governor of the Central Bank of Kazakhstan was nominated by Kazakhstan’s Prime Minister to head the International Monetary Fund at CIS Government heads meeting in Minsk. As a result Marchenko was endorsed as the single candidate from the CIS countries.

The chances of Marchenko becoming the head of IMF are around 1 per cent given the global political realities. There would be no real chance at all if the selection process was actually merit based. The above mentioned 1 per cent would only be possible if Kazakhstan negotiated intensively with other developing countries and they are able to join forces in pushing on the United States and European countries. But it seems the process for the selection of the IMF head differs from the lobbying that goes on for the chairmanship of the OSCE.

The caliber and experience of Marchenko is not proper for leading the IMF and managing the huge international financial flows. Marchenko’s main achievements, as described by his backers, are his input in the creation of a developed and transparent financial sector in Kazakhstan and the reform of the pension system. But the last financial crisis shows that all the achievements of the financial sector were actually bubbles supported by massive foreign debt. The main current weaknesses of the Kazakh economy are the high levels of non-performing loans of banks.

The “accumulating pension” system was introduced in the economy despite limited investment opportunities and an underdeveloped stock market; thus so far the main investments of pension funds are in state securities. This means the investment returns don’t cover the inflation rate. There has not yet been a real test of the pension system, but obviously the decision was without an assessment of long term consequences.

In the previous  five years before his return to the central bank in 2009, Marchenko was head of Halyk Bank which belongs to the president’s daughter and son-in-law listed as Forbes billionaires. After returning as Governor of the central bank, Marchenko’s decisions to provide government support to a few banks, including Halyk Bank, and to devalue the Kazakh currency the next day by 22 per cent were too painful for the rest of the economy.

Marchenko’s interpersonal skills are also limited, with a haughty attitude towards other people.


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