Mr Chopra: A sober hand at helm

THIS weekend we may see the first outline of what Ireland’s most powerful man, Indo-Canadian Ajai Chopra, the IMF deputy director of the European Department, has in mind as he attempts to restructure an economy suffering from meltdown.

Despite his representation in the media as an aloof power broker, Mr Chopra’s previous record and own musings on his IMF blog site give some indication of what might be expected.

Chopra cut his teeth with the world’s most powerful financial organisation during the late 1990s IMF intervention in the collapse of the East Asia Tiger economies. He was the lead IMF operative in the restructuring of the South Korean economy. His resolute approach to dismantling the previously all-powerful “Chaebols” — Korean conglomerate multinational corporations — will send a chill down the spine of our own would-be conglomerate bosses.

This brought the IMF into conflict with well-connected economic dynasties such as Hyundai’s Chung family. The struggle ended with the halving of this conglomerates affiliates and the removal of the Chungs from controlling executive positions in the group.

In the wake of the twin towers attacks he also accepted that the South Korean economy would have to run at a deficit for a time in order to provide state-backed economic stimulus.

In a European context Chopra has already overseen restructuring of the Bulgarian economy and has maintained a watching brief over the continent’s “emerging economies”.

He is a student of previous banking collapses. Discussing the Swedish bank crisis of the early 1990s last August he has written that “a stabilised patient is not a cured patient.”

In an antithesis of the two Brians’ approach to dealing with economic crisis Mr Chopra said a balance has to be struck between time for diagnosis and development of necessary political backing on the one hand, and not allowing the problems to fester on the other.

In his most recent blog entry — perhaps after having his first close inspection of Ireland’s accounts and mindful of our former Finance Minister Charlie McCreevy — Mr Chopra wrote it is necessary during for a state to have “a policy of saving money when revenues are growing instead of increasing spending and boosting public wages”.

A failure by some governments to do this meant that when “revenue plummeted in 2009 and fiscal deficits increased sharply, many countries had no choice but to cut spending precisely when this was most painful.” Perhaps at last Ireland has an economically sober man at the helm.