Mexico’s Agustin Carstens has a PhD from one of the world’s most respected economics programs, is a former finance minister and currently runs a central bank.
But perhaps the aspect of Mr. Carstens’ background that has best prepared him for a run at the top job at the International Monetary Fund is his admiration for the Chicago Cubs, the star-crossed professional baseball team that last won a championship in 1908.
That’s because like his Cubs, Mr. Carstens is both a sentimental favourite and a heavy underdog.
Standing side by side in Mexico City on Monday, Mexican Finance Minister Ernesto Cordero said he was certain that Mr. Carstens’ candidacy would get serious consideration, while the central banker expressed confidence that he was well suited to run the IMF, an institution at which he has already served at senior levels.
“Everything that is needed for the post, he has,” said Moises Naim, a senior associate at the Carnegie Endowment for International Peace in Washington and former Venezuelan trade minister. “He knows the IMF, he knows the players, he has the training, he has the experience and he is respected.”
Yet everything that’s needed might not be enough to put Mr. Carstens in the job left vacant by Dominique Strauss-Kahn, who resigned last week to concentrate on his defence against state charges that he attempted to rape a hotel maid.
European countries, who have selected the managing director since the IMF’s inception in 1946, are moving aggressively to maintain tradition by coalescing around Christine Lagarde, France’s internationally popular Finance Minister.
Dutch Finance Minister Jan Kees de Jager added to the cascade of support for Ms. Lagarde on Monday, telling Dutch’s national broadcaster that his French counterpart is “outstandingly suitable” to run the IMF, according to the Associated Press.
Mexico nominated Carstens on Monday as the first challenger for the post traditionally held by a European after former IMF chief Dominique Strauss-Kahn resigned to face charges he tried to rape a hotel maid.
Europe has monopolized the post since the IMF's inception at the end of World War Two. But the importance of emerging markets in the global economic recovery has helped these countries challenge the six-decade "gentleman's agreement."
"The challenge for emerging market countries is to achieve unity around a single man who can take the battle to the Europeans," Carstens told local radio. "It's worth fighting for."
Carstens, who was a deputy managing director at the IMF for three years before becoming Mexico's finance minister in 2006, said he felt qualified for the position.
Carstens, who has a doctorate in economics from the University of Chicago and is a Chicago Cubs fan, led Mexico’s response to the global financial crisis as finance minister.
In 2009, Mexico was the first nation to request a flexible credit line from the IMF, a mechanism to help support economies seeking strong macroeconomic policies.
Mexico leads a group of eight countries with 117,045 votes, or 4.66 percent of the total IMF ballot base, according to the multilateral lender’s website. The group is the seventh largest, measured by voting power, behind the U.S., Japan, Germany, France, the U.K. and 10 nations led by Belgium.
As chief economist for Mexico’s central bank from 1994 to 1999, he co-wrote a paper in which he pushed for market participants to have broader access to central bank data. The bank this year began publishing the minutes of policy meetings for the first time.
Flexible Credit
The IMF renewed and boosted Mexico’s flexible credit line to $72 billion in January, replacing a $48 billion facility. Mexico first sought the line in 2009 to bolster confidence in the economy, which contracted the most since 1995 that year.
Colombia and Poland were the only other two nations to enter similar agreements with the IMF, which the lender said were reserved for nations with strong economic policies.
The economy grew 5.5 percent last year, the fastest pace in 10 years, and may expand as much as 5 percent this year, Carstens said May 11.
Policy makers boosted their forecast for growth this year without changing their forecast for inflation of 3 percent to 4 percent. Annual inflation slowed to 3.36 in April, near the five-year low set in March and half that of Brazil. The central bank has a target of 3 percent inflation.
Mexico has been buying as much as $600 million in dollars monthly through dollar options since March 2010, boosting foreign reserves rose to a record $125.8 billion this year, according to the central bank.
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