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Mexico central bank governor Agustin Carstens feels the time is right for emerging markets (EMs) to fight for the International Monetary Fund's top job.
The nominations for the IMF chief post closes today, with French Finance Minister Christine Lagarde leading the race even as consensus remains elusive amongst emerging nations on support for a particular candidate.
Carstens is in India today to drum up support for his IMF chief bid. Speaking to CNBC-TV18's Karan Thapar, Carstens termed the discussions with Indian finance minister Pranab Mukherjee as "constructive".
"I share Mukherjee's opinion that IMF managing director should be selected on merit," he said adding, "He [Pranab] wanted to hear about my vision for IMF and role of emerging markets."
Carstens said EMs need to have much higher representation in IMF. “We need to increase EM representation in IMF to 60%,” he said adding, “What worries me is that EMs may get disengaged with IMF.”
Commenting on his opposition, Carstens said, Christine Lagarde is good at diplomacy, but added, her skill set is different. "I deserve the job of IMF top boss on the basis of merits," he said.
Below is a verbatim transcript of their discussion. Don't miss the accompanying video.
Q: Mr. Carsten, you are the Governor of the Bank of Mexico. Before that you have been the Finance Minister of your country and before that you were Deputy Managing Director of the IMF. Why do you want to go back to the fund? Most people would think that's like taking a step backwards in life.
A: I think that the Fund is a great institution. At the end of the day, the Fund plays a catalytic role in international financial markets and has an impact in the global economy and that is very attractive for any economist. I also think that it's the right moment in time for emerging markets to have the position of Managing Director at the Fund.
It's a tradition of 65 years that has kept the managing director position in the hands of an European. I think that emerging markets have shown that we can be trusted partners in international financial community that we can contribute a lot to rebate and I think it is important for emerging market economists to fight for this position.
Q: You come to India to ask for support for your candidature from the Indian Government. Two weeks ago, the Indian Prime Minister publicly said that India would support the best candidate regardless of his or her nationality. What do you believe are your credentials for which you should be given this job?
A: I would pack them in 3 sections. One, I have a good academic credentials. Two, I have a very strong record in policy making. I have 30 years of public service. I have seen pretty much everything that can be seen in economic policy making given the role that my country has shown.
As you said, I have been the Minister of Finance. I have been the Managing Director of the Fund; being responsible by taking relationship of Fund with 70 countries. Currently, I am the Governor of the Central Bank and the third issue is that I know the Fund from 360 degrees. I know the Fund as an Executive Director as I was there representing Mexico and other countries. I know it from a point of as an authority and I know it from a point of view of a staff and management member.
Q: Now, the interesting thing is you began the answer by saying that you were trained as an economist. Your principal contender, Christine Lagarde, the French finance minister is not an economist. Do you think that makes you better suited than she is for this job?
A: I think so. The issues on from day to day basis are economic in nature. Hence, the managing director should be able to provide leadership from sustainable point of view. And, only if you have long experience with those problems you can provide that leadership.
Q: But, providing leadership which is more important having run a major finance ministry, which Christine Lagarde has done having presided over the crisis that Europe has gone through or does leadership come from your academic qualification as an economic?
A: It comes from 30 years of policy experience. She has four years’ experience, that’s important comparison. I was a minister for finance three years, have been in policy making many more years. She doesn’t have any experience on financial matters, issues on being a regulator or managing an exchange rate crisis, on managing debt crisis. It’s a very important difference, the amount of experience and knowledge of the accumulator in those years.
Q: It’s very interestingly suit to your answer, you are saying two things at the same time. You are saying you are the best man for the job, but you are also saying much more subtly that she is the wrong woman for the job. She doesn’t have the experience; she doesn’t have the academic qualification?
A: She has other sets of attributes that I do not have. She probably is good at diplomacy. She is very strong at gathering consensus, organizing jobs, discussions. So she has a different set of skills than mine. Personally, the membership of the fund should go more with my profile, but the membership of the fund can also go with her profile.
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