IMF chief contender supports bigger role for emerging markets, rebuffs mindset critique

08:16, June 14, 2011      

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Emerging markets should have a bigger voice in the International Monetary Fund (IMF) both in its management team and policy making process, Agustin Carstens, Mexican central bank governor, said in Washington on Monday.

Although the IMF is perhaps the most effective multi-national global institution, emerging markets should have a bigger role in it, Carstens said at an event hosted by the Washington-based Peterson Institute for International Economics.

The process of choosing a new IMF head at the helm should be " transparent, fair and independent of nationality," Carstens told a gathering of economists, policy makers and reporters.

The IMF has set a June 30 deadline to determine the new directorship, which has been held by a European since 1945.

The former IMF deputy managing director held that the 187- member agency is confronted with four-layer development challenges.

The IMF faces governance challenge, ability to perform appropriate surveillance, ability to effectively support crisis resolution and capacity to induce policy coordination at the global level, said the former Mexican finance minister.

The IMF's top position opened unexpectedly after its ex-chief Dominique Strauss-Kahn stepped down on May 18 after being charged with sexual assault on a hotel maid in New York.

The contest to become the IMF's next leader has heated up, as the Bank of Israel Governor Stanley Fischer has announced he will join the competition to head the Fund, posing a challenge to front- runner French finance minister Christine Lagarde.

Carstens announced last month to join the race for one of the international financial system's most sought-after positions and is endeavoring to garner support from different nations.

The economist who received his doctorate in economics from the University of Chicago noted that he has met with U.S. Treasury Secretary Timothy Geithner earlier in the day, saying that Geithner is "looking forward to an open process".

Secretary Geithner "thinks Governor Carstens has a strong mix of financial talent and political skills, making him an exceptionally capable candidate to head the IMF. Secretary Geithner is pleased that there is such a strong field of candidates for managing director at this critical time for the global economic and financial system," according to a U.S. Treasury statement on Monday.

The United Staters, the IMF's largest shareholder, has remained uncommitted and not endorsed a particular candidate up to date.

Carstens declined to comment on his strength compared with other contenders, but argued that the next IMF chief being a European would create "conflicts of interest" as European nations are borrowing heavily from the lending organization.

In response to questions from Xinhua, Carstens rebuffed the soundness of the critique that his economic education background from the University of Chicago famous for the "market first, regulation last" tradition might become a mindset barrier for him to head the global organization.

Carstens contended that he was "extremely proud" of being a student at the University of Chicago boasting renowned professors, adding that what a person's education background in university only provides ability for him or her to frame and analyze new economic problems.

It is unrealistic for someone to use what he or she has learned in the university for three years to solve all the problems he or she might face in the next three decades, said Carstens, adding that on top of the economic training from the university he also accumulated decades of rich policy-making expertise.

"I don't think it is fair to judge somebody" on which university he or she goes to, Carstens said.

"I have the academic credentials and policy making experience and experience in crisis resolution," he argued.

As emerging economies have become a much more important component of the world economy nowadays, the IMF chief selection should be open to a wider range of qualified talents around the world including from emerging economies, Michael Mussa, the former IMF chief economist and Carstens' thesis adviser in the University of Chicago, told Xinhua on the sidelines of the event.

Carstens' capability far exceeds Lagarde as he is a trained economist, and he is more experienced than Fischer as Fischer has not served as a nation's finance minister which is a key position, added Mussa, a senior fellow at the institute.

Source: Xinhua
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