Seeking to create history, Agustin Carstens, the Governor of the Central Bank of Mexico, reached India on Thursday to intensify lobbying for the top post of the International Monetary Fund (IMF) managing director, calling for an end to the European dominance in the world financial institution.
Talking to The Hindu soon after his arrival in the capital and a meeting with Prime Minister Manmohan Singh, Dr. Carstens, who has thrown his hat in the ring for the IMF position, said: “The 65-year-old tradition of European dominance should end now and solutions should come from the emerging and developing economies rather than the developed world,” he remarked.
He said basically, it was a tradition upheld for 65 years. There might have been some reasons for doing this but now the world was a completely different place. However, it does not mean that if Europeans had a good candidate, the IMF top post should not go to them. But what should change was the fact that Europeans considered the position at IMF as an acquired right and it should not be so.
Another reason, he said was that the IMF was at risk of losing its legitimacy because the fund needs to be a political institution. Otherwise it would not succeed in what it is meant to do — provide policy recommendations and financial support to countries.
Asked if he got any assurance of support from Dr. Singh during his interaction on Friday morning, Dr. Carstens said the Prime Minister was very positive as he [Dr. Singh] was a true believer in merit-based process. “India is going to watch the process over the next two weeks as today [Friday] is the last date for filing candidacy. Now the process of election will evolve. The Prime Minister said India wants to see the complete list of candidates, analyse them and make up its mind,” he remarked.
“I have the merit”
On India's intention to go along with Brazil, Russia, India, China and South Africa (BRICS) bloc in voting for the IMF post, Dr. Carstens said that even the emerging markets and economies had pitched for a merit-based process. “So consistent with that, what should happen is to compare the experience and compare the candidature and come to a conclusion. I have the merit and authority. I know the IMF from all different points of view. I have the experience of being the Finance Minister of my country and now the Governor of the Central Bank. I certainly hope that BRICS nations look into this matter and also look into the significance of an emerging market like Mexico. Keeping all this in mind, I think I make a strong case,” he said.
Asked what has been the highlight of his campaign for seeking the change of guard in the IMF, Dr. Carstens said: “I have been in South America, Canada and now in India. Basically what I have been highlighting is what I could do for the fund. Not only I have strong credentials but also know what would be my mission if elected. I think a very important aspect is to continue reforms in the IMF. The objective is to have full representation of the Latin American and developing and emerging economies in the running of the IMF.”
He said it was important for emerging and developing economies, which contributed more than half of the world's GDP, to get enhanced recognition and representation at the IMF.
“Lagging behind”
The fund was lagging behind in terms of lending powers and crisis management. It should work more in areas of financial reforms to prevent another financial sector collapse, he said.
