The search for a new International Monetary Fund Managing Director opens a real opportunity to enhance the legitimacy and effectiveness of this critically important international institution, and to recognize the coming of age of emerging markets in a world economy significantly altered after the post-World War II economic and political status-quo that gave birth to this institution.
Let's deal with legitimacy first. After the onset of the 2008 global economic crisis, G-20 nations stated that the heads of the international financial institutions should be appointed through an open, transparent and merit-based selection process, a position long-held by emerging economies. Unsurprisingly, in response to the abrupt resignation of Dominique Strauss-Khan, representatives of the BRICS in the IMF also stated that the practice of selecting the head of the IMF on the basis of nationality undermines the legitimacy of the Fund, underscoring that the most competent person, regardless of his or her nationality, should be selected. I could not agree more and am convinced that my government has put forward the best candidate for the job: Mexico's respected and capable Central Bank Governor, Agustín Carstens.
This is not only a matter of legitimacy, but of effectiveness. The Fund needs a leader who can gain the trust and cooperation not just of the major economies but also of emerging markets and low-income countries to adequately fulfill its mandate. This takes someone with real commitment to the Fund's mission. And the fact that the last three IMF chiefs did not even finish their first term in office, two of them voluntarily, was a disservice to the institution.
Moreover, if we learned anything from the recent global financial crisis it is that we cannot foretell the origin, depth and speed at which new crises will emerge and spread. Now is certainly not the time for learning on the job. The new Managing Director should be a top-flight economist with a deep understanding of and firsthand experience with the IMF and the management of complex financial crises.
Carstens fulfills the needs of the IMF and its management of the world economy at precisely this point in time. He has the technical wherewithal and over three decades of experience in economic policy-making, which includes serving as Minister of Finance before his current post at the helm of Mexico's Central Bank. Throughout his tenure as the IMF's Deputy Managing Director he was closely involved in economic troubleshooting beyond Mexico, where sound macroeconomic management has resulted in a strong and stable economy for over a decade. While a savvy political operator and effective manager, Carstens is first and foremost an experienced, internationally recognized economist who, as Managing Director, would have no agenda outside the IMF.
These critical attributes are undermined by the bandwagoning of European countries behind a European candidate without any consideration of other contenders.
Finally, let's address the new global order. Carstens' selection to this job would represent the recognition of a long-standing reality: that emerging markets have become hubs of economic dynamism, and some, like Mexico, role models of financial management. And the relevance of emerging markets will only increase in the near future. As someone who understands firsthand the needs of countries at different stages of development, Carstens can help build bridges between the dynamic emerging markets and developed nations. This is critical if the IMF is to remain as relevant and effective in the 21st Century as it needs to be. Sound and cold-headed analysis should leave no room for second thoughts when push comes to shove. It is time to show commitment to a strictly merit-based approach in the selection of the leadership of multilateral institutions.
Some seem to think that the right thing to do at this juncture is to keep behaving in a business as usual mode: to talk the talk about the need for reform, but maintain the top IMF position in the hands of a European to honor the unwritten agreement that has lasted for 65 years. It will take political courage and vision to once and for all begin adapting international institutions to the reality of the 21st century world economy. We are at a crossroads in which we have the right candidate at the right time. We must build the necessary consensus to jump-start this necessary transformation. Emerging markets have been clamoring for change in the selection criteria and processes at international financial institutions, and now they have what they wished for: the opportunity to coalesce around a transparent and merit-based selection mechanism, and an outstanding candidate that can truly represent them. This is an opportunity to do the right and smart thing. Let's walk the walk!
*The author is Mexico's Ambassador to the United States of America