President-Elect Names Imf Official Agustin Carstens to Head Economic Policy Team; Likely to Become Finance Secretary

SourceMex Economic News & Analysis on Mexico, October 25, 2006 | Go to article overview
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President-Elect Names Imf Official Agustin Carstens to Head Economic Policy Team; Likely to Become Finance Secretary

Augustin Carstens, who recently held the number-three post at the International Monetary Fund (IMF), has agreed to coordinate President-elect Felipe Calderon's economic-policy team. Carstens is now considered the most likely candidate to succeed Francisco Gil Diaz as head of the Secretaria de Hacienda y Credito Publico (SHCP). Calderon has said he plans to announce his Cabinet choices on the morning of his inauguration, Dec. 1.

Carstens' decision to join the Calderon team represents a change of heart for the economist. A few weeks ago, when asked about the possibility of returning to Mexico, he said he intended to keep his position at the IMF until 2008. "When I came here in 2003, my intention was to serve for five years," Carstens said after agreeing to accept the economic-policy position. "Because of this, I reluctantly leave my post, so I can devote my energies to the service of my country."

Analysts said the timing of Carstens' decision was important because the Calderon team wanted to have major input on the 2007 budget, which Congress is about to consider. "The new budget would have to incorporate the campaign promises made by Calderon, including fiscal reform and job creation," said Maricarmen Cortes, a columnist for the Mexico City daily newspaper El Economista.

In announcing the decision to bring Carstens to his economic team, Calderon emphasized that combating poverty would remain a high priority. "Even though macroeconomic stability and competitiveness are necessary conditions for an efficient economy, the marketplace by itself is not sufficient to create an economy that is truly human in nature," said the president-elect. "Dr. Carstens knows this very well, and that is why he is committed to working for the country and toward an international cooperation that will emphasize development."

Appointment receives mixed reaction

Carstens' appointment received a generally positive reaction from academics and economists, although some critics said the new economic-policy coordinator would continue the neoliberal policies that have expanded the gap between the rich and poor in Mexico during the past decade.

"Carstens' credentials are huge. He is an economist with ample experience, knowledge of the public sector, monetary policy, and the financial sector," said respected economic analyst Isaac Katz of the Instituto Tecnologico Autonomo de Mexico (ITAM). "He has a solid economic foundation, experience in the finance secretariat, and has strong credentials to promote reforms."

Similar comments came from others in the business sector. Victor Manuel Herrera, director of Standard & Poor's Mexico, noted that Carstens represents "continuity of macroeconomic stability" for Mexico.

Claudio X. Gonzalez, president of the Centro de Estudios Economicos del Sector Privado (CEESP), said Carstens is a "very competent economist with national and international experience and strong capacity for negotiation."

And Cuauhtemoc Martinez, president of the Camara Nacional de la Industria de Transformacion (CANACINTRA), said Carstens' contacts with important people overseas would benefit Mexico. "He is a person with experience, good ideas, and a wide perspective," said Martinez. "His relationship with the IMF could be used to benefit our country."

While Carstens was being showered with praise by the business sector, others expressed concern about his connections to the IMF and the neoliberal economic model that has been in Mexico for about two decades.

Julio Hernandez Lopez, a columnist for the Mexico City daily newspaper La Jornada, said the economic philosophy espoused by Carstens "guarantees another six years of an economy that created extreme wealth and extreme poverty." He said it is not surprising that the business community came out so strongly in support of Carstens. "Tell me who is cheering for you, and I will tell you who will be benefiting the most from your positions," said Hernandez.

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President-Elect Names Imf Official Agustin Carstens to Head Economic Policy Team; Likely to Become Finance Secretary


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