【2011.5.31 金融时报】Emerging economies are ready to lead

rhapsody

http://www.ft.com/cms/s/0/5355a4 ... 5-00144feab49a.html

By Agustín Carstens
Published: May 31 2011 23:12 | Last updated: May 31 2011 23:12

Less than three years ago, when the financial crisis exploded, the world economy slid to the edge of the abyss. The slide was arrested by an unprecedented global rescue, in which the International Monetary Fund played a vital role. We have now stepped back from the precipice but, should the world require another rescue, we must not forget that global collaboration requires trust among partners, with legitimate institutions at its core.

In recent years the IMF’s board has embarked on reforms to give a greater voice to emerging markets. With the world economy undergoing major shifts in relative wealth and financial flows, continued reform has become urgent. Countries as varied as Indonesia and South Africa, the Brics – Brazil, Russia, India and China – and my own country, Mexico, have proved to be reliable partners and they deserve to be treated as such. They have every right to expect that the selection process for the IMF’s next managing director will be transparent and based on merit, rather than a backroom deal among a clique of advanced economies to select, inevitably, by a vintage second world war agreement, a European.

Emerging markets have vast experience in policymaking that can benefit the global community. It was neither surprising nor an accident that most recovered from the crisis quickly and are now booming. This reflects their good economic policy, increasingly robust institutions and accumulated experience from managing previous crises. But to bring this experience to bear, emerging market countries must now embrace their new, more vital role and fully share responsibility for promoting broad-based prosperity in the new global economy.

If advanced economies refuse to accept change, and if emerging market countries turn away, the world risks sliding back towards that abyss. In our interconnected world, purely regional arrangements may support, but can never replace, a functioning IMF framework.

An effective IMF is an independent taskmaster. When it extends loans it does so on specific, negotiated terms, including corrective policies on the part of the borrower. It is, therefore, imperative that it be shielded from regional and national influence and not be captured by particular interests. Only an objective and apolitical IMF will retain its credibility to serve the international community as the platform of economic co-operation.

European countries should not overestimate the role of the IMF in solving their current sovereign debt crises. With its analytical firepower, the IMF can provide objective diagnosis, workable solutions and, when approved by its executive board, financial support. But from my own experiences in Mexico, as well as what I observed while serving on the IMF’s executive board and later as a deputy managing director, for each country the tough decisions are political and they need to be taken domestically. The IMF cannot make these political decisions for Europe, whether its managing director is European or not.

What the IMF can do is provide the capacity and credibility to avert crises and resolve them when they do occur. But for this it needs a legitimate governing structure that is also required to tackle the long-standing problem of global imbalances, deal with destabilising capital flows, follow through on financial sector reform and protect the poor from the effects of rising commodity prices. Only such a legitimate governance framework can form the basis to create jobs for the world’s growing population and guarantee that growth is inclusive and to the benefit of all.

For this reason it is crucial that the IMF’s next managing director be selected transparently and on the basis of ability and experience. The IMF’s 187 members all deserve a candidate who can lead the IMF as what it was originally intended to be: a fully global institution that addresses economic imbalances well before they send any country, or all of them, into another abyss.

The writer is governor of the Banco de México and a candidate to be the IMF’s next managing director

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