By THÉRÈSE MARGOLIS
Mexican President Andrés Manuel López Obrador (AMLO) got a double-whammy blow to his economic policies over the weekend when former Central Bank of Mexico (Banxico) Governor Agustín Carstens (a champion of what AMLO despairingly calls neoliberal economics) was presented the King of Spain Economics Award as “one of the most important and influential economic policy makers in the Ibero-American sphere over the course of the last three decades” on Friday, Nov. 18, and Gerardo Esquivel, AMLO’s candidate to head up the Inter-American Development Bank (IDB) — a key financial institution for the region and one of its most coveted positions — lost the post to Brazilian Ilan Goldfajn the following day.
On Sunday, Nov. 20, Goldfajn defeated Esquivel, who is currently serving as Banxico’s deputy governor, after receiving a political nudge from Argentine President Alberto Fernández (a fellow leftist who López Obrador had thought was firmly in his camp) when Buenos Aires’ own candidate, Argentine International Economic Relations Secretary Cecilia Todesca Bocco, dropped out of the competition.
And while Mexico complained about Goldfajn’s win, it wasn’t even a close race: Goldfajn got 80 percent of the votes, while Mexico got 8 percent.
The IDB, headquartered in Washington, is one of the key investors in Latin America and the Caribbean, responsible for $23.4 billion in financial commitments in 2021 and hundreds of infrastructure, health and tourism projects.
Goldfajn replaces Mauricio Claver-Carone, the first American to lead the IDB, who was ousted over ethics violations earlier this year.
As for Carstens, an economist clearly in AMLO’s verbal target practice sites who also served as the head of Mexico’s Finance and Public Credit Secretariat under the administration of former President Felipe Calderón, he is currently the general manager of the prestigious Bank for International Settlements (BIS).
At the international level, he was a member of the executive board of the International Monetary Fund (IMF), chairman of its Monetary and Financial Committee and deputy managing director of that institution.
In the different responsibilities he has held throughout his career, Carstens has gained international recognition for the soundness and depth of his analysis and for his ability to generate new ideas, as well as for his leadership and negotiating skills to implement policies that contribute to improving the use of public resources and the welfare of citizens.
He played a key role in the the macroeconomic stabilization following Mexico’s so-called tequila crisis and the modernization of the regulatory framework of the Mexican financial system, as well as in the reform of the tax and public sector pension systems and the autonomy regime of the Bank of Mexico.
On the global level, Carstens helped draft the development of the inflation-targeting scheme currently used by most central banks, and his analytical and operational contributions have helped in the proper functioning of flexible exchange rates.
He also introduced collective-action clauses in public-debt issues and helped to design a global financial safety net, with the promotion within the IMF of preventive credit lines for emerging markets with solid macroeconomic fundamentals or the use of market instruments for the management of catastrophic risks.
At the Bank for International Settlements, he has led the work of the central banking community on cryptocurrencies and on the effects of the possible issuance of digital currencies by central banks, as well as the impact of technological innovation on monetary issues and financial markets with the creation of the BIS Innovation Hub.