Mexico’s central bank governor announced he was running to head the International Monetary Fund in late May. Four days later Mexico’s finance minister said he had aspirations to be the country’s next president.
In a single week Mexico’s two most important economic officials had set their sights on higher office. And the country took notice: News programs and columnists weighed in on their chances at beating opponents but also raised concerns that their distraction could threaten the nation’s economic stability. In the month that followed, central bank Governor Agustin Carstens spent much of his time on a whirlwind tour of nations with large voting shares in the IMF. He was in Japan on Friday.
Finance Minister Ernesto Cordero remained at his post in Mexico and said he would not be campaigning for now. But the Eurasia Group today predicted he will soon step down to focus on his candidacy. And his speeches have already taken on a different tone. Many have focused on sweeping statements about the current administration’s accomplishments or tried to clarify those statements after the press picked them apart and ridiculed them as if Cordero were already a presidential candidate. Elections are not until July 2012.
Neither aspiring leader has come any closer to reaching his goal - Carstens has admitted he is a long shot for the IMF post and Cordero is still not polling among the top five presidential contenders.
Even if they don't end up leaving their posts, their absence is already causing some concern.
“Two pillars of the country are busy with things completely different from their jobs,” says Rodolfo Navarrete, an economist at Mexico City-based brokerage Vector Casa de Bolsa. “It is very dangerous because it generates worry.”
Others doubt the outside interests of the two men will have much effect on the economy. Markets were largely unchanged on the days both Cordero and Carstens announced their plans, unlike when Israel’s central bank governor announced his IMF bid last week - causing the shekel to fall.
Mexico’s enviable economic position may have something to do with this stability. Inflation has been one of the lowest among large emerging
markets and the GDP has been growing faster than before the recession. This could give breathing room to the country’s top policy makers to
chase their dreams.
Other factors may include the fact that with upcoming elections there is little chance reforms will be passed, freeing up the finance minister.
Some uncertainty lies ahead, however. Fears of a US economic slowdown have impacted Mexico, weakening its peso and possibly affecting
short-term growth. Most recently, Greece’s debt default crisis has sent jitters across the globe.