When Mexico became a trailblazer by being the first emerging market sovereign to put a collective action clause (CAC) into a $1bn sovereign issue – which was intended to simplify life for investors in case of a default, following their disastrous experience with Argentina – Agustín Carstens was at the forefront. These days, CACs are a feature of virtually every sovereign bond issue, and their inclusion is barely a matter for comment.
In 2003, Mr Carstens became deputy managing director of the IMF. Now bets are on that he will be given the top post at Mexico’s finance ministry when the conservative administration of Felipe Calderón takes control on December 1. Calderón already named him head of his economic transition team in October – a possible prelude. Not that Mr Carstens admits that he will take the job. “The best finance ministers have been tall and thin,” he quipped recently, in reference to his own portly physique.
But, following July’s contested election, Mr Carstens’ skill in building fences will be needed more than ever if the government wants to push through the host of reform measures that will be needed to keep Mexico’s growth on track.