Colombia’s finance chief, looking to become the International Monetary Fund’s top official in Latin America, boasted that his economy has overtaken Argentina’s as the region’s third-biggest as a result of the Argentine peso’s slide on the unregulated currency market.
Juan Carlos Echeverry, who last week announced he was stepping down from his post, also said in an interview that Colombia may change its representation on the IMF’s executive board, moving from a nine-nation constituency led by Brazil, the region’s biggest economy, to one headed by Mexico.
Colombia’s economy was $15 billion larger than Argentina’s, taking into account the IMF’s gross domestic product data and an exchange rate of 6.37 Argentine pesos per dollar, Echeverry said. In Argentina’s unregulated exchange market, in which investors buy assets locally in pesos and sell them abroad for dollars, the peso has slid 27 percent this year to 6.5247 per dollar. That compares with an official rate of 4.6355.
“With this exchange rate, I can make the announcement that I retire leaving the Colombian economy as the second biggest in South America, and the third largest in Latin America,” Echeverry said yesterday in the Caribbean coastal city of Barranquilla.
Echeverry yesterday said he is applying to become the IMF’s Western Hemisphere director in charge of monitoring the Latin American and Caribbean economies. Former Chilean Finance Minister Nicolas Eyzaguirre resigned from the Washington-based post in July.
The IMF has repeatedly criticized Argentine government statistics it says don’t accurately reflect inflation private economists put at 24 percent. In turn, President Cristina Fernandez de Kirchner has blamed the IMF for pushing the country into a financial crisis that led to a 2001 default on $95 billion of bonds. Argentina hasn’t allowed the IMF to review its finances as required by all IMF members since 2006.
Echeverry, 49, didn’t say why Colombia is considering abandoning the Brazil-led constituency on the IMF’s 24-member executive board in favor of Mexico.
Still, under Echeverry’s leadership President Juan Manuel Santos’ government has increased ties with Mexico. The two countries came together to create the Pacific Alliance of the region’s most-open economies, distancing themselves from the Brazil and Argentina-led Mercosur trade pact, which has been raising import restrictions amid the global economic slowdown. Colombia followed Mexico, Peru and Chile — all members of the fledgling trade group — and implemented a free trade agreement with the U.S. earlier this year.
“We have been exploring different possibilities, and that’s still ongoing,” said Echeverry, a New York University- trained economist who once worked as a teaching assistant to Federal Reserve Chairman Ben S. Bernanke. “To us, the constituency with Mexico, Spain, Venezuela and the Central American countries seems very attractive.”
Echeverry described the conversations over a possible move as “normal,” adding that it would happen in November, when the next board election takes place. Other nations, including Turkey and Austria, are also seeking to change seats as part of a 2010 agreement to give emerging markets a bigger say at the IMF.