Mexico City — Arturo Herrera, a Mexican former finance minister, is returning to the international finance scene after a two-and-a-half-year break from his career at the World Bank to join President Andrés Manuel López Obrador’s cabinet in the first part of his six-year term.
Six months after a Twitter post to confirm that he had been ruled out as a candidate to become the next governor of the Bank of Mexico (Banxico), Herrera will return to the World Bank on July 1 as global director of governance, with a priority work agenda that he will execute from his new office in Washington, D.C.
“I was chosen through a competitive process for the global Governance directorate, in my appointment several announcements are made, one is the start date which is July 1 and another is the priorities,” Herrera tells Bloomberg Linea in an exclusive interview, after Banxico’s deputy governor, Gerardo Esquivel, announced the news on May 13 through a congratulatory message on his personal Twitter account.
The World Bank (WB) also confirmed Herrera’s new position to Bloomberg Línea.
Herrera will now have more than 180 countries under his responsibility and Mexico is just one of those, as he will be responsible for Latin America and the Caribbean.
Herrera told Bloomberg Línea that the WB’s governance issues, range from fiscal, budget, investment, procurement and public administration topics to judicial reform and judicial system issues.
He said that some of his priorities will be to strengthen the bank’s interaction for public institution projects in countries in conflict, such as Somalia, Burundi, Cameroon and Sudan, while also on the agenda are activities and projects in the financial field.
“I have to take charge of developing the issues in global governance covering public institutions and the public sector,” he said.
The Herrera-AMLO Relationship
Herrera returns to the WB as if he were returning home. The economist, a graduate of the Universidad Autónoma Metropolitana (UAM) and the Colegio de México, began his career at the international organization in September 2010, which he interrupted in August 2018 to join AMLO’s transition team following the left-wing president’s election win.
Herrera’s most recent position at the bank was governance manager for East Asia within the global governance practice, which he held from January 1 to August 31, 2018. Previously, in the same practice, he was in charge of governance management for Latin America and the Caribbean from 2014 to 2017.
From Washington he landed at the Mexico’s National Palace to become the right-hand man of former finance minister Carlos Urzúa as undersecretary, a post he held from December 1, 2018 to July 8, 2019. Urzúa resigned and Herrera was proposed by AMLO as the new head of the country’s finances.
He held the finance minister position for two years, maneuvering the country’s public finances in the midst of a 2019 marked by the cancelation of the new Mexico City airport (NAICM) and the implementation of an austerity policy, only to close his passage in government in 2020 with the onslaught of the Covid-19 pandemic.
On June 9, 2021, AMLO nominated Herrera as the next governor of the central bank (Banxico).
“He is an economist with a social dimension,” the president said at the time in praise of his former official, and who had emerged as a possible replacement of Alejandro Díaz de León at the head of the country’s central bank.
During the rest of the year, while Díaz de León concluded his term, Herrera held the role of president of the Board of Governors of the World Bank and the International Monetary Fund (IMF); in June he also met with the managing director of the IMF, Kristalina Georgieva, and the secretary of the U.S. Treasury, Janet Yellen, both of whom congratulated him on his nomination.
However, on November 24, the President announced that he had reversed his decision and that the then undersecretary of expenditures at the Finance Ministry, Victoria Rodríguez Ceja, would be his nominee to lead Banxico, and Herrera confirmed AMLO’s decision on his Twitter account.
“In relation to the information that has been released today, I would like to confirm that indeed the president informed me a week ago that he had decided to reconsider my appointment as head of the Bank of Mexico,” he wrote on November 23, 2021.
Turning Over a New Leaf
Six months have passed since that announcement. Rodríguez Ceja has been governor of Banxico since January 1, and has participated in three monetary policy meetings to date, with interest rate hikes of 50 basis points in each of the announcements.
Bloomberg Línea asked Herrera if he maintains a relationship with President López Obrador after the change of decision in the leadership of Banxico and how he qualifies it, but he has had no contact with the president during this time.
“I’ve only spoken about it once, in the tweet in which I communicated the fact that the president had reconsidered his decision. Since then I have not spoken to him [President Andrés Manuel López Obrador].”Arturo Herrera, Mexican former finance minister
Now focused on his new assignment, from the global area to which he will report, he will address macroeconomic and financial issues, closely following the pulse of the high inflation that the world is suffering.
From his perspective, there are three sources that are fueling inflation: an increase in aggregate demand in the United States, Russia’s invasion of Ukraine and the impact of that conflict on energy and fertilizers, in addition to a pandemic that has yet to abate and is still having an effect on trade and the level of economic activity.