The race to be the next top development banker in Latin America
Wchicken inside 2020 Donald Trump’s administration engineered the election of Mauricio Claver-Carone, an official at the National Security Council.NSC), as president of the Inter-American Development Bank (IDB) broke the gentlemen’s agreement dating back to the founding of the bank in 1959. This stipulated that the main work should go to Latin America while the United States, the largest shares with 30% of the capital, at the number two slot and informal suspension. Mr Claver-Carone vowed to shake up what he said was a fossil plant. But his role always looked like a disaster waiting to happen, especially after Joe Biden won the White House. So he confirmed.
Born and raised in Florida, he had little knowledge of Latin America. At the NSC he had pushed again for the United States to invade Venezuela to topple the dictatorship of Nicolás Maduro, against cooler heads at the Pentagon. At the IDB he alienated the largest shareholders in Latin America by appointing unknown people from small countries to the top jobs. He emphasized helping the private sector and trying to contain China. He often felt like a simplistic cheerleader for the United States.
He was the agent of his own decline: the IDBExecutive directors voted unanimously to fire him in September, after an investigation found he had breached the bank’s code of ethics by having an affair with his boss , whose salary was increased. (He denied the case; investigators said he did not cooperate with them.)
He won the post partly because the government of Jair Bolsonaro in Brazil was an ally of Mr Trump, but also because Latin American governments failed to unite behind a credible alternative. With an early opportunity to make amends, this time the district has fielded several well-qualified candidates before nominations close on November 11. Whoever wins will have two big tasks. The first is to raise the bank’s staff, discouraged under Mr. Claver-Carone. The second is to obtain shareholder approval for a late increase in the bank’s capital, to allow it to extend its loan.
Many governments said they preferred a woman. The president of Mexico, Andrés Manuel López Obrador, praised Alicia Bárcena, who ran the UN Economic Commission for Latin America from 2008 to April. In that role she preferred the failed industrial policy of left-wing governments such as Rafael Correa in Ecuador, and she praised the dictatorships of Cuba and Venezuela. Her application stopped and on November 9 she withdrew. Instead, Mexico suggested Gerardo Esquivel, deputy governor of the Central Bank.
Laura Chinchilla, the former president of Costa Rica, is highly respected, except, it seems, by Rodrigo Chaves, the current occupant of that job, who refused to name her. Mr Bolsonaro’s government has proposed Ilan Goldfajn, the former head of Brazil’s Central Bank who is currently IMFand chief officer for Latin America. But Luiz Inácio Lula da Silva will take over on January 1 from Mr. Bolsonaro. According to a well-placed source, Lula’s people do not oppose Mr. Goldfajn. But it is not clear how hard they will lobby for it.
He might prefer Chile’s candidate, Nicolás Eyzaguirre, a former finance and education minister who held Mr Goldfajn’s job at the same time. IMF. He has the advantage of working for centre-left governments in his country in an area which is currently moving in that direction. Another possible candidate is Augusto de la Torre, former head of the Central Bank of Ecuador and a World Bank economist. Argentina wants to block the work. He could recommend Sergio Massa, who became the economy minister in August. A conservative Peronist, he has good connections in Washington. Against him it seems that Argentina is going to be a big contender for him IDB money He is not easily replaced in his current role. But Bello’s sources say he wants to run.
Mr. Claver-Carone was right that the IDB suffering from a degree of cronyism and feather bed. But it is still important for Latin America. Its annual borrowing of about $14bn is almost identical to a loan CAF, another development bank. But the IDB it can be quick and flexible in its lending, which is important as governments’ financial conditions tighten. And he has extensive experience in advising governments on projects and policies, such as tax and spending reforms. A calm, competent and politically astute leadership at one of the main centers of Latin America would help the region at a difficult time. This time there is a good chance to get it.
Read more from Bello, our Latin America columnist:
Lula’s foreign policy ambitions will be tempered by circumstances (November 3)
A film about Argentina’s history sheds light on its politics today (October 27th)
Sergio Massa is the only thing standing between Argentina and chaos (October 13th)