Is the western hemisphere’s largest development bank heading for radical change?

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When the COVID-19 catastrophe finally subsides in Latin America and the Caribbean – and the region begins to rebuild its shattered economies – few institutions will play a more key role than the Inter-American Development Bank, or IDB. And that makes it all the more intriguing that so many countries in the Western Hemisphere are poised this weekend to approve one of the most sweeping changes in the IDB’s 61-year history – a change engineered by the administration. Trump.

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Since the creation of the IDB based in Washington DC in 1959, and because the bank carries out almost all of its activities in Latin America and the Caribbean, its president has always been from this region. But in June, the White House broke with that unwritten rule and appointed an American — President Trump’s top adviser for Latin America, Mauricio Claver-Carone, a conservative Cuban-American best known for his hard line against Cuba. communist – to become the new president of the IDB.

The bank’s board of directors votes on September 12 and 13 to replace outgoing chief Luis Alberto Moreno.

“One of the biggest complaints about the United States among Latin American countries is that we don’t care about the IDB,” said Claver-Carone, currently the National Security Council’s senior director for security affairs. Western Hemisphere, to WLRN from Washington. “But we want to make the IDB a financial heavyweight, first and foremost.”

Miami-born Claver-Carone appears to have enough IDB shareholder votes in his camp — including those of Brazil and Colombia, whose presidents are both strong Trump allies — to secure the election. More than 15 countries in the hemisphere have backed him – despite what is often seen as Trump’s anti-Latin American policies and rhetoric. But a dissident IDB cohort, including Mexico and Argentina and backed by several former Latin American presidents condemning the US move, may try to postpone the poll until after the US presidential election in November.

READ MORE: Has the tragic year of COVID in Latin America created another economic “lost decade”?

Claver-Carone calls it an “obstructionist” ploy. And he insists it would set back the IDB in its efforts to help Latin American and Caribbean economies rise from the ashes after suffering some of their worst falls in decades thanks to the coronavirus disruption. This is particularly important, he adds, because he believes there is already too big a gap between the needs of the region and what international financial institutions such as the IDB are providing.

“Latin America and the Caribbean has the largest financing gap in the world, especially for small businesses,” says Claver-Carone. “For so many years, China has filled this void. Now, Chinese lending to the region has declined significantly and we have an opportunity to step up or sit back and see who else fills this gap.

One of the biggest complaints about the United States in Latin America is that we don’t care about the IDB. But we want to make it a financial heavyweight.

Mauricio Claver-Carone

The IDB is the largest source of loans and grants to governments in Latin America and the Caribbean – $13 billion last year. But Claver-Carone argues that ditching the IDB’s presidential regime will give it new energy — and that it can make the bank more effectively governed, more solidly capitalized and, he says, more democratic. In its six-decade history, the bank has had just four presidents — Moreno, from Colombia, held the post for 15 years — and Claver-Carone has promised to serve just one five-year term. .

He also said he would make the IDB more inclusive for smaller member countries in the region.

“In 61 years – including vice presidencies, top leadership – there has never been anyone from the Caribbean, from Central America, from the small countries of South America,” he says. “It’s not inclusive.”

Mauricio has no viewing history – the most important thing for this position. He lives in a bubble.

Christopher Sabatini

Some IDB leadership positions have actually been held by people from these countries. But Claver-Carone’s campaign message has struck a chord with their governments — like Haiti’s, which backs his candidacy even though it’s one of the bank’s biggest beneficiaries. After the catastrophic earthquake ten years ago, the IDB pledged $2 billion to help build new homes, roads, schools and industrial parks.

“This relationship is very important,” says Gilbert Saint-Jean, a Haitian-American biologist and development expert in Miami who is part of an expatriate NGO group, led by the Ayiti Community Trust, which recently submitted its own grant proposal to the IDB to help rebuild Haiti’s crumbling tourism sector.

“Especially for a country like Haiti,” says Saint-Jean, “in terms of rebuilding, transforming a sustainable emerging economy – IDB support, yes, is one of the essentials.”

PROVIDE DEVELOPMENT

Guyana’s new government is another in the Caribbean that backs Claver-Carone’s candidacy. Skeptics suggest President Irfaan Ali is simply reimbursing the Trump administration for siding with him in this year’s disputed presidential election. (His predecessor, David Granger, eventually resigned last month.) But Foreign Secretary Robert Persaud said Guyana was confident Claver-Carone would give Caribbean countries a greater voice on issues critical to them, such as climate change mitigation.

“We are small economies, but we have big solutions to global problems,” Persaud told WLRN. “And we believe Mr. Claver-Carone’s leadership will strengthen the IDB’s ability to deliver development impact in countries like ours.

Current IDB President Luis Alberto Moreno (left) speaks with Haitian President Jovenel Moise in Haiti this year.

Claver-Carone’s critics also suggest that rather than resisting IDB sponsorship, what he has delivered so far has been promises of “vote buying” high-level positions at the IDB. to countries like Guyana, as well as larger nations like Brazil. He and government officials like Persaud deny the charge; Claver-Carone calls this “ridiculous”, although he points to young civil servants like Jamaican Finance Minister Nigel Clarke as a “new generation of talent in the region that we would like to recruit”. (Jamaica also endorsed Claver-Carone.)

Either way, it’s the big shareholder countries like Brazil that will carry the most weight in the IDB elections this weekend. At present, it is uncertain whether Claver-Carone will be elected or whether countries like Argentina – which has fielded its own candidate, Strategic Affairs Secretary Gustavo Beliz – will force the postponement. (Brazil and Argentina both hold 11% of IDB shareholder shares, second only to the United States)

This latest cohort explains that if Joe Biden defeats Trump in November, enthusiasm for Claver-Carone’s candidacy will diminish since his and Biden’s perspectives on continental politics will be too polarized to make the US-IDB relationship viable. Claver-Carone insists it will work ‘no matter what happens on Nov. 3’, but Biden’s campaign said last month that the former US vice president opposes Claver-Carone’s candidacy at the IDB.

THE CUBA OBSESSION

“Postponing the vote is the best solution,” says Christopher Sabatini, senior Latin America fellow at Chatham House, a London-based international affairs think tank and one of the most vocal critics of Claver-Carone’s candidacy. at the IDB.

Many Latin American experts like Sabatini question Claver-Carone’s international financial experience. In this area, Claver-Carone, a lawyer, has only served as the United States’ representative to the International Monetary Fund, or IMF, although under Trump he helped create agencies like the U.S. International Development Finance Corporation and programs like América Crece, or Growth in the Americas. .

They also insist that he is indifferent, even hostile, to the kind of environmental issues that concern the Caribbean. But Sabatini says the biggest concern is what he calls Claver-Carone’s extremist “obsession” with overthrowing Cuba’s communist regime.

COVIDCaracas.jpeg

A young Venezuelan girl helps push her family’s goods to a street market in Caracas this summer during the country’s coronavirus lockdown.

Cuba is not a member of the IDB. But Claver-Carone’s critics have long complained that he sees every issue through a narrow Cuban prism – and as a result, Sabatini fears he is politicizing the IDB and basing his lending decisions on loyalty to that agenda. particular.

“He’s pursued a very Manichean, us versus them policy throughout his career, not just in Cuba, but in any country that frequents Cuba,” Sabatini said. He warns that “as soon as anyone with leftist leanings in the Caribbean makes overtures to Cuba, they will have to pay” regarding a relationship with the IDB.

Sabatini also points to what he says is Claver-Carone’s reputation in Washington for ignoring other viewpoints.

“Mauricio has no listening history – which is the most important thing for this position,” says Sabatini. “He lives in a bubble.”

The Biden campaign also says it thinks Claver-Carone is “too ideological” and “underqualified” to run the bank.

Claver-Carone denies he would advance a political agenda as IDB president. “I will be the steward of the IDB’s agenda, not mine,” he says. He also insists that his temper will be an asset to the bank.

“You can be passionate about democracy and human rights, but also about economic growth and development,” he says.

Depending on what happens this weekend, the passions of Claver-Carone may well become the passions of the Inter-American Development Bank.

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