When the COVID-19 disaster finally eases in Latin America and the Caribbean 鈥� and the region starts rebuilding its shattered economies 鈥� 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 set this weekend to approve one of the most radical alterations in the IDB鈥檚 61-year history 鈥� a change engineered by the Trump Administration.
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Since the Washington D.C.-based IDB was founded in 1959, and because the bank does almost all its business in Latin America and the Caribbean, its president has always been from that region. But in June the White House broke with this unwritten rule and nominated an American 鈥� President Trump鈥檚 top Latin America advisor, Mauricio Claver-Carone, a conservative Cuban-American best known for his hard line against communist Cuba 鈥� to become the IDB鈥檚 new president.
The bank's board votes September 12-13 to replace outgoing chief Luis Alberto Moreno.
鈥淥ne of the biggest complaints about the U.S. among Latin American countries is that we don鈥檛 care about the IDB,鈥� Claver-Carone, currently the National Security Council鈥檚 senior director for Western Hemisphere affairs, told SA国际传谋 from Washington. 鈥淏ut we want to make the IDB a financial heavyweight, first and foremost.鈥�
The Miami-born Claver-Carone looks to have enough IDB shareholder votes in his camp 鈥� including those of Brazil and Colombia, whose presidents are both strong Trump allies 鈥� to secure election. More than 15 countries in the hemisphere have endorsed him 鈥� despite what are often perceived as Trump's anti-Latin American policies and rhetoric. But a dissenting IDB cohort, including Mexico and Argentina and backed by several former Latin American presidents condemning the U.S. move, may try to postpone the balloting until after the November U.S. presidential election.
READ MORE: Has Latin America's Tragic COVID Year Created Another Economic 'Lost Decade'?
Claver-Carone calls that an 鈥渙bstructionist鈥� ploy. And he insists it would set the IDB back in its efforts to help Latin American and Caribbean economies rise from the ashes after suffering some of their worst nosedives in decades thanks to the coronavirus disruption. That鈥檚 especially important, he adds, because he feels there is already too large a gap between what the region needs and what international financial institutions like the IDB deliver.
鈥淟atin America and the Caribbean has the largest financing gap in the world, especially for small business,鈥� says Claver-Carone. 鈥淔or so many years, China filled that gap. Now, Chinese lending to the region has decreased dramatically and we have the opportunity to step up or sit back and see who else fills that gap.鈥�
One of the biggest complaints about the U.S. 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 Latin American and Caribbean governments 鈥� $13 billion last year. But Claver-Carone argues that discarding the IDB's presidential rule will give it new energy 鈥� and that he can make the bank more effectively governed, more robustly capitalized and, he says, more democratic. In its six-decade history, the bank has had only four presidents 鈥� Moreno, from Colombia, has held the post for 15 years 鈥� and Claver-Carone has promised to serve just one, five-year term.
He also says he鈥檇 make the IDB more inclusive for the region鈥檚 smaller member countries.
鈥淚n 61 years 鈥� including the vice-presidencies, senior leadership 鈥� there鈥檚 never been anyone from the Caribbean, from Central America, from the smaller South American countries,鈥� he says. 鈥淭hat鈥檚 not inclusive.鈥�
Mauricio does not have a history of listening 鈥� the most important thing for this position. He lives in a bubble.Christopher Sabatini
Some top IDB management posts have actually been held by people from those countries. But Claver-Carone鈥檚 campaign message has struck a chord with their governments 鈥� like Haiti鈥檚 which is backing his candidacy even though it鈥檚 one of the bank鈥檚 biggest recipients. After the catastrophic earthquake there a decade ago, the IDB pledged $2 billion to help build new homes, roads, schools and industrial parks.
鈥淭hat relationship is very important,鈥� says Gilbert Saint-Jean, a Haitian-American biologist and development expert in Miami who is part of an expat NGO group, led by the Ayiti Community Trust, that recently submitted its own IDB grant proposal to help rebuild Haiti鈥檚 battered tourism sector.
鈥淓specially for a country like Haiti,鈥� says Saint-Jean, 鈥渁s far as rebuilding, becoming a sustainable emerging economy 鈥� IDB support, yes, is one of the essential components.鈥�
DELIVERING DEVELOPMENT
Guyana鈥檚 new government is another in the Caribbean supporting Claver-Carone鈥檚 bid. Skeptics suggest President Irfaan Ali is simply repaying the Trump Administration for siding with him in this year鈥檚 disputed presidential election. (His predecessor, David Granger, finally stepped down last month.) But Foreign Secretary Robert Persaud says Guyana trusts Claver-Carone will give Caribbean countries a greater voice on issues critical to them such as climate-change mitigation.
鈥淲e are small economies, but we do have big solutions to global problems,鈥� Persaud told SA国际传谋. 鈥淎nd we believe Mr. Claver-Carone鈥檚 leadership will strengthen the IDB鈥檚 ability to deliver development impact to countries such as ours.鈥�
Claver-Carone鈥檚 critics also suggest that, rather than resisting IDB patronage, what he鈥檚 been delivering so far are "vote-buying" promises of top IDB positions to countries like Guyana, as well as to larger nations like Brazil. He and government officials like Persaud deny the charge; Claver-Carone calls it 鈥渞idiculous,鈥� though he does point to younger officials like Jamaican Finance Minister Nigel Clarke as a 鈥渘ew generation of talent in the region we鈥檇 like to recruit.鈥� (Jamaica has also endorsed Claver-Carone.)
Either way, it鈥檚 the larger shareholder countries like Brazil that will wield the most clout in this weekend鈥檚 IDB election. Right now it's uncertain if Claver-Carone will be voted in, or if countries like Argentina 鈥� which has put forward its own candidate, Strategic Affairs Secretary Gustavo Beliz 鈥� will force the postponement. (Both Brazil and Argentina hold 11 percent IDB shareholder stakes, second only to the U.S.)
The latter cohort reasons that if Joe Biden defeats Trump in November, enthusiasm for Claver-Carone鈥檚 candidacy will wane since his and Biden鈥檚 outlooks on hemispheric policy will be too opposed to make the U.S.-IDB relationship workable. Claver-Carone insists it will work 鈥渘o matter what happens November 3," but Biden's campaign said last month the former U.S. vice president opposes Claver-Carone's IDB candidacy.
CUBA OBSESSION
鈥淭he vote postponement is the best way,鈥� says Christopher Sabatini, a senior Latin America fellow at Chatham House, an international affairs think tank in London, and one of the most vocal critics of Claver-Carone鈥檚 IDB candidacy.
Many Latin America experts like Sabatini question Claver-Carone鈥檚 international finance experience. In that arena Claver-Carone, a lawyer, has only served as U.S. representative to the International Monetary Fund, or IMF, though under Trump he helped create agencies like the U.S. International Development Finance Corporation and programs like Am茅rica Crece, or Growth in the Americas.
They also insist he鈥檚 uninterested in if not hostile to the sort of environmental issues that preoccupy the Caribbean. But Sabatini says the biggest concern is what he calls Claver-Carone鈥檚 extremist 鈥渙bsession鈥� with toppling Cuba鈥檚 communist regime.
Cuba is not an IDB member. But Claver-Carone鈥檚 detractors have long complained that he sees every issue through a narrow Cuba prism 鈥� and as a result, Sabatini fears he鈥檒l politicize the IDB and base loan decisions on loyalty to that particular agenda.
鈥淗e has pursued a very Manichean, us-versus-them policy throughout his career when it comes not just to Cuba but to any country that consorts with Cuba,鈥� says Sabatini. He warns 鈥渢he moment anyone of leftist leanings in the Caribbean makes overtures to Cuba, they will have to pay鈥� when it comes to a relationship with the IDB.
Sabatini also points to what he says is Claver-Carone鈥檚 reputation in Washington for tuning out other viewpoints.
鈥淢auricio does not have any history of listening 鈥� which is the most important thing for this position,鈥� says Sabatini. 鈥淗e lives in a bubble.鈥�
The Biden campaign too says it believes Claver-Carone is "overly ideological" and "underqualified" to head the bank.
Claver-Carone denies he鈥檇 push a political agenda as IDB president. 鈥淚 will be a steward of the IDB鈥檚 agenda, not my own,鈥� he says. He also insists his temperament will be an asset for the bank.
鈥淵ou can be passionate about democracy and human rights and also about economic growth and development,鈥� he says.
Depending on what happens this weekend, Claver-Carone鈥檚 passions may well become the Inter-American Development Bank鈥檚 passions.
