Trump breaks another convention: Election of President of the Inter-American Development Bank

The IDB also has 20 extra-regional partners (16 European, in addition to China, Japan, Israel and South Korea) that have full voting rights.

On June 16, the Trump administration launched Claver-Carone’s candidacy for the presidency of the Bank.

By Ambassador Ravi Bangar

Mauricio Claver-Carone, a Cuban-American and present senior director for Western Hemisphere affairs at the National Security Council was elected president of the Inter-American Development Bank (IDB) on 12 September in a virtual meeting.

He was appointed at the National Security Council in September 2018, he worked under the direction of hawk Bolton. Like his former boss, he also “enjoys” reputation of being “arrogant and confrontational”.

He garnered the support of a majority of the region’s countries, including Brazil, Colombia, El Salvador, Ecuador, Jamaica and Haiti.

Former Costa Rican president Laura Chinchilla and Gustavo Beliz, secretary of strategic affairs to the president of Argentina, who worked at the bank for almost 15 years, were both in the running, but quit the race before the vote.

Brazil and Colombia led the US campaign in the region for the election of Claver-Carone. The attempt of Argentina, Chile, Costa Rica, Mexico and the European Union to delay the bank’s vote came to a nought. It was reported that Argentina was among 16 countries which abstained.

Earlier, five former Latin American presidents, Fernando Henrique Cardoso from Brazil, Ricardo Lagos from Chile, Julio María Sanguinetti from Uruguay, Juan Manuel Santos from Colombia and Ernesto Zedillo from Mexico, immediately rejected the nomination in a letter that stated that Claver-Carone’s candidacy “implies a break with the unwritten rule, but respected from its origin, by which the IDB, for reasons, among others, of financial efficiency, would have its headquarters in Washington, but in exchange would always be led by a Latin American”.

He will succeed Luis Alberto Moreno Mejía, a Colombian businessman and former Ambassador to the US. Thus, came to an end a long journey for Moreno in the bank who was first elected in 2000 and re-elected in 2010 and 2015.

The IDB in its 61 years of existence has been led by a pick from a Latin American country. Claver-Carone won the election with support from more than half of the bank’s 28 regional member countries.

On June 16, the Trump administration launched Claver-Carone’s candidacy for the presidency of the Bank. He started his career in Washington as a lobbyist leading a political action committee that worked to preserve the U.S. embargo on Cuba. He previously worked at the Treasury Department and as a U.S. representative to the International Monetary Fund. He is most widely known for his central role in crafting the Trump administration’s policies toward Venezuela and Cuba.

The Bank founded in 1959 with the stated objective to meet long-term financing for economic, social, and institutional development in Latin America and the Caribbean. The IDB is a major source of financing for Latin American and the Caribbean countries and lent US$ 13.5 bn in 2018.

The bank has its role cut out over the next few years as countries in the region grapple with a major recession that predates the pandemic but has worsened in recent months. Latin America and the Caribbean is one of the regions hardest hit by the pandemic–with only 8% of the world population, it represents 25% of infections and 28 % of deaths from COVID-19 in the world total. The IDB will substantive role play in the region’s recovery since the Bank channels over the US $ 13bn annually to financing infrastructure and development in the region–more than any other multilateral development bank, including the World Bank.

Through the nomination of Claver-Carone Trump has sought to curry favour among conservative Cuban and Venezuelan-Americans. As for Cuba, it may be interesting to note that the Castro regime signed but never ratified the 1959 agreement establishing the IDB and therefore has never had membership status. Under the bank’s rules, membership in the IDB requires prior membership in the OAS, a process that began for Cuba in 2009. The 1962 OAS resolution that excluded Cuba from participation in the organisation ceased to have effect as of 3 June 2009. Currently, Havana has decided not to accept re-admission to the hemispheric body. Thus its, membership of the bank remains in suspended animation. Very early in under the Trump presidency, the US has officially turned back the clock on U.S.-Cuba relations. Venezuela remains in the US cross hairs even at this late of Trump’s administration.

Trump’s move also reflects its approach to counter the growing presence of China in the IDB and in the region. The imposition of US president of the bank intensifies the power struggle between China and the United States in the region and intentionally drives a wedge between Latin American nations. China has observer status in the Organization of American States (OAS), the Economic Commission for Latin America and the Caribbean (ECLAC) and the Pacific Alliance. It also maintains close ties with the Caribbean Community (CARICOM) and with the CAF-Development Bank of Latin America.

In 2013, the China Co-Financing Fund for Latin America and the Caribbean (“China Fund”) was created within the framework of IDB Invest–the Bank’s financial arm oriented to the private sector. The Fund provides financing for infrastructure projects, with an initial commitment of US $350 million. The IDB and the Chinese Council for the Promotion of Trade Exchange (CCPIT) have also co-sponsored the China-Latin America and the Caribbean Business Summit for the past 13 years, the last one held in Panama in 2019.

As extension of US-China trade tensions, the Trump administration has sought to undermine China’s growing relationship with the IDB. The last annual meeting of the IDB was scheduled for March 2019 in the Chinese city of Chengdu. The meeting was suspended due to a US government threat to block a quorum if China did not admit the participation of Venezuela’s Juan Guaidó’s representative at the meeting (Guiado is the self-proclaimed president of Venezuela and has the support of around 60 countries). China wanted to avoid the presence of both Guaidó’s and Maduro’s representatives so the event was cancelled.

The IDB also has 20 extra-regional partners (16 European, in addition to China, Japan, Israel and South Korea) that have full voting rights.

As for India, it has yet to make up its mind. One only hopes that it will be done soon to further the interests of its trade and investment in the region with which it has shown some alacrity and dynamism in the last six years. The time has come, taking a cue from India’s engagement with Asia from “Look Asia” to “Act Asia”. In the case of Latin America, it will be a positive opening, even if a comprehensive “Look Latin America” policy is crafted and implemented by mandarins in Delhi that includes deciding quickly on memberships and upgrades with countries and institutions in the region.

It remains to be seen if Trump supported the newly minted president of the IDB will be able to work effectively in case of Biden victory and a potentially a Democrat-majority Senate post-November.

(The author is Former Ambassador to Colombia and Ecuador, High Commissioner to Cyprus, Deputy Permanent Representative to the WTO and Deputy High Commissioner to Singapore. At the Ministry, he headed Multilateral Economic Relations, West Africa and East & Southern Africa Divisions. The views expressed are personal.)