President Trump’s man elected to head the Inter-American Development Bank (IDB)

17 September by Ariela Ruiz Caro


Inter-American Development Bank headquarters at Washington, D.C (CC - Wikimedia)

Failures in the region’s coordination have allowed President Trump’s candidate to easily win the election of the IDB presidency despite the violation of the institution’s rules.

In an expeditious process, on September 12, Mauricio Claver-Carone has been elected president of the Inter-American Development Bank (IDB) with the support of 30 of its members, 16 abstentions and 2 absences, among which is China. Among the latter are, according to a statement from the Argentine Foreign Ministry, five Latin American countries (Argentina, Chile, Mexico, Peru, and Trinidad and Tobago), in addition to the member countries of the European Union. The plan to prevent the regulatory quorum at the virtual meeting, scheduled for September 12, had put Mauricio Claver-Carone’s candidacy in check. The governments of Argentina, Chile, Costa Rica and Mexico have publicly supported the postponement of the elections. With 22.2% of the voting power of the four, plus 1.21% of Uruguay —which had joined the proposal, without making it public— only 1.7% of the votes were missing to frustrate the attempt without precedents of Donald Trump, to elect an American citizen as president of the institution. In order to reach the required 25.1%, it had the support of some European countries with small percentages of vote that could have covered Peru´s share Share A unit of ownership interest in a corporation or financial asset, representing one part of the total capital stock. Its owner (a shareholder) is entitled to receive an equal distribution of any profits distributed (a dividend) and to attend shareholder meetings. of votes if it finally did not support the proposal. However, the plan failed.

 A ghost haunts the region

At this stage, the week before the election, the rumor that Mexico would abandon its allies began to haunt the region like an elusive and crouching ghost. Faced with the silence of his Government, on Tuesday, September 8, the former Foreign Minister of Mexico, Jorge Castañeda, put in black and white the alleged betrayal —without mentioning the word— of Mexican President Andrés Manuel López Obrador (AMLO).

Castañeda explained the change in the Mexican position as follows: “Either Trump demanded it during the private meeting they held in Washington, although it is not my impression; or Claver-Carone himself requested it in the presence of Trump —more likely—; or López Obrador understood, without explicit request, that this was a crucial matter for his colleague and American friend. Although at this point, looking bad with whom probably is going to lose the November presidential election could not be of greater importance.“In this way, the Mexican Government —with 7.3% of the voting power— would be present in the virtual election to reject the appointment of an American to the presidency and give his vote to the hitherto Argentine candidate, Gustavo Béliz. The background of this assembly would be to ensure, with his presence, the quorum that the session needed to elect Claver-Carone and to look good with his powerful neighbor of the north. According to the former Mexican Foreign Minister, López Obrador “knew very well that he had marbles to make a viable attempt to prevent the arrival of a US citizen to a Latin American position. He did not do it”.

It is not the first time that President López Obrador acts in tune with Trump. On July 8, he made a much-questioned visit to Washington to celebrate the first anniversary of the TMEC, the former North America’s new free trade agreement. The other partner, Justin Trudeau, President of Canada, did not even attend. But the support for Trump, in a pre-election scenario, was not only evidenced by his visit, in which the situation of Mexican migrants and their rights was not even on the agenda.

His speech at the White House will remain among the most shameful and humiliating chapters in Latin American history. In the gardens illuminated by a radiant day, standing on the podium next to Trump, he said: “During my term as president of Mexico, instead of grievances towards myself and, what I consider most important, towards my country, we have received from you, understanding and respect […] I wanted to be here to thank the people of the United States, your government and you, President Trump, for being increasingly respectful to our Mexican countrymen […] You have not tried to treat us as a colony, Rather, it has honored our status as an independent nation. That is why I am here to express to the people of the United States that their President has behaved toward us with kindness and respect. You have treated us as what we are: a country and a dignified, free, democratic and sovereign people”.

 The Argentine response

The day after the publication of Castañeda and journalistic reports that indicated that “Trump’s chosen one was preparing for victory after the regional opposition fades”, Argentine Foreign Minister Felipe Solá announced that Mauricio Claver-Carone would be the new IDB president because the votes to prevent the regulatory quorum on the election day had not been obtained. What a tragic and shameful reality!

The details of the negotiations, threats, and awards may never be known. Nor will we be certain whether all the governments that had publicly expressed themselves in favor of postponing the elections, for the reasons we have mentioned, would have dared not to attend to prevent the quorum. Given the balance Balance End of year statement of a company’s assets (what the company possesses) and liabilities (what it owes). In other words, the assets provide information about how the funds collected by the company have been used; and the liabilities, about the origins of those funds. of forces in the Bank, supporting the postponement of the election until March 2021, during the General Assembly to be held in Colombia, implied resorting to the only legal mechanism available at the institution: preventing the regulatory quorum on election day. That means not being present at the election. There was no other way.

Under these circumstances, with the luck cast, the Argentine government officially announced on September 10 that it would abstain from voting, which implied participating in the election and providing the quorum. In addition to withdrawing his candidate, Gustavo Béliz, he urged other governments to abstain from voting. Maintaining Béliz’s candidacy until the last moment was probably a mistake, since it did not allow the principled demand promoted by Argentina to postpone the election to be clearly conveyed, and rather led to confusion in public opinion. The government of Peru, for example, explained that in the evaluation process the option between Trump’s candidate and the Argentine had to be defined, in addition to the postponement of the election. Barring a miracle, the move had no chance of success.

Indeed, without the support of Mexico, Costa Rica reported that it gave the vote to Claver-Carone after the telephone dialogue that he had with the Minister of Finance and the Foreign Minister, with whom he promised to promote some proposals of the former Costa Rican candidate, Laura Chinchilla Miranda. President of the nation in the period 2010-2014, Chinchilla had withdrawn her candidacy on September 3 when denouncing the strong interference of President Donald Trump and the violation of the rules established in the IDB election. Probably with similar promises, the Uruguayan government also voted in favor of Trump’s candidate, despite its commitment to bow to the proposal to postpone the election. The Senate bench of the Frente Amplio has requested the appearance before Congress of the Foreign Minister, Francisco Bustillo, to explain the Uruguayan vote in the election of the new IDB Presidency

 The concern in the United States over the election of Claver-Carone

Since Trump nominated his current adviser for the region at the National Security Council of the White House for the IDB presidency in mid-June, former presidents of Latin America and Europe, diplomats, figures from political and cultural life, academics and citizens in general, did not cease to denounce the need to postpone the election because customary international law has been violated (Resolution 73/203 of December 20, 2018 of the United Nations General Assembly) when applying for the presidency to a candidate who is not Latin American or Caribbean. That is, altering the rules, as Trump did, would have required a debate that did not take place. The pandemic and the closure of the borders prevented the Annual Assembly scheduled for March of this year from taking place.

The candidacy of the also American anti-Cuban blogger —in fact, it is his greatest work experience— transcends the nationality of the candidate. Mauricio Claver-Carone does not meet the requirements to manage an institution like the IDB. The seriousness of his eventual appointment is described by senior former US officials, Democrats and Republicans, in a letter released on September 3, in which they textually state: “Electing the American Mauricio Claver-Carone as IDB president would not only unleash an unprecedented institutional crisis in the hemispheric entity, but would put at risk Washington’s vital support for this entity.”

In the message they warn that “electing him for a five-year term, just a few weeks before the US presidential elections, would trigger an immediate institutional crisis at the IDB and endanger US support for the Bank, regardless of who wins the presidential US election, at a time when the Bank seeks a capital increase. “Worse still. They note that a Joe Biden win could trigger an effort to replace Donald Trump’s nominee,” which would cause further chaos and distraction at the IDB and for its shareholders, at a time when it should focus all its attention on responding to the crises in the region. "The authors of those warnings are none other than Democrat Patrick Leahy, vice chairman of the US Senate Appropriations Committee; Republican George Shultz, former US Secretary of State; Republican Robert Zoellick, former President of the World Bank World Bank
WB
The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

, and Republican Carla Hills, former US Trade Representative.

 The consolation prize (el premio consuelo)

Colombia did well with the task entrusted to it by Donald Trump of managing the region’s support for the American blogger. President Iván Duque took charge of the phone calls to his colleagues, while the Foreign Ministry was used as a platform to add the votes. On August 18, one day after Claver-Carone’s visit to Bogotá, in the company of the White House National Security Advisor, Robert O’Brien, the Colombian Ministry of Foreign Affairs published a statement supporting Claver-Carone, in which countries were urged not to postpone the election. This was immediately signed by 17 countries (Bahamas, Bolivia, Brazil, Colombia, Ecuador, El Salvador, United States, Guatemala, Guyana, Haiti, Honduras, Jamaica, Panama, Paraguay, Dominican Republic, Suriname and Venezuela) with which it met requirements for his nomination. He needed at least 15 votes from the American continent, which in turn would represent more than 50% of the Bank’s voting power. Only the United States, Brazil, Colombia and Venezuela (represented by Guaidó) account for 48% of the suffrage power.

During the visit, both visitors had announced a loan for up to five billion dollars for Colombia within the framework of the “United States-Colombia Growth Initiative”, a US mechanism that grants loans with the conditionality of restricting relations with China. The so-called “America Grows Initiative” seeks to guarantee and regularize investments, especially in energy and infrastructure with the seal of the current Republican administration and is open to all countries in the region, with the exception of Cuba, Venezuela and Nicaragua.

 Drive China away

According to the virtual IDB president, there is concern in the United States about unnatural relations, in reference to the close commercial, financial and investment relations that some countries such as Peru and Chile, among others in the region, maintain with China.

The triumph of Trump’s candidate in the IDB presidency will generate tensions in the region and will try to restrict chinese influence in the region. Claver-Carone has pointed out that “neither Republicans nor Democrats cared about the IDB in the past (…) When IDB Invest was created, no capital was injected: it was a mistake that we want to correct. China filled those gaps in the last few years and began to lend money to the region (…) The best we can do is work with all our allied friends and all IDB shareholders to make it a true financial powerhouse. It is much better for the United States and the region to do it than, out of desperation, to seek funding from other countries”.

While the IDB’s lending policies have never been far from Washington, the presence of a hawk from the radical wing in the Bank’s presidency —representative of a government that denies climate change that abandons the Paris Agreement, with extremely ideological positions, that not all countries share— represents a threat to the region in the definition of the terms of its international insertion, based on its interests.

With only 40 days to go until the presidential elections, Donald Trump has easily managed to impose his candidate, violating customary international law applicable to the Bank rules. Thus, the presidency will be in charge of a US citizen heir to Trump and, the vice-presidency, in charge of a Latin American or Caribbean citizen. The representative of the country that agrees to be under the orders of Claver-Carone, will culminate with the endorsement of this outrage. One more capitulation of the region to the United States. As Heraclitus said, 500 years before Christ, go divided and together you will be defeated.




Ariela Ruiz Caro

Economist. Analyst of the Americas Program for the Andean/Southern Cone region.

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