The United States First, the Americas Second
The Trump Administration’s decision to appoint one of its own to lead the Inter-American Development Bank is poised to upset the region’s most effective international institution.
The Trump administration has nominated Mauricio Claver-Carone, a senior official at the US National Security Council, to serve as the next president of the Inter-American Development Bank (IDB). This decision is an attempt to break the 60-year old unwritten understanding that a Latin American should be at the Bank’s helm. This nomination not only stresses how the recent political changes in the region are affecting its regional governance but it is also yet another example of the continuous disdain the Trump administration has for multilateralism and cooperation.
Founded in 1959, the IDB has 48 Members States, of which only the 26 Latin Americans can access loans from the institution. The Bank is one of the most efficient and effective international institutions working in Latin America. One of the reasons is its balanced governance structure. On the one hand, as a nudge to the US being the biggest shareholder and creditor, the Bank’s headquarters are in Washington and the executive Vice-President is traditionally a US citizen. On the other hand, as a signal that the borrowing members should have a significant say in how the Bank operates they, jointly, hold a narrow majority of the votes and the Bank’s president has always been one of their own.
Over the last half-decade, the political landscape in Latin America has changed. Various countries like Bolivia, Brazil, Uruguay, and Paraguay have recently moved to either the political centre or the right. Besides, the Venezuelan government – who used to be the anti-US leader – has imploded to the extent that there are now two different “heads” recognised by different countries. Five years ago, none of these countries would have ever sided with a Republican president on hemispheric affairs, let alone one like Donald Trump. Today, they have already publicly supported the US nomination for the Bank’s President, alongside more traditional US allies like Colombia. That said, as the Editorial Board of the Financial Times states, “the response elsewhere in the region, as well as inside the IDB, was a sharp collective intake of breath”.
The Trump administration is successfully taking advantage of the swing of the region’s political pendulum to advance its own agenda. Of course, this political move is not wrong in and of itself. After all, horse-trading is a routine practice when negotiating high-level appointments to international organisations. In addition, Mr Claver-Carone has experience representing the US at the IMF and as a senior advisor in The White House. In case he wins the election, he has also vowed to stick to one five-year term, something his potential predecessors have not done. The IDB has only had four presidents in 60 years. It would be healthy for the Bank to renew its leadership a bit quicker than it has in the past. Yet, breaking away from the unwritten agreement to have a Latin American in charge is a dangerous proposition. It is essential to keep in mind that this goes far beyond symbolism. There are two critical issues to keep in mind. First, this decision raises questions about the future of hemispheric relations and, should the Trump administration be re-elected, it raises concerns about the role of the United States in global governance. Electing a US official who personally supports far right-wing politics in the region could bring about the politicisation of the Bank’s loans. While this has happened to a certain degree in the past, the fear of bringing someone from the Trump White House to the Bank is palpable given its record on international cooperation.
Second, Latin America is the epicentre of COVID-19 pandemic. The IMF forecast paints a grim picture of the next two years. The IDB will have to play a fundamental role in the region’s recovery, and it will need all the political capital it can get. Pushing such a divisive candidate through and breaking away with the historical understanding will effectively mean he will hit the ground limping. Even if he becomes a technocratic leader guided by expertise rather than politics, which is highly unlikely, it will take him a long time to build credibility. The IDB has billions to borrow, and it needs to do so without the Trump Administration’s politics in its decision-making process.
Even though mathematically speaking, Mr Claver-Carone’s chances are good; this nomination should not go through. The IDB is one of the best international organisations in the region, and part of that is based on how it is set up. Appointing a US citizen will cause an imbalance of power and will harm the Bank’s credibility. The Europeans, Japanese and Canadians, together with Mexico, Argentina and others should rally together and propose a Latin American candidate with ample experience to lead the Bank.
Protecting multilateralism ought to remain a fundamental priority for Latin America, even if it means clashing with Washington.
Diego Salama is a PhD Candidate in History of International Relations at Leiden University. His research focuses on the history of the United Nations and Peacekeeping. Also, Diego currently works for the United Nations University as a Public Information Officer.