This Is No Time To Weaken The Inter-American Development Bank
On September 12-13, the shareholders of the Inter-American Development Bank (IDB) are scheduled to elect the Bank’s next president. This decision will have far-reaching consequences for the Bank and the millions of people it serves. We join those who believe there are compelling reasons why the shareholders would be prudent to postpone the election until next year.
Each of our countries has a stake in the outsize role the IDB plays in addressing key challenges to social and economic development in Latin America and the Caribbean – widespread poverty and inequality, rampant corruption, weak justice systems, violent gangs and narco-traffickers, climate change, and millions of refugees, to name a few. These daunting problems are compounded by the COVID pandemic and resulting economic crisis, which will have grave ramifications for the social, economic, environmental, and political stability of the region for years to come. They can only be solved if we work together, so we should care about who leads an institution that will play a key role in determining the region’s future.
The Trump administration has nominated Mauricio Claver-Carone to be the next president of the IDB, and several governments have said they support his nomination. Several have said they are opposed. Some have said they may boycott the vote to prevent a quorum. There are other candidates, and other governments have not yet expressed a preference. These starkly divergent views alone should give pause about this decision.
Mr. Claver-Carone is a political appointee in the Trump White House whose controversial nomination would break a longstanding precedent that a Latin American serves as president of the IDB. Several former Latin American heads of state have challenged the legitimacy of a Claver-Carone presidency as it would contradict an explicit political commitment dating to the Bank’s founding 61 years ago, which located the IDB in Washington with a Latin American president – a commitment that has proven its value in countless ways for the institution and its shareholders. They have wisely called for delaying the vote to allow for further consideration and discussion of the implications of such a fundamental structural change. Moreover, regardless of who occupies the White House next year, there are plenty of Latin Americans – women and men – who have the experience and temperament to excel as the next IDB president and who would enjoy bipartisan support in Washington.
It is also a concern that Mr. Claver-Carone reportedly pledged to fill the number two position at the IDB – a position always held by a U.S. citizen – with a Brazilian, after that government became the first to endorse his candidacy. This is not the way such important decisions should be made. Breaking this precedent would have serious ramifications for the United States far beyond the next five years.
Electing Mr. Claver-Carone to a five-year term only weeks before the U.S. presidential election would trigger an immediate institutional crisis at the IDB and put in jeopardy U.S. support for the Bank, regardless of who wins the U.S. election, at the very time the Bank is seeking a capital increase. A Biden presidency could trigger an effort to replace Claver-Carone, which would cause further turmoil and distraction for the IDB and its shareholders when the Bank needs to focus all of its attention on responding to the region’s crises.
It is important to note that the peoples of the Americas – from the small states of the Caribbean to the large economies of South and North – have joined together in the past to overcome regional problems and help one another achieve their potential. The IDB has played a central role in sharing experiences and catalyzing cooperative action, as well as through financing, drawing on both the public and private sectors. Since its origins in the Eisenhower Administration, the IDB and its members have striven for partnership over dominance, and this formula will be even more important in the 21st Century as the Americas compete in a global economy. An IDB presidency begun amidst serious controversy would limit the Bank’s unique potential. The need for steady IDB leadership that can build consensus has never been greater.
Rather than changing the foundational structure of the IDB by means of a vote on its next president in the midst of the COVID crisis, the shareholders should wait a few months and weigh the long-term implications of abandoning such a well-established precedent. Then we should unite behind a candidate from the region with the vision, the credibility, the temperament, and the skills to chart a better future for the people of Latin America and the Caribbean.
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Patrick Leahy is Vice Chairman of the U.S. Senate Appropriations Committee
George Shultz is the former U.S. Secretary of State
Robert Zoellick is the former President of the World Bank
Carla Hills is the former U.S. Trade Representative
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