The Inter-American Development Bank (IDB) is rarely the world’s premier diplomatic spectacle. However, the recent election of the institution’s new incoming president proved to be yet another realm of conflict between the hardline administration of President Donald Trump and Latin American nations seeking greater autonomy over their own affairs.
A Break with Precedent
Established in 1959 by the Organization of American States (OAS), the IDB has grown to include some 48 sovereign nations, with 26 of them borrowing states (which the bank lends to) which primarily consist of Latin American countries.The IDB is the largest multilateral financier of the Latin America and the Caribbean region, and coordinates various policies to combat income inequality, climate change, and other challenges facing the continents.
Historically, the process of selecting a leader for the bank has been a compromise between the U.S. and the countries of the region. While the U.S. is endowed with 30 percent of the voting power in the assembly, the Latin American nations possess just over 50 percent of the voting power and it has been a long standing precedent that the president of the body is from Latin America (and the executive vice president is usually American). In fact, since the organization’s inception, the president has always come from a Latin American country. As Michael Shifter and Bruno Binetti write, “Selecting a Latin American as president has been a way of respecting regional autonomy and giving other governments involved a sense of ownership in the institution.”
In a Trump Administration preferring coercion to cooperation in the region, there has never been any place for this precedent. For example, in June of this year, without any prior consultation with IDB members, the White House announced that it intended to nominate Mauricio Claver-Carone to be the next president of the body. Not only would Claver-Carone be the first American president of the IDB, he also brings historically little experience to the table. Claver-Carone notably has zero experience in a federal central bank or even in the finance industry at all. He is neither an economist nor a politician, but rather a lawyer by trade, who has served as a lobbyist and member of the board of directors for the hard-right lobbying group Cuba Democracy Advocates and briefly as an adjunct professor at George Washington University. Claver-Carone’s complete history of governmental service adds up (chronologically) to a brief stint on the Trump transition team, a year as an adviser at the Treasury Department, five months as the acting U.S. representative to the International Monetary Fund (IMF), then finally less than two years as a Latin America advisor on the National Security Council (NSC). In comparison, the first president of the IDB- the Chilean Felipe Herrera- was a former finance minister of his country, general manager of its central bank, and Executive Director of the IMF before his election to the presidency (and he was later a nominee of the Salvador Allende government for United Nations Secretary-General). The second president, Mexico’s Antonio Ortiz Mena, led the Mexican social security office and finance ministry for almost two decades prior to his presidency. The two successive presidents served extensively in the private banking sector, and then later as central bankers or finance ministers (with Claver-Carone’s predecessor serving also as Ambassador to the United States of Colombia) before assuming the presidency. In addition to breaking the geographic precedent, Claver-Carone’s selection represents a clear break from the typical occupational profile of an IDB president.
These twin precedents- of Latin American heritage represented and relevant occupational experience- have long formed the backbone of this particular project of regional integration and multilateralism. It was in defense of these norms that this nomination was condemned by a plethora of different states with differing relationships with the United States, as well as dozens of former prime and foreign ministers and Obama-Biden Administration officials. The European Union and Canada called on the body to delay the vote until after the American presidential election, while Argentina, Costa Rica, Mexico, Peru, and the majority of voting nations (but not vote share) opposed the nomination and sought to have it delayed indefinitely. Even the staunchly conservative government of Chile characterized Claver-Carone’s election as “clearly inadequate” and deemed his criticism of dissenting nations as needlessly “aggressive.”
Domestically, while most Congressional Democrats have opposed the nomination (chiefly Sen. Patrick Leahy-VT ), Cuban and Venezuelan hardliners like Sen. Bob Menendez (D-NJ) and Sen. Marco Rubio (R-FL) endorsed Claver-Carone. They were joined internationally by a myriad of Trump-aligned governments, including Bolivia, Brazil, Colombia, El Salvador, Guyana, Haiti, Japan, and Paraguay. In the end, Costa Rican and Argentine candidates withdrew and Claver-Carone won election to the presidency despite the strong opposition movement, which will surely loom even larger should Joe Biden win the White House in the middle of Claver-Carone’s allotted five-year term.
What Would a Claver-Carone Presidency Look Like?
The IDB is by no means a perfect organization. Its financial support for the Camisea natural gas project in Peru, responsible for mass destruction of the Amazon and the violation of the rights of indigenous peoples, is one example of its service to private interests and manipulation by capital. A region long plagued by gross inequalities is now embroiled in a struggle with the twin terrors of the coronavirus and the climate crisis and cries out for public investment and aid. Claver-Carone’s proud embrace of the Trump Administration’s combative, belligerent, and punitive Latin American policy risks derailing these future aid efforts. As a public intellectual and an NSC staffer, he has been the face of a right-wing campaign to reinstate draconian sanctions on Cuba on top of the existing U.S. embargo. This is in reaction to the Obama Administration’s “Cuban thaw” that broke with the strategy of punishment that has been condemned routinely by the United Nations and has deprived Cubans of vital medicine and food, all while enacting no political change on the island. At the NSC, Claver-Carone attempted to apply the very same “maximum pressure” tactics to the dictatorships in Venezuela and Nicaragua with similarly disastrous results. His exceedingly ideologically narrow conception of American interests and power in the region, as well as of the region’s problems, has amounted to punishment for punishment’s sake.
Within the context of the history of American intervention in the region, Claver-Carone’s appointment makes sense. But that is not a compliment. From the 1901 Platt Amendment that proclaimed legitimate the American occupation of Cuba by subjecting the island to permanent policy vetoes from the American sugar companies’ representatives in Congress to the Reagan Administration’s full-throated support for anti-communist death squads that committed war crimes in El Salvador and Guatemala, American foreign policy in the region has been weaponized without constraint on behalf of commerce. Fetishization of capitalism on America’s side has led the U.S. to betray its principles, compelling it to overthrow democratically-elected governments to create the so-called “banana republics” so that American produce companies could sell cheap fruit. Cold War groupthink led the U.S. to support “S.O.B.s” like Rafael Trujillo, Anastasio Somoza, Roberto D’Aubuisson, Augusto Pinochet, and Jorge Rafael Videla even as they presided over heinous massacres. The IDB was one of the last areas of U.S.-Latin America relations in which the U.S. reserved some degree of autonomy for the region, seeking to rule by consent, not coercion. Indeed, in negotiating the outlines of the IDB and its predecessor (the Inter-American Bank), the Roosevelt and Eisenhower administrations agreed to a substantial minority share of the vote and a concessional lending program in the IDB to counter any allegation of financial domination.Yet the Trump Administration, with its antiquated policy paralleling the Monroe Doctrine and forged by its former figurehead and Claver-Carone’s mentor, John Bolton, is dead set on instead turning the IDB into yet another sphere of American hegemony and rule by fiat.
A New Cold War? Or a Failure to Learn the Lessons of the First One?
Furthermore, Claver-Carone, Trump, and Secretary of State Mike Pompeo have made clear their intentions to turn the IDB and other Latin American fora into areas of protracted great power competition in a contrived “new cold war” with China. Since 2001, Chinese economic and political influence in the region has grown tremendously, in tune with broader trends of increasingly salient Chinese soft power worldwide. Chinese and Latin American officials have often exchanged visits while Argentina, Brazil, Chile, Costa Rica, Ecuador, Mexico, Peru, Uruguay, and Venezuela have inked “strategic partnerships” with China in recent years. Some 19 countries, furthermore, are participating in the Chinese Belt and Road Initiative (BRI), which is centered around infrastructure investment.
Trade between China and the region has increased from $17 billion to over $300 billion since 2002 while U.S. aid to the region, aside from a temporary increase during the Obama Administration, has largely declined. The Trump Administration, rather than helping the people of Haiti rebuild their infrastructure, ensuring the Colombian peace accord holds, or supporting anti-corruption efforts throughout the region, instead cut aid to Central American countries with large numbers of asylum seekers and threatened military action against Venezuela. Diplomatically, China is also seeking to isolate Taiwan internationally by persuading remaining Caribbean and Latin American countries that recognize Taiwan to flip. Panama, the Dominican Republic, and El Salvador have all flipped from Taiwan to the PRC in recent years.
While it is clearly true that China’s influence is growing in Latin America, the strategy of weaponizing the IDB in some sort of essential bipolar power struggle badly misreads both history and the present. It is important to note amid the discussion of a second Cold War that even in the first Cold War, a plurality of the region’s states were members of the Non-Aligned Movement, rebuffing both superpowers. Similarly, many Latin American countries today (like El Salvador, Mexico, and Brazil) prefer to maintain good relations with both Washington and Beijing. Urging them to take sides and reduce all ties with China is unlikely to work and needlessly antagonizes a fellow IDB member (in China) whose cooperation is necessary to combat the climate crisis, one of the most crucial tasks of the IDB.
Specifically, during his campaign for the presidency, Claver-Carone argued that he would further capitalize IDB Invest, the private sector lending group for the bank. This focus on private sector investment, intended to counter the BRI and similar Chinese investments, works to strengthen private enterprise and compete with China even as governments of all stripes in the region cry out for public investment in public health infrastructure and social spending to combat inequality. This strategy would only further entrench inequality and extend the needless suffering of the region’s people to do little more than stick it to another member of the IDB whose cooperation on the principle issue of our time is necessary.
Conclusion
Though the history of American intervention in Latin America and the Caribbean is checkered, previous administrations understood the need for Latin American autonomy as a prerequisite for the multilateral legitimacy of institutions created with the assistance of the U.S. Yet today in the name of America First, the Trump Administration, through the selection of Claver-Carone, has sought to assert American dominance. Yet if this dominance has to be imposed from the top down, by decree rather than consent, it may be vulnerable to organized resistance from within the organization.