Thursday, December 1, 2022

IDB seeks to leave the Claver-Carone era behind with the election of a new president

Five Latin American candidates are competing this Sunday for the presidency of the Inter-American Development Bank (IDB) with a common objective, to restore the institution’s prestige, damaged by its previous president, Mauricio Claver-Carone.

Without a candidate starting as a favourite, those proposed by Mexico, Chile, Brazil, Argentina and Trinidad and Tobago will be submitted to the scrutiny of the Board of Governors, made up of the 48 economy ministers and other economic authorities from the countries that make up the IDB. .

The candidates are Ilan Goldfajn, former governor of the Central Bank of Brazil and until now head of the Western Hemisphere Department of the International Monetary Fund (IMF); the former Minister of Finance and Education of Chile Nicolás Eyzaguirre and Gerardo Esquivel, deputy governor of the Bank of Mexico (Banxico).

The list is completed by Cecilia Todesca from Argentina, who was deputy chief of staff and, from Trinidad and Tobago, Gerard Johnson, a former IDB official who now works as a consultant to the Jamaican Ministry of Finance.

To be the winner, one of them must obtain a majority of the vote of the member countries, whose power varies according to the number of shares owned by each member of the IDB’s ordinary capital. The United States has the highest voting capacity, 30%, followed by Argentina and Brazil with 11.3% and Mexico, with 7.2%.

In addition, it must also have the support of at least 15 of the 28 countries in the region.

According to the regulations for the election of the bank, if during the first voting session no candidate receives the established majority of votes, successive sessions will be held.

Thus, the first vote will be repeated and, if there is no winner in the second round, a third will be repeated with the three candidates with the highest number of votes. If it is not achieved either, there will be a fourth ballot with the two candidates that obtain the most votes.

Even so, a scenario could come true, that neither of the two final candidates achieved the indicated majority in the fourth ballot.

In this case, the president of the Board of Governors (Honduran Queen Irene Mejía, Claver-Carone’s substitute) will determine, in consultation with its members, the procedures that must be followed subsequently.

The winner, who is elected for a five-year term (and with the possibility of being re-elected once), will replace the Cuban-American Mauricio Claver-Carone, who was expelled from the institution after an investigation showed that he had had a love affair with a subordinate, whose salary was raised several times.

Leaving this matter behind and recovering the prestige of the development bank is therefore one of the main objectives of the candidates, as they have explained in recent days at various events in which they have participated presenting their candidacy.

“What we have to do is, first of all, rebuild trust and I believe that this has to happen through dialogue and respect,” said Gerardo Esquivel, the candidate presented by Mexico in a virtual forum organized by the Center for Global Development.

At the same event, the Brazilian candidate, Ilan Goldfajn, indicated that what is most necessary is to make the IDB “return to being the most important multilateral institution in the region” and for this “strong leadership” is necessary, at a time when that “morale is low” in the institution.

The IDB is the main source of financing for the development of Latin America and the Caribbean and offers loans, grants and technical assistance to the countries. Of the total 48 members, 26 of them are borrowers.

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