Claver-Carone ousted

IDB’s president removed over an inappropriate relationship, what’s next for the bank?

On 26 September, the governors of the Inter-American Development Bank (“IDB”) voted to remove Mauricio Claver-Carone from the presidency of the institution for allegedly having an intimate relationship with a subordinate. More specifically, an independent investigation carried out by the law firm Davis Polk reported that Claver-Carone gave preferential treatment to his subordinate which included salary increases of more than 45%.

Claver-Carone, who was nominated by the former US President Donald Trump, accused President Joe Biden’s administration of orchestrating a political vendetta to replace him with a friendlier candidate. He also accused China and the “socialist governments of Latin America” of wanting to oust him to advance their own political agenda within the IDB.

The bank’s executive vice-president, Reina Irene Mejía, from Honduras, has assumed the interim presidency of the IDB. Mejía previously served as director general and head of corporate and investment banking at Citibank Honduras, where she spent 25 years of her professional career.

IDB members have 45 days to present a candidate, if they wish to do so. Biden’s Administration said they would not nominate a US candidate. The successful candidate is likely to be a woman after several influential member states have declared a strong preference for a female candidate. This would be the first female president of the IDB.

President of Mexico Andrés Manuel López Obrador announced last Thursday that he would nominate Alicia Barcena, former executive secretary of the UN’s Economic Commission for Latin America and the Caribbean (“ECLAC”) and current Mexican ambassador to Chile.

Another potential candidates include Rebeca Grynspan, Secretary General of the United Nations Conference on Trade and Development and a former vice president of Costa Rica.

Finally, the lead candidate appears to be Laura Chinchilla, a Costa Rican politician who was President of Costa Rica from 2010 to 2014. According to a former diplomat at the Organisation of American States, “There are two main candidates, Barcenas from Mexico, who used to work at CEPAL and Laura Chinchilla from Costa Rica. To be honest we all think Chinchilla all the way!” A former IDB official confirmed, “Chinchilla has been a long-time favourite for president of the IDB, even before Trump imposed his wish for Mauricio Claver-Carone.”

“There are two main candidates, Barcenas from Mexico, who used to work at CEPAL and Laura Chinchilla from Costa Rica. To be honest we all think Chinchilla all the way!”

Former diplomat at the Organisation of American States

Despite this apparent popularity, Chinchilla was voted Latin America’s least favourite president in 2013 with an approval rating of just 13%, according to a survey by the Mexican opinion poll firm Consulta Mitofsky.

“the Bank [IDB] has to become a reference of good practices and lessons learned. It has to be a kind of OECD for middle-income countries that cannot access it.”

Laura Chincilla, candidate for president of the IDB

And what could we expect from a Chincilla presidency? In an interview for El Pais in 2020, Chinchilla said, “The Bank [IDB] has to become a reference of good practices and lessons learned. It has to be a kind of OECD for middle-income countries that cannot access it. And the other thing we have to do is to ensure that the resources that are often very much contained in Washington go to the field: to be much closer to the countries and accompany them, that policies are not stiff, copy-paste… Latin America is a mosaic of very different realities and the strategies must also be very different.”

IDB is formed by 26 member states and its main partners are US, with 30% of the voting rights; Brazil, 11.35%; Argentina, 11.35%; and Mexico, 7.3%. Candidates need to obtain an absolute majority in terms of voting rights as well as in country votes.

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