Interference with the IDB

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Donald Trump, president of the United States, has once again taught an unpleasant lesson in inappropriateness by proposing as a candidate for the presidency of the Inter-American Development Bank (IDB) the American of Cuban origin Mauricio Claver-Carone. The IDB has been governed during its sixty years of life by Latin American executives, as a sign of the balance that the institution wanted to achieve between its financial character and its social functions, essential for development in the continent. It is not a question of history or precedent; it is about the IDB serving a democratic and social purpose. And for that purpose it is essential that the institution is not polarized in political or ideological terms.

Steven Mnuchin, Secretary of the Treasury, says that Latin America is in a delicate situation and that its national economies need to face considerable challenges. But the worst way to face these challenges today is to impose an American candidate, subject, as the precedents reflect, to the whims and arbitrariness of an Administration incapable of developing basic concepts for the proper functioning of the world economy, such as the freedom of trade, interregional agreements or development factors that go a little beyond his paleoliberal conception of the economy. Claver-Carone opens a gap of political mistrust in a bank that has been decisive in sustaining development in the region and in alleviating rampant poverty in some of them.

The inconvenience becomes excruciating when it is realized that the Covid-19 epidemic is going to cause enormous damage to the economies of the region. IMF projections estimate GDP falls of more than 10% in some countries, with the aggravating factor that their institutional structure quickly transforms the recession into acute poverty. The recovery of the Latin American economies, heavily affected by debt and without their own investment resources, will require a sharp economic effort to sustain the business fabric and employment. What is least needed is a return to a poverty-generating palaeoliberalism, acting through an institution that is more than a bank.

Washington has taken advantage of the weakness of the Latin American governments to program an intervention that arouses only mistrust. Europe must oppose this coup and play the rationality card. Because if the exit from the crisis in Latin America is not managed with social spending and productive investment, and the exit made in Trump is resorted to, we may be before the prolegomena of another global financial convulsion. Or, at least, we will be feeding its causes.

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