IDB may get first woman chief following ouster of Trump nominee

The Inter-American Development Bank, led by men since its establishment 63 years ago, could get its first woman president in the wake of a scandal that forced out Mauricio Claver-Carone, IDB’s Trump-nominated head, late last month.

Claver-Carone, 47, was fired on Sept. 26 following a unanimous vote by the bank’s 14-member executive board, after an independent ethics probe found evidence he had a prior sexual relationship with a senior staffer and gave the woman salary increases exceeding 45% of her base pay in less than a year.

MCC, as the Cuban-American attorney and lobbyist is known, denies all accusations and has threatened to sue the bank for defamation and breach of contract. For now, IDB is being run by its interim president, Reina Irene Mejía Chacón of Honduras, until a replacement is found to serve out Claver-Carone’s term, which expires in 2025.

Two women are said to be leading contenders: Mexico’s Alicia Bárcena, former head of the United Nations’ Economic Commission for Latin America and the Caribbean, and former Costa Rican President Laura Chinchilla.

The 48-member bank, which includes 26 borrowing countries in Latin America and the Caribbean, approved $23.4 billion in financing last year.

Notably, IDB had only four presidents in the 61 years before Claver-Carone took over in 2020: Chile’s Felipe Herrera, who served from 1960 to 1970; Mexico’s Antonio Ortíz Mena, who led the bank from 1970 to 1988; Uruguay’s Enrique Iglesias, from 1988 to 2005; and Colombia’s Luis Alberto Moreno, who was president from 2005 to 2020.

From the outset, the unwritten rule was that the bank be headed by someone from Latin America and not the United States, which controls 30% of its voting shares. In fact, that was among the conditions under which other member states agreed to put the IDB’s headquarters in Washington in the first place.

Once the ethics investigation was underway, Claver-Carone’s ouster “was not difficult to predict,” said regional expert Michael Shifter.

“The most public concern was that he broke with a 60-year tradition that the bank president be from Latin America and not the U.S.,” said Shifter, former president of the Inter-American Dialogue think tank and now a professor of Latin American studies at Georgetown University.

“I think that caused a lot of unhappiness because this was seen as a regional bank,” he told Devex in a phone interview. “In addition, there were concerns about his role in an administration not seen as overly friendly to Latin America — largely because of his very hardline policies on Cuba and, to some extent, Venezuela.”

“Colleagues working at the bank told me that morale was low and that some good people were leaving,” Shifter added.

The Biden administration does not plan on nominating another American to the post, Reuters reported on Sept. 29.

Whoever gets the job will confront some of the region’s most serious economic challenges since IDB’s creation. Among them: Fiscal repercussions of the COVID-19 pandemic that devastated Latin America from early 2020; Venezuela’s ongoing humanitarian crisis, which shows no sign of letting up; worsening political strife and gang violence in Haiti; and the continuing effects of deforestation and climate change-induced natural disasters on the region.

Roberta Jacobson, who served as former President Obama’s deputy assistant secretary of state from 2012 to 2016 and then U.S. ambassador to Mexico from 2016 to 2018, said Claver-Carone’s departure paves the way for a woman to lead the institution for the first time in IDB history.

“This is a crucial time for the bank,” said Jacobson, a senior adviser at DGA/Albright-Stonebridge Group. “The administration has made it pretty clear that the next president should come from the region, as had always been the case before. And I think it would also be very good if a woman were to head the bank. But there will be some serious competition for this job.”

Mexican President Andrés Manuel López Obrador last month announced that he’ll nominate Barcena, 70 — who in early September became Mexico’s ambassador to Chile — for the post. “She is an exceptional woman, very prepared with very good relationships with all governments,” the president said at a Mexico City press conference.

On the other hand, Chinchilla, 63, ruled Costa Rica from 2010 to 2014 as a member of the social-democratic Partido Liberación Nacional, and now co-chairs the Inter-American Dialogue. Two years ago, she aspired for the top spot at IDB before Claver-Carone clinched the nomination, forcing her to withdraw her candidacy.

“The IDB is the region’s most important financing companion and the main source of access to credit and technical assistance, and it must continue to be so,” the former president told Costa Rica News in a July 2020 interview, alluding to the economic meltdown triggered by the COVID-19 pandemic. “This crisis came at a time when countries do not have fiscal space, are highly indebted, and in which access to credit will be essential.”

Chinchilla added that “to guarantee the IDB that we need in the future, it is essential to have people with a vision of effective leadership and far from any politicization.”

Two other candidates — both Central Americans — appear to be in the running as well, reports Latin Trade magazine, though their chances of being selected are slim: Martín Torrijos, ex-president of Panama, and Costa Rica’s Rebeca Grynspan, who since September 2021 has been secretary-general of the Geneva-based UN Conference on Trade and Development, or UNCTAD.

Claver-Carone, telling his side of the story in a Sept. 29 opinion piece for the Wall Street Journal, claims the Biden administration smeared his reputation without any evidence backing up the accusations of improper behavior against him.

Rather, he claimed, his removal was an act of collusion involving the Biden administration, China, and various socialist governments in Latin America including Cuba and Venezuela.

“There should be no mistake: This was a raw political move to replace me with someone more sympathetic to their command and patronage,” Claver-Carone wrote. “Hiding behind an abusive, unprecedented process and misrepresentation of the facts shows this for what it truly is: A corrupt and broken system in desperate need of reform.”

Asked for comment, Shifter said: “It’s true the Biden administration wasn’t very keen about him, but it’s not correct to say they tried to get rid of him. [Claver-Carone] could have easily survived the whole five years had he not completely violated IDB norms and policies — and do it in such a way that was so obvious to others at the bank.”

Shifter added that all previous IDB presidents were former cabinet-level ministers in their respective countries, unlike Claver-Carone, whose background was limited to heading the Latin America division at the National Security Council.

‘Not fit for the job’

The Associated Press reported on a confidential investigative report concluding that Claver-Carone and the staffer he allegedly had an affair with both held top posts at the National Security Council at the time, prompting concerns that the relationship posed a counterintelligence risk.

Mark Feierstein, who at one time held Claver-Carone’s previous National Security Council job in the Obama administration, was more blunt about his perceived lack of experience.

“He was not fit for the job,” Feierstein told Devex on the phone. “The lesson here is obvious: You need someone who’s qualified and who comes from the region that relies on the bank.”

Furthermore, he said, “two years ago, there were plenty of qualified, strong candidates, but they couldn’t agree and therefore we ended up with Trump’s appointee. But now there’s a real opportunity for Latin America to coalesce behind a single person or have two or three good candidates and settle on one of them.”

Feierstein, who like Jacobson is now a senior adviser at DGA/Albright-Stonebridge Group, added that “it’s about time” a woman be chosen to lead the bank.

“I don’t think it’ll be the first qualification the region will look at, but the Biden administration would welcome a woman president of the IDB,” he said, predicting “plenty of backroom negotiations” followed by a consensus on a single candidate. If that doesn’t happen, member states would vote, with each vote weighted according to a given country’s share in IDB.

“Previous bank presidents were people the region looked to for advice, thoughts on economic direction and big thinking about development,” said Feierstein, suggesting that regardless of who’s selected in the end, “It’ll put the bank back at the center of discussion on development for the region, which has not been the case for the last two years.”