Latin America Bank Candidate Seeks to Bridge Left-Right Gap
(Bloomberg) -- Costa Rica’s former president is pitching herself as a middle-road alternative to overcome an increasingly bitter political dispute for the helm of Latin America’s most important development bank.
Laura Chinchilla is seeking to head the Inter-American Development Bank, which lends more than $10 billion per year to fund social and infrastructure programs in the region. The bank, seen as key to finance Latin America’s recovery from the coronavirus pandemic, finds itself in the midst of a heated leadership succession contest.
In June, U.S. President Donald Trump nominated his adviser Mauricio Claver-Carone for the IDB’s top job, replacing president Luis Alberto Moreno, who leaves in a month.
The move deepened regional fissures as it would break a six-decade tradition of Latin American leadership at the bank. While Claver-Carone appears as the front-runner after securing the support of more than a dozen countries including Brazil and Colombia, Argentina is promoting Gustavo Beliz, an adviser to leftist President Alberto Fernandez, with the backing of Mexico.
Amid criticism from politicians and former diplomats in the region, Argentina and Mexico have called for a delay in the election scheduled for Sept. 12, citing the inability of the IDB’s members to meet in person due to the pandemic. Electing Claver-Carone next month could also leave the bank out of step with a potential Democratic administration in the U.S., should Trump be defeated in November.
Chinchilla, the first woman to be elected president of Costa Rica, is considered a long-shot at the moment, given that the IDB’s biggest shareholders are backing other candidates. Yet she is pitching herself as a diplomat who will be able to get along with everyone and work in a bipartisan way in Washington to begin the years-long process of winning approval to increase the bank’s capital.
“I offer a type of leadership that isn’t polarizing,” Chinchilla, 61, said in an interview on Wednesday. “We need to build bridges.”
Chinchilla won’t say whether she thinks the September vote should be postponed despite Costa Rica having joined the countries calling for a delay. Among other changes, she proposes making the bank more prescriptive and recommending best policies for the region, a role more aking that of the Organization for Economic Cooperation and Development.
Chinchilla led Costa Rica from 2010 to 2014 and enjoyed some successes, with the country winning its first investment-grade credit rating, growth averaging more than 4% after the 2009 global financial crisis and inflation slowing. Her government also improved security, with the homicide rate falling.
But her administration was rocked by a series of corruption scandals involving her cabinet, and though Chinchilla herself wasn’t accused of wrongdoing, her popularity was among the lowest for Latin American leaders by the time she left office. She was able to get a reform to contain the nation’s budget deficit approved in congress, but the supreme court later struck it down. Chinchilla was term-limited, and her National Liberation Party lost the 2014 presidential election.
Since leaving office, she has been a professor at Georgetown University, Monterrey Institute of Technology in Mexico and at the University of Sao Paulo in Brazil. She has also worked on projects with the IDB and U.S. Agency for International Development.
While Claver-Carone said that he would build the IDB into a financial heavyweight to counter China’s influence in the Western Hemisphere, Chinchilla said that the bank shouldn’t be taking sides in the growing conflict between the Asian giant and the U.S.
Costa Rica, a nation of just 5 million people best known for its beach, volcano and rain forest eco tourism, is also Latin America’s oldest continuous democracy in a region with a history of coups and dictatorships.
Chinchilla said that as IDB head she also would prioritize sustainable development and strategies to deal with climate change and organized crime, which she included among the biggest challenges facing the region. She touts her management skills and experience as an executive leading a nation.
On the subject of Venezuela, one of the most divisive in Latin America, she said that its president, Nicolas Maduro, should allow for free elections, calling his government a dictatorship. The representative of opposition leader Juan Guaido was recognized last year as Venezuela’s rightful representative at the IDB. Claver-Carone led the U.S.’s diplomatic effort to win international recognition for Guaido.
“The bank is going to play a key role in the reconstruction that Venezuela is going to need,” Chinchilla said. “We shouldn’t let Venezuela divide us at the bank, because there are many other things in the region that shouldn’t depend on ideology.”
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