U.S.-IADB: A Last-Ditch Effort at Securing U.S. Hegemony?

By Christy Thornton*

The Inter-American Development Bank building in Washington, DC
The Inter-American Development Bank in Washington, DC./ Wally Gobetz/ Flickr/ Creative Commons License

The election this month of Cuban-American hardliner and Trump National Security Council staffer Mauricio Claver-Carone to head the Inter-American Development Bank (IADB) signals a significant shift in Washington’s approach toward the multilateral institution, but Trump’s attempt to reassert U.S. strength through the bank may, paradoxically, be a sign of weakness. Claver-Carone was the first U.S. candidate put forward to head the Bank in its 60-year history, overturning an unwritten rule that the president of the Bank should be a Latin American. After a long summer of procedural maneuvering failed to delay or block the contest, other potential candidates from Argentina and Costa Rica withdrew.

  • Mexico’s decision in August to go along with the election cleared the way for the quorum necessary to hold the vote, and Claver-Carone won election despite fully one-third of member countries abstaining.

As I show in my forthcoming book, Revolution in Development, U.S. administrations since FDR have often responded to Latin American demands for representation in and redistribution through multilateral organizations by ceding procedural power to Latin Americans.  

  • In earlier eras – during the negotiations over the first Inter-American Bank in 1939‑40, the Bretton Woods institutions in 1944, and then the founding of the IABD in 1959 – Latin Americans demanded a seat at the table and decision-making power. U.S. leaders acquiesced, preferring to lead through consent rather than coercion. When the IADB was created, the United States agreed to a minority-share position and a concessional lending program, allowing it to both meet Latin American demands for development and also counter accusations of commercial and financial domination.
  • While the bank’s tenure has not been without controversy, the major congruence in economic policy prescriptions that emerged with the Washington Consensus in the 1990s meant that, even without its representative in the top spot, the United States could be assured that its interests in the region were furthered by bank activities.

The election of Claver-Carone represents an about-face in this strategy of securing consent and reinforces three aspects of Trump’s approach to the region: isolating left-wing governments like Venezuela; countering China’s growing influence; and reiterating the primacy of private enterprise and investment over public multilateral lending.

  • The very public dispute over who should represent Venezuela at the 2019 IADB meeting in Chengdu – which was to celebrate the 60th anniversary of the bank’s founding and the 10th anniversary of China’s membership – challenged U.S. influence over the institution. The Venezuelan opposition under Juan Guaidó wanted to send Ricardo Hausmann, a longtime IADB official, as its representative, but the Chinese government suggested instead that no Venezuelan representative be seated, leading to the meeting’s sudden cancelation. China’s action seems to have convinced Trump that the IADB was slipping from the U.S. orbit.
  • Seeing China as a competitor in Latin America, Claver-Carone will seek to use the IADB to counter Chinese influence. The most important way that he seeks to do that, made explicit during his campaign for the bank presidency, is through further capitalization of IDB Invest, the bank’s private-sector lending arm. This emphasis on private-sector development comes despite the fact that governments throughout the region are struggling through the worst economic downturn in decades due to the ravages of the coronavirus, with insufficient public health infrastructure and little in the way of safety nets for working people. While the bank has announced more than $3 billion in additional funding for governments to mitigate the crisis, Claver-Carone has stressed that his emphasis will be, above all, on strengthening private enterprise.

Earlier administrations demonstrated their faith in the strength of U.S. influence in the region through ceding some procedural control in the IADB, thereby securing multilateral legitimacy – but the Trump Administration’s successful push for Claver-Carone is instead an attempt to assert U.S. dominance. While Trump’s “America First” approach to the bank might seem like an attempt to bolster U.S. strength, it may instead actually reveal a fundamental weakness in U.S. legitimacy in the hemisphere. If the U.S. hegemony has to be imposed from the top down through domination rather than consent, it is sure to engender resistance.

September 30, 2020

* Christy Thornton is an assistant professor of sociology and core faculty member for the Latin America in a Globalizing World Initiative at Johns Hopkins University.

U.S.- Latin America: Policy Shifts Ahead?

By Fulton Armstrong

Former White House National Security Adviser John Bolton speaks to reporters on events occurring in Venezuela Tuesday, April 30, 2019, outside the West Wing entrance of the White House.

Former National Security Advisor John Bolton speaks to reporters on Venezuela in April 2019/ Tia Dufour/ White House/ Wikimedia Commons

The sudden departure of President Trump’s outspoken national security advisor, John Bolton, is unlikely to result in changes in U.S. policy objectives in Latin America but could lead to the same sort of swings in tactics – harder or softer – that characterize other U.S. policies around the world. The continued weakness of the State Department’s input, aggravated by erratic staffing in its Latin America offices, further suggests that it will not play a balancing role.

Trump and Bolton’s statements over their 17 months together indicated no disagreement on objectives and tactics in Latin America, including immigration, close relations with Brazilian President Bolsonaro, efforts to rescue the Argentine economy, and Venezuela. They had identical positions on the waves of sanctions against Venezuela, U.S. commitment to remove President Nicolás Maduro, and unstinting support for National Assembly President Juan Guaidó’s claim to the Presidency, including backing Guaidó’s flopped coup in April. They both also explicitly linked taking down Maduro with achieving regime change in Cuba.

  • Trump and U.S. Senator Marco Rubio, widely seen as his top referent on Latin America and related political matters, are trying to signal that after Bolton’s departure the Administration is going to turn up the heat on Venezuela and Cuba. In apparently coordinated tweets between them, Trump said, “In fact, my views on Venezuela, and especially Cuba, were far stronger than those of John Bolton. He was holding me back!” This complements rumors that Trump has been frustrated that Bolton’s strategy in Venezuela, particularly the fact that Maduro supporters had tricked him into false confidence in Guaidó’s failed coup, has not removed Maduro from office. (It is unclear if one of his concerns is that U.S. sanctions are worsening the refugee flow challenging neighboring countries.)

Most Washington-based observers believe, however, that Latin America is the least important of the five issues that, according to press, caused friction between Trump and Bolton. The President’s personal involvement has been much greater with North Korean leader Kim Jong Un, in efforts to achieve regime change in Iran, in talks with the Taliban for withdrawal of U.S. troops from Afghanistan, and in maintaining good relations with Moscow despite the complex situation in Ukraine.

  • Trump has appeared to lack deep interest in Latin America policy and sees it as primarily a domestic political tool for consolidating his base – among anti-Maduro and anti-Cuba voters in Florida, an important state in his re-election calculus, and among supporters for his wall on the Mexico border and other anti-migration measures. Long ago he essentially handed the Venezuela and Cuba issues over to Senator Rubio, and the National Security Council brought a Rubio ally, lobbyist, and blogger, Mauricio Claver-Carone, to the White House to work the issue. They appointed Elliot Abrams, despite baggage from the Iran-Contra era and the Bush-Cheney Administration, to handle diplomatic operations on Venezuela for them.
  • By all appearances, Secretary of State Michael Pompeo has subordinated his own Latin America team to the White House operators, essentially stifling a traditionally important voice at the policy table. When Assistant Secretary Kimberly Breier resigned last month, only nine months after being confirmed by the U.S. Senate, she said it was to spend more time with her family, but her bureau’s marginalization left questions about her policy impact. Her acting successor, veteran State Department lawyer Michael Kozak, who has spent much of the last 10 years managing “democracy promotion” programs in Latin America and elsewhere, is not likely to challenge Rubio and Claver-Carone unless Pompeo takes the lead, which he shows no sign of doing.

The new national security advisor will have more urgent problems to deal with than wrestling with Rubio, Claver-Carone, and their allies. Indeed, Trump may even give them a green light to escalate provocations even further. For example, Administration allegations that Colombian guerrillas and narcotics-traffickers receive crucial aid from Caracas – buttressed by invocation of the Rio Treaty last week – are logical ways of laying the political groundwork for some sort of military action, perhaps jointly with Colombia, against alleged camps in hopes that the Venezuelan military finally tells Maduro that it’s time to go. 

  • President Trump’s trademark approach to thorny problems has been unpredictability and experimentation with wide-ranging alternatives, including face-to-face negotiations and deal-making with opponents that pose much tougher challenges to U.S. interests than do Venezuela and Cuba. Such flexibility notwithstanding, with the U.S. elections just 14 months off, Trump’s electoral calculus strongly suggests he’s going to stay the course with policies toward Latin America that he’s told are popular in South Florida.

September 17, 2019