Dissatisfaction with IDB president may jeopardize capital injection
A plan to increase the capital of the Inter-American Development Bank (IDB) that could reach $80 billion - also a way to counter the growing presence of China in Latin America - risks taking a long time to take off. This is due to the dissatisfaction in Brazil and several other countries with the institution's current president, Cuban-American Mauricio Claver-Carone, Valor has learned.Mr. Carone took over the bank´s command last October, after the Donald Trump government broke an unwritten rule that gives to Latin American countries rule of the institution. Mr. Carone, former Latin American head of Trump's National Security Council, was elected with the support of the Jair Bolsonaro government, which removed the Brazilian candidate from the dispute.Historically, Brazil has always had an IDB vice-presidency. And the Bolsonaro government had expected that, with Mr. Carone, the country would take the number two position. Mr. Carone, however, has been distributing promises throughout the region and, after he took over, left Brazil with nothing. Economy Minister Paulo Guedes expressed frustration at having been left behind in the IDB dispute recently at an event in São Paulo.Mr. Carone argues that with the capital increase, the bank will be able to expand its ability to provide credit from $12 billion to about $20 billion a year.In March, at the IDB's first large assembly under his direction, the executive managed to pass a resolution authorizing analysis work to "consider a potential capital increase" - but it did not go beyond that, precisely because of the lack of consensus among the countries.The relationship with major countries in the region has not improved since then. According to Latin American sources, Mr. Carone has been "very awkward" in leading with the largest countries in the region and also presented a "very bad" strategy document for the coming years.The most dissatisfied countries, according to the sources, are Brazil, Argentina, Mexico, Chile, Peru and Bolivia, which together have 39% of the voting power in the IDB.However, it is too hasty to conclude that the capital increase will not materialize because some countries do not like the IDB president. First, there are precedents. In the wake of the 2008 global financial crisis, the bank managed to increase its capital by $70 billion, with $1.7 billion actually paid and the rest in the form of callable shares. And the current health crisis has hit the region much harder.Second...
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