Latin America Bank Picks Brazil’s Goldfajn as Next President

Eric Martin
·4 min read
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(Bloomberg) -- Governments from Latin America, the Caribbean and the US chose Ilan Goldfajn to be the next head of the Inter-American Development Bank, making him the first Brazilian to win one of the region’s most coveted jobs at a key financial institution.

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Goldfajn, 56, the current Western Hemisphere director of the International Monetary Fund, was elected for a five-year term during a meeting Sunday of finance ministers and other officials of member nations, with most participating virtually from capitals across the Americas, the IDB said in a statement.

The vote came after Argentina withdrew its candidate and threw its support behind Goldfajn, according to people familiar with the proceedings, who asked not to be identified because the discussions were private.

An Argentine official said that the nation worked out a deal with fellow bank members to have Argentines in several high-ranking positions at the bank, including one of its vice presidents and leading an institute focused on gender and equality, and negotiated behind the scenes with the US, Canada and Brazil to give Goldfajn the majority.

Goldfajn received 80% of the vote, compared with 9.9% for Chile’s Nicolas Eyzaguirre, 8.2% for Mexico’s Gerardo Esquivel and 1.6% for Gerard Johnson who was nominated by Trinidad and Tobago, according to the people. Goldfajn also received backing from 17 governments, more than the 15 needed to win, out of a group of 28 nations that includes the bank’s regional borrowers plus the US and Canada.

International financial organizations such as the IDB seek to operate by consensus. Support by President Joe Biden’s administration was critical, with the US controlling 30% of the bank’s voting shares, almost triple the amount of second-place Brazil and Argentina. The five candidates interviewed for the job with representatives of the IDB’s member governments, giving presentations and answering questions, one week ago.

Mexican President Andres Manuel Lopez Obrador criticized the election at his morning news conference on Monday, calling it “regrettable” and “more of the same.”

He said that the IDB is continuing to operate as it did in prior decades, with nations in Latin America picking a candidate who pleases the US. Lopez Obrador’s nominee, Esquivel, received support from just two other countries in the region, Mexico’s finance ministry said in a statement Sunday night.

The IDB is an important lender for the region, with nations borrowing more than $23 billion last year. It was key to the response to the global pandemic, when Latin America was one of the hardest-hit regions.

The election turns the page on a turbulent era for the bank, with nations in September removing President Mauricio Claver-Carone after a probe found that he probably broke ethics rules in a romantic relationship with a top aide.

Goldfajn, a former Brazilian central bank chief whose resume also includes time as chief economist of Itau Unibanco Holding SA and chairman of Credit Suisse Group AG in Brazil, takes office in mid-December. He’ll be the seventh president for the bank founded in 1959, with past longtime chiefs coming from Colombia, Uruguay, Mexico and Chile.

His election is a return to Latin American leadership after then-President Donald Trump’s unprecedented move in 2020 to position a US candidate -- Claver-Carone -- to lead the institution despite opposition from Argentina, Mexico and many Democrats.

Goldfajn’s nomination was scrutinized because it came from the government of right-wing President Jair Bolsonaro, who leaves office in six weeks. Members of leftist President-elect Luiz Inacio Lula da Silva’s transition team had sought to delay the IDB vote until January so the incoming leader could have a say on Brazil’s candidate and vote.

In an interview last week, Goldfajn said he’s an apolitical, data-driven economist who can help the IDB overcome the region’s historic left-right political conflicts. His priorities will be fighting inequality and food insecurity; building nations’ resilience to climate change shocks and helping fossil-fuel producers responsibly transition to renewable fuels; and investing in physical and digital infrastructure.

Read more: Brazil Central Bank Vet Wants to Curb Politics Role at IDB

(Updates with Mexican president’s comment in seventh paragraph.)

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