IDB elects Ilan Goldfajn as new bank president

The former president of the Central Bank of Brazil, Ilan Goldfajn, was elected this Sunday (20) as the new president of the IDB (Inter-American Development Bank). He will be the first Brazilian to command the institution, which finances development projects on the continent and is headquartered in Washington.

President of the Central Bank between 2016 and 2019, appointed by Michel Temer (MDB), Goldfajn is now director of the Western Hemisphere at the IMF (International Monetary Fund), a position from which he left to run for election at the IDB.

He was running against four other candidates: Argentina’s Cecilia Todesca Bocco, secretary of International Economic Relations at the country’s chancellery; Mexican Gerardo Esquivel, one of the directors of the country’s Central Bank; Chilean Nicolás Eyzaguirre, former Minister of Economy; and Gerard Johnson of Trinidad and Tobago, a former IDB official.

The Brazilian’s election was facilitated after the Alberto Fernández government gave up Todesca Bocco’s candidacy in the final stretch and decided to support Goldfajn, who already had support from the United States.

As the USA, Brazil and Argentina hold most of the bank’s shares (30% for the former, 11.4% for each of the latter two), the path has been opened for the Brazilian. Already in the first round of voting, he got 80% of the votes.

Goldfajn was nominated by the Minister of Economy, Paulo Guedes, who made a tour with authorities from the continent in Washington last month, during the annual meetings of the IMF and the World Bank, in an attempt to gather support for the Brazilian. Candidates were questioned on the last day 12, and Goldfajn was the one that caused the best impression among the competitors.

The candidacy was threatened, however, when Jair Bolsonaro (PL) lost the Brazilian presidential election. This is because the PT, the party of president-elect Luiz Inácio Lula da Silva, worked to postpone the election of the IDB and sign a name other than the one nominated by Bolsonaro.

Former PT Minister of Finance Guido Mantega even sent an email to the US Treasury Secretary, Janet Yellen, asking that the election be postponed for 45 to 60 days. The election, however, was not postponed, but Goldfajn’s choice was threatened, since authorities do not want to alienate the next president of Brazil. On Thursday, however, Mantega resigned from his position on the Lula government’s transition team, which again gave the former Central Bank president traction at the IDB.

As reported by the SheetGoldfajn’s priorities presented in the bank’s selection process were in line with Lula’s and included combating hunger, promoting cooperation between countries, fostering growth with social inclusion, diversity and environmental preservation.

In theory, the nationality of the body’s president does not matter, because projects financed by the IDB follow technical criteria. In practice, however, the presence of a Brazilian would make it easier for pilot projects to be tested in Brazil, for example.

Founded 63 years ago, the IDB is considered the largest and oldest multilateral financial organization in the world and finances economic, social and institutional development projects in Latin America and the Caribbean. It has 48 member countries and headquarters in Washington (USA).

In November 2022, almost US$ 30 billion (R$ 160 billion) were foreseen by the IDB for projects being prepared or implemented in Brazil. Among them, programs to boost bioeconomy businesses in the Amazon, expansion of education in Florianópolis (SC), road investments in the state of São Paulo, sustainable livestock in Mato Grosso, in addition to a series of federal actions.

This Sunday’s election puts an end to a troubled period that began with the election of the American Mauricio Claver-Carone to the post in 2020, but who was unanimously removed in September, accused of getting involved with a subordinate.

In the year the American was elected, there was a strong willingness for the countries that make up the bank to elect a Brazilian. A number of names were discussed, such as Marcos Troyjo (now on the Brics bench); Rodrigo Xavier; Carlos da Costa (former BNDES) and Martha Seillier (former secretary of the Partnerships and Investments Program), but without success.

Brazil withdrew from placing a nominee after a direct request from then-US President Donald Trump to Jair Bolsonaro for the country to support Claver-Carone, then director of affairs for the Western Hemisphere at the White House National Security Council. The American’s troubled tenure, however, came to an end before he completed his five-year term.

In a recent interview with SheetClaver-Carone, disaffected by Paulo Guedes, stated that the country had made a bad choice in supporting his dismissal and that it would now not find support to elect a proper name.

IDB (Inter-American Development Bank)

• Founded in 1959
• Its resources come from its 48 member countries and funding from financial markets, among other sources.
• Voting power is proportional to the capital subscribed by the country
• The USA is the country with the highest voting power in the institution, 30%,
• Brazil and Argentina have 11.4% both
• Each member country appoints a governor, usually the Minister of Finance or Economy

member countries

Germany, Argentina, Austria, Bahamas, Barbados, Belgium, Belize, Bolivia, Brazil, Canada, Chile, China, Colombia, Costa Rica, Croatia, Denmark, El Salvador, Ecuador, Slovenia, Spain, United States, Finland, France, Guatemala , Guyana, Haiti, Honduras, Israel, Italy, Jamaica, Japan, Mexico, Nicaragua, Norway, Netherlands, Panama, Paraguay, Peru, Portugal, United Kingdom, Republic of Korea, Dominican Republic, Sweden, Switzerland, Suriname, Trinidad and Tobago, Uruguay and Venezuela

IDB President

• Elected by the Board of Governors
• Responsible for day-to-day running
• Does not vote in Executive Board sessions, except in the case of a tie

Source: IDB (Inter-American Development Bank)