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ECONOMY | 15-11-2022 20:15

Brazil Central Bank veteran wants to curb politics at the IDB

Ilan Goldfajn says Inter-American Development Bank said the institution needs to overcome the region’s historic left-right political conflicts to address challenges from poverty to climate change.

The Brazilian former Central Bank chief vying to lead the top development lender for Latin America said the institution needs to overcome the region’s historic left-right political conflicts to address challenges from poverty to climate change.

Ilan Goldfajn has an extensive career in both the public and private sector to draw on as he seeks to lead the Inter-American Development Bank. The International Monetary Fund’s Western Hemisphere director is on his second stint at the lender after working on the Asia crisis of the late 1990s. His resume also includes time as chief economist of Itau Unibanco Holding SA and chairman of Credit Suisse Group AG in Brazil.

But his nomination has been scrutinised because its comes from the government of right-wing president Jair Bolsonaro, who leaves office in six weeks. Members of leftist President-elect Luiz Inácio Lula da Silva’s transition team sought unsuccessfully to delay the IDB vote until January so the incoming leader could have a say regarding Brazil’s candidate and vote.

Goldfajn, 56, said that he’s never been a member of a political party and promises that if elected on Sunday, projects and lending will be driven by data, evidence and performance evaluation.

“The IDB should be less ideological, more technical, more looking at development impact,” Goldfajn said in an interview on Monday in Washington. “Choosing someone like me would send the right signal to the region” about placing experience and ability above politics, he said.

The IDB is a key financial institution for Latin American and the Caribbean, lending more than US$23 billion last year, and the bank’s presidency is one of the region’s most coveted jobs. The election comes after a turbulent era for the bank. In September, nations removed President Mauricio Claver-Carone after a probe found that he probably broke ethics rules in a romantic relationship with a top aide.

US President Donald Trump in 2020 nominated Claver-Carone, a foreign-policy adviser and architect of a hard-line approach to the socialist government in Venezuela, to be the first American chief in the bank’s six-decade history. He made the push despite opposition from Argentina, Mexico and many Democrats. The opportunity arose in part because the region failed to field candidates acceptable to the United States or coalesce behind anyone amid left-right squabbling.

He says that if elected, his priorities for the IDB are clear: fight inequality and improve the production and supply of food for the region; build nations’ resilience to environmental shocks and help fossil-fuel producers responsibly transition to renewable fuels; invest in physical and digital infrastructure to attract private capital and innovation.

“People always advise me not to tell the priorities, because in a campaign, when you tell priorities, people always say ‘Why don’t you say X or Y?’” Goldfajn said. “But when you’re in management, if you don’t choose priorities for the budget, what you’re going to do, where you’re going to go – you’re not going to do anything. And my impression today is that there are too many priorities at the bank. When everything is a ‘priority,’ nothing is a priority.”

Goldfajn earned a doctorate in economics from the Massachusetts Institute of Technology, where Stanley Fischer, the former vice-chairman of the Federal Reserve and number two official at the IMF, was his adviser. Goldfajn is on leave from the IMF while he pursues the IDB position, and made clear in the interview that his comments represent his own opinions and not those of the Fund.

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