Brazil will not support Alberto Fernández’s candidate for president of CAF, the strategic regional bank

Once again, the government of Jair Bolsonaro distance marked with Alberto Fernandez and he took a resolution that harms his geopolitical strategy. Brazilian administration formalized his decision not to accompany the Argentinian candidate, Christian Asinelli, at the head of the Latin American Development Bank (CAF), a competent multilateral financial credit institution. Instead, he will support the Colombian Sergio Diaz-Granados, closer to the ideological profile and the regional Bolsonarist outlook.

The new rudeness of Mercosur’s main trading partners is not surprising. They were waiting for him at Casa Rosada. Consumption of candidate support Diaz-Granados -with official photo included- took place yesterday in Itamaraty, at the headquarters of the Brazilian Chancellery. The Minister of Foreign Affairs, Charles France made this visible when he received a large delegation of emissaries from Colombian President Iván Duque, made up of his chief of staff, Maria paula correa, the Deputy Minister of Adriana Mejía, the Ambassadors Darío Montoya and Andrés Rugeles and the Sergio Diaz-Granados.

The agenda they discussed is linked to the one pressed by the CAF presidency, since issues such as the economic integration of the region and the financing of investment and trade development in South America were discussed. “Brazil and Colombia have common visions on various issues, such as the defense of democracy, human rights, freedom and the free market in the region and in the world,” they shared from Itamaraty. .

After the summit between the two countries, Jair Bolsonaro’s Ministry of Economy was responsible for leaving no doubt about his support for Sergio Díaz-Granados, something that was celebrated on social media late last night by Iván Duque’s chief of staff. Brazil highlighted the Colombian candidate’s “long history of working with Brazilian interests”, “in addition to sharing a range of values ​​and initiatives that Brazil wants to promote at CAF,” the statement said.

“Among the lines of action proposed by Brazil, and fully supported by Díaz-Granados, they underline the substantial strengthening of operations with the private sector; improvement and modernization of the entity’s governance system; and a series of actions aimed at leading CAF towards greater transparency in its operations and in its relations with shareholders and entities in general, ”he concluded.

Brazil’s confirmation specifies the framework for the alliances of the government of Alberto Fernández in its struggle for regional leadership. CAF is made up of 19 countries and 13 private banks. The member countries are Argentina, Barbados, Bolivia, Brazil, Colombia, Chile, Costa Rica, Ecuador, Spain, Jamaica, Mexico, Panama, Paraguay, Peru, Portugal, the Dominican Republic, Trinidad and Tobago, Uruguay and Venezuela.

Each support weighs differently within the body to designate the future executive president. Since its origins in 1968, the Andean region has had preeminence in CAF: Bolivia, Ecuador, Colombia, Peru and Venezuela add with double vote.

From this group, Alberto Fernández already has the accompaniment of Luis Arce (Bolivia) and Nicolás Maduro (Venezuela). Ecuador and Peru approved the nomination of Sergio Diaz-GranadosBut in the Peruvian case, it happened before Pedro Castillo, who is part of the ideological spectrum of the Frente de Todos, was imposed in the presidential elections. Talks are open and there have been requests for consultations with Peruvian diplomacy. Even if a turnaround cannot be ruled out after the political change which continues to be pursued, the outgoing management of Lima would only take place on July 28, after the CAF elections.

From Europe, the Spanish president Pedro Sanchez and portuguese Antonio Costa would be more likely to the candidate of Alberto Fernández. Foreign relations with the two nations have strengthened after the presidential tour in Madrid and Lisbon. However, they have a 4% stake in the body.

Alberto Fernández proposed for the presidency of CAF a man of confidence, Asinelli, former legislator of Buenos Aires, leader of Buenos Aires PJ and close to the secretary for Strategic Affairs, Gustavo Beliz. After the unsuccessful competition for the headliner of the Inter-American Development Bank (IDB), which was then appropriated by the government of Donald Trump, the bet is to lead another regional funding body. To do this, he will have to collect 10 votes, but the outcome remains uncertain.

The offer in the CAF exposes Argentina’s growing distance from its Mercosur partners, during the design of a common strategy of insertion into the world market. Uruguay and Paraguay, with an idiosyncratic openness to the free market, they have not yet announced what position they will take, but the recent record of diplomatic relations does not bode well after several disagreements with the administration of Alberto Fernández. They should support Díaz-Granados for his engagement in Colombia.

To get hold of the bank, Asinelli will influence for five years a portfolio of loans and investments of $ 28,000 million. The approach is ambitious, because it would be the first time that a country that is not one of the founders of CAF would be part of the management of the organization.

The Argentinian candidate knows the intricacies of this financial entity. He is an expert of the system: Asinelli worked four years with Enrique García, the predecessor of the Peruvian Luis Carranza. His doctoral thesis at the University of San Martín (UNSAM) is an investigation on the subject, entitled “The Multilateral Bank in Latin America: Patron or Partner in Regional Development? “.

According to this work, the destination of CAF financing depends on the ideological orientation of the debtors. In other words, countries whose governments have a “pro-state orientation will tend to take investment credits, while those with a pro-market tendency will prefer adjustment credits,” says his hypothesis.

Díaz Granados cultivates a more political profile than his suitor. A lawyer by profession of the Externado de Colombia University, he was Minister of Commerce, Industry and Tourism between 2010 and 2013 during the tenure of President Juan Manuel Santos. He is currently managing director of the Inter-American Development Bank (IDB) for Colombia and Peru.

The Latin American Development Bank is generally not the center of attention in the Southern Cone due to its Andean DNA. However, this process of renewal of authorities is going through a curious upheaval and a set of movements throughout the region.

It all started when the Peruvian Luis Carranza tendered his resignation over allegations of workplace harassment. Since then, CAF has been in the hands of a trainee. When the vacancy for the elections opened, Colombia appointed the then Minister of Finance, Alberto Carrasquilla placeholder image, but finally one day after the closing of the presentation of the candidatures he recanted and proposed Diaz-Granados. The appointment of Christian Asinelli was also on the thread. July 5 will be the day of the internal elections.

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