Sergio Díaz-Granados (Santa Marta, Colombia, 53 years old) has visited 14 countries in 120 days. Since he took office as president of CAF-Development Bank of Latin America on September 1, he has met with presidents and ministers in search of a consensus in an increasingly polarized region. His efforts crystallized last December with the agreement of all the members to achieve the largest capitalization of the bank since its birth in 1968. A capital increase of 7,000 million dollars, which is now the basis on which Díaz-Granados wants to build his mandate for the next five years. With the emphasis on the fight against climate change, the president exposes from his office in Panama the challenges of the region.
Ask. How have these first few months been?
Answer. Despite the pandemic, I have already had the opportunity to visit 14 countries in Latin America and the Caribbean, Spain and Italy. There have been dialogues with economic teams throughout the region to have a direct view and try to forge a consensus. The first fruit of this work was the support, in December, for CAF’s capitalization, the largest in the bank’s history. In a context of crisis, of fiscal tightening, there is a great commitment from the countries to strengthen the bank and to work to support the way out of the crisis.
P. It was a capital increase of 7,000 million. How was it achieved?
R. This bank was born in 1968 in a context of crisis. At the most difficult moment the situation in Latin America was when we bet the most on multilateral organizations to help the recovery. It made sense to make this bet now because we were entering a phase in which the bank was not going to be able to grow in the coming years. We know that we have a great challenge ahead of us, that’s why we had to make the effort. The analysis was well understood by all countries.
P. What topics do you want to promote?
He knows in depth all the sides of the coin.
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R.The first big bet is for CAF to become a factor that helps meet the Glasgow goals, where all partners signed a commitment to reduce greenhouse gas emissions by 2030. By 2026, we expect our operations to be $18 billion, with 40% going to green finance. Another indicator between now and 2026 is that 15% of our portfolio goes hand in hand with the private sector, with priority in climate action: more reforestation, energy transition, non-conventional renewables, helping to reduce emissions in cities with electric mobility , mass transportation or nature-based solutions.
P.What challenges does the bank face in the short term?
R. We have to start incubating a new bank, in Montevideo we presented a new structure for CAF, with specialized management for cities, climate action and positive biodiversity, and social and human development. That is going to be a big challenge, with the teams that we have, since we cannot grow any more. Also make new alliances. I am referring in particular to the national development banks of the different countries, to increase the capacity to structure projects and be able to finance them. The great challenge for Latin America today is to translate the Glasgow goal into projects that effectively reduce greenhouse gases. We must overcome the inertia that we brought and accommodate the bank to this requirement. We have the number of years between now and 2030 and we need results.
P.What do you think is the biggest emergency in the region?
R.The silent crisis that exists is that of education. In a region that already accumulated problems in 2019 of informality, of low productivity, and that we knew that the problem was in employment and education, we immersed 150 million people without education for two years. The approach we make at CAF is that we have to enter areas of greater specialization and focus on education to make up for those two lost years.
P.The multilaterals suffer from the polarization of the different countries of the region. How to avoid it?
R. A lot of dialogue, there is no other alternative, and recognize the differences of the partners. We must try to ensure that the bank preserves the ability it has had since 1970 to be a common denominator, to find in language the ability to include everyone. We have also arranged for a percentage of our portfolio to work on regional integration projects. We must start moving to areas that bring us closer, to activities and sectors that unite us and do not divide us, such as the protection of ecosystems or the people who are on the borders, who need a voice and support. We want the bank to play that role, sewing in some way those characteristics that are common. There is a great challenge in Latin America, a key actor for global climate action, an aspect in which the region is far behind. There we can build and move away from polarized discourses.
P. Is there a determined commitment from all countries?
R. I have had the opportunity to speak with almost all the economy ministers, with many of the presidents, and I see common elements in all of them: great sensitivity to border issues, great concern that Latin America does not become irrelevant after this crisis and that we manage to consolidate a list of issues that are urgent. There is consensus that there will be no global solution to the problem of climate change without Latin America. These issues are uniting the vocation of the countries to act in coordination. I would not say a unifying speech, but it is coordinated to respond to the problems that most affect us.
P. Are you still determined to keep CAF’s headquarters in Venezuela?
R. CAF was born in 1968 as an Andean agreement, with headquarters in Caracas and offices in other countries. Throughout these years it has been transformed into a continental bank of Latin America and the Caribbean. Offices have been opened in different countries and 10 years ago it was decided that the executive presidency would be installed in any of them. I proposed that, for logistical reasons, it would be convenient to have the executive presidency in Panama, but the headquarters will continue to be Caracas as required by the Treaty. We have almost a third of our workforce there, it is the historic headquarters, and I try to go to Caracas every month.
P.What is the role of Spain and Portugal as partners?
R. It is a relationship of a society that has to give much more. This year we are celebrating 20 years of Spain at CAF, and we want to do it in a big way, not only celebrating what has been achieved but also imagining many more decades of common work. There are a lot of challenges in the region that we can work on together.
P. There are also 60 million Latin Americans in the US.
R.There is a treasure that Latin America has and it is this great majority present in the US, which is already one of the most important Spanish-speaking countries in the world. We know that we have a great asset there and we have asked ourselves what should happen to this asset, how we can become an additional bridge between them and the region. We are looking for those connections to position the messages that interest us from the region, such as the commitment of American philanthropy, particularly in environmental issues, and the export capacity of small and medium-sized companies from Latin America and the Caribbean to the United States. We see in the tensions of global trade an opportunity for the region. But in order for that opportunity to materialize, we will probably need adaptations in customs, phytosanitary regulations and other efforts in which the connection with those 60 million Latin Americans and Caribbeans who are present in the United States will be essential.
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