Guaidó vs Maduro goes multilateral

This week was expected to be a big week in China-Latin America relations, with the Inter-American Development Bank (IDB) scheduled to hold its Annual Meeting in Chengdu, China. However, on Friday the IDB announced in a terse message that the Annual Meeting “would not be held", and would be relocated to a place recommended by management. The cancelation was a shocking turn of events, especially in the context of the overall trajectory of the Latin America-China relationship.

The decision to reschedule pivoted on China’s refusal to allow the IDB Executive Director for Venezuela Ricardo Hausmann to attend the annual meeting. Hausmann had been appointed by Venezuela's interim president Juan Guaidó to represent his country at the bank, to replace Nicolás Maduro’s proxy. The IDB recognized that appointment earlier this month. Underscoring the uncertainty, the IDB currently does not list an Executive Director for Venezuela on its website. But, the overwhelming support for Guaidó in the Western Hemisphere made the decision a foregone conclusion.

This all started with the Trump administration trying to limit Chinese influence in Latin America, and the IDB coming into its cross-hairs. The White House had been irritated by the otherwise-pro formadecision to hold the IDB Annual Meeting in a shareholder country (Annual Meetings had been held in Busan, South Korea, and Okinawa, Japan). US Treasury Undersecretary for International Affairs (and President-presumptive of the World Bank) David Malpass sent IDB President Luis Alberto Moreno a nastygram complaining about the decision to host the IDB Annual Meeting in China, writing

I have serious reservations about the bank's process that led to that initial decision, and I do not think the 2019 meeting could be nearly as successful in Beijing as it would be if held in the region,

While unilateral demands like these are the Trump administration’s bread and butter, they fell on deaf ears. Moreno smartly disarmed the issue with a planned IDB 60th Anniversary celebration in Washington, DC, saying: “We have found the best of all worlds.” Thus stymied, the US seemed to have lost its traction on the issue, and China would have another of the diplomatic set-pieces it sees as a key part of its global engagement.

But China’s decision to double down on its support of Venezuela’s Maduro (who literally cannot keep the lights on), and refuse Guaidó’s representative entrance to China to attend the Annual meeting, has snatched defeat from the jaws of victory. It turned bilateral one-upmanship between China and the US into a multilateral statement on democracy in the hemisphere that China could not gainsay. Deputy Assistant Secretary of State for Western Hemisphere Affairs Kimberly Breier turned the US position from great power politicking to standing up against what "violated a century of diplomatic norms.” 

Breaking its silence four days after the cancellation, the Chinese Foreign Ministry laid out its view that:

The overwhelming majority of the IDB membership, including China, are of the view that the IDB annual meeting, as a gathering for the financial sector, should focus on financial cooperation. As such, it is hardly an appropriate venue for discussions of sensitive political issues. However, a certain country had continuously stirred up the sensitive political topic of the Venezuelan issue.

Local authorities are acting like nothing is wrong, with Chengdu and Panama signing an MOU (国际朋友圈再扩大!成都与巴拿马城建立友好合作关系). But the fact that websites like Sina and Soho now turn up anodyne articles on the planned Chengdu Annual Meeting as “not found” says everything about how Chinese authorities feel this has turned out.

China would seem to have misjudged how Latin America has shifted its position on Maduro, while the latter has become ever more dependent on his few sponsors left. If China had accepted Guaidó’s man, Maduro would not have changed his relationship with China. In not accepting Guaidó’s man, China has run the risk of damaging its relationship with the entire region. 

A smarter move by Chinese diplomats would have been to split the difference by continuing to not recognize Guaidó as president of Venezuela but allowing Hausmann in as a duly recognized member of the IDB Executive Board. This would have strengthened China’s multilateral institution and rule-of-law credentials that have been brought into question. It would have also helped concerns that China wants to ride roughshod like Latin American observers have seen it do in Africa. 

The Chinese government would do well to learn the lesson that, despite the economic and geopolitical power differential, it would benefit from working multilaterally and treating Latin America as an equal. The Trump administration should learn this lesson, as well.

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