Financier of the Year: Enrique García – Banker to Latin America

CARACAS ­— Banker to Latin America for more than three decades, Enrique García is an advocate of less government and a booster of private enterprise. But such is the respect given to García, the president and CEO of the Andean Development Corp., that he can talk economics with his ideological opposites and all walk away as friends.
During García’s 18 years at the Caracas-based bank, the multilateral lending agency has evolved from a small institution in a troubled region to an influential player in Latin America’s economic affairs – and one run by and for Latin American countries.
The bank, known as CAF, loaned some $8 billion to members last year. Yet the role of García in guiding the bank’s success is so understated, he is still little known outside of financial and government circles.
Bankers and regional experts credit García with creating an institution that is not only efficient, but one that thrives because it is able to bring together members with divergent ideologies.
Amid tensions between the socialist-inspired and free-market nations, García helps keep the peace. He is ready to find middle ground, although the CAF makes no apologies for its pro-market policies, according to Peter Hakim, president of the Washington-based Inter-American Dialogue.
“He is one of the few people who can talk freely with [Bolivian] President [Evo] Morales about economic issues and disagree and walk away still being friends,” Hakim said of García, who is a member of the Dialogue’s board of directors.
García, a native of Bolivia, studied economics and finance at the St. Louis University and served as Bolivia’s planning minister. He spent 17 years at the Inter-American Development Bank before he was elected president of the CAF for the first of four times in 1991.
García turned CAF around by establishing the bank’s reputation in international financial circles and earning the CAF investment grade ratings.
The Bolivian economist said he trained his whole life for this job, which he relishes.
“Thirty percent of it is work,” García said, speaking at his spacious office at the bank’s headquarters in the fashionable Altamira neighborhood in Caracas. “Seventy percent of it is hobby.”
García, who lives with his wife Beatriz in Caracas, spends about 80 percent of his time traveling. But he finds time to play tennis and listen to classical music and opera. He carries an iPod with music that includes Coldplay, the British rock band.
He is far more comfortable discussing the bank than himself.
More than 95 percent of the CAF’s funds come from sources outside the region, the result of the bank persuading other financial institutions to join it in lending to regional governments and companies, García explained.
“CAF is essentially a Latin American institution,” he said. “We are the only multilateral financial institution in the world that has managed to act without needing the countries of the center.” Spain, which has 3 percent of the bank’s capital, is the only member country from outside the region.
The CAF lends more than the World Bank and Inter-American Development Bank combined in some countries. The bank expects to lend some $20 billion overall between 2009 and 2010,
The bank also ranks as the region’s top source for infrastructure investment, contributing $6 billion out of a total of $25 billion in multilateral lending to finance some 55 projects, including highways, gas pipelines and other projects, in the last eight years.
Infrastructure plays a fundamental role at the CAF, whose mission focuses on sustainable development and regional integration.
“You can’t talk about integration without talking about infrastructure, highways and energy,” said García. Such investments are another way of bridging the ideological gap; all countries need infrastructure.
“We’ve chosen the issues where different approaches aren’t as relevant,” García said. Infrastructure, he said, is “acceptable to all currents.”
Having accompanied its members through the period of privatization, deregulation and trade liberalization, the bank works closely with Venezuela, Ecuador and Bolivia, where there has been a populist backlash.
But García said nations are not returning to the past. “We learned the hard way what those imbalances meant: inflation, hyperinflation, profound economic adjustments.”
Although his fourth term as CAF president ends in 2011, García steers clear of discussing his own future. He’d rather focus on the bank.
“I look to results,” he said. “I announce things when they are done.”