By David Bosco
Scott Morris at the Center for Global Development wonders if the rapprochement between Washington and Havana will finally usher Cuba back into the World Bank:
Cuba withdrew its membership from the World Bank in 1960…establishing membership will require some de minimis shareholding being made available to Cuba and the country’s willingness to purchase those shares. Of course, these actions will require the support of the United States, something that is implied by last week’s normalization of relations, though not stated explicitly.
Several years ago, Brookings Institution scholar Richard Feinberg authored a paper advocating a warming between Cuba and international financial institutions like the World Bank. Along the way, he surveyed some of the formidable U.S. legislative obstacles to Cuban membership and borrowing, including provisions of the Helms-Burton act:
Helms-Burton [ ] instructs the U.S. executive directors in the IFIs “to oppose the admission of Cuba as a member of such institution until the President submits a determination that a democratically elected government in Cuba is in power.”(Public Law 104-114 (1996), Section 104). The bill continues: “If any international financial institution approves a loan or other assistance to the Cuban government over the opposition of the United States, then the Secretary of the Treasury shall withhold from payment to such institution an amount equal to the amount of the loan or other assistance” with respect to either the paid-in or callable portion of the increase in the institution’s capital stock.
Yet, as Feinberg points out, the United States does not have veto power when it comes to World Bank membership decisions. The United States is, of course, hugely influential in Bank decision-making. It is the Bank’s largest single shareholder (at more than 15 percent) and has traditionally chosen the institution’s president. Yet only a small group of decisions (notably changes to the Bank’s Articles of Agreement) requires an 85 percent supermajority, which is what creates the de facto U.S. “veto” power. Given broad international support for Cuba’s reintegration into the international system, it’s hard to imagine that Washington could hold the line against membership even if it desired to do so (which now appears unlikely).
If Havana does decide to pursue membership in the Bank, its road would actually begin at the International Monetary Fund. Membership in that institution–which operates by very similar voting rules– is a prerequisite for becoming a Bank member.