Trump’s Latin America Allies Deepen Ties With Washington Lenders

(Bloomberg) -- Latin America's rightward, market-friendly shift is reshaping its relationship with Donald Trump's Washington, including new flows of money from the multilateral lenders historically villainized in the region for pushing fiscal austerity.

The alignment was on full display at the International Monetary Fund-World Bank annual meetings in Bangkok over the past week, as officials from the so-called Bretton Woods institutions embraced many of the policies being pursued by new, Trump-aligned governments. They also described growing demand across the region for fresh funding and policy guidance.

"We do see a shift in policy direction," Nigel Chalk, director of the IMF's Western Hemisphere Department, said at a briefing Friday. "We see our role as supporting that shift toward more socially conscious, more fiscally responsible, more market-oriented policies in the region."

The growing footprint coincides with a dramatic redrawing of Latin America's political map, including leaders aligned more closely with Trump.

The IMF has 10 active programs in the Americas, according to Chalk, out of a total of 35 active lending programs. That includes a precautionary line with Chile and fresh financing for Bolivia, as well as active talks with Colombia for a new program — all of which recently elected Trump-backed presidents. It's also active in MAGA-inspired El Salvador and Argentina, while both the fund and the bank are reenaged with Washington-controlled Venezuela.

To be sure, Chalk and and his counterpart at the World Bank, Susana Cordeiro Guerra, said politics doesn't play a role, and kept Trump out of the discussions this week.

"The bank is agnostic, as much as we can, to the politics of reform," Cordeiro Guerra said. The increased engagement with the new leaders is because "the overlap with the jobs and growth agenda is tremendous."

While many world leaders' relationships with Trump are more personal and transactional than ideological, his Republican party has traditionally backed the fiscal discipline and market-friendly policies of the IMF, known as the Washington Consensus, and is more aligned with right-wing parties globally on issues of immigration and security.