An interview with Daniel Zelikow

Daniel M. Zelikow, a United States citizen, assumed the position of executive vice president of the Inter-American Development Bank on March 5, 2007. Prior to joining the Bank, he was the managing director of the Government Institutions Group of JPMorgan Securities Inc. for several years after holding senior positions in the U.S. Department of Treasury. In addition to overseeing IDB operations and chairing the IDB’s Loan Committee and the Program and Budget Committee, the executive vice president supervises self-evaluation by management and is in charge of the Credit Risk Assessment Office.

Zelikow came on board shortly after the IDB’s new organizational structure was approved in a bid to better align the Bank with needs in the Latin American and Caribbean countries it serves. He was immediately assigned responsibility for managing implementation of this realignment. But this challenging assignment didn’t stop Zelikow, a summa cum laude graduate of Dartmouth College who holds a doctorate in economics from Oxford University, from literally getting his hands dirty during the “Greaseball Challenge,” a charity biofuel-powered car rally. IDBAmérica’s Alexandra Russell-Bitting met with Zelikow to find out more about his background, his views of the IDB and his approach to the realignment.

IDBAmérica: The IDB sponsored a car in the "Greaseball" rally and held a kickoff at which you donned a T-shirt and filled the tank up with used cooking grease. A lot of people were charmed by the event, which was not the sort of thing we’re used to at the usually rather straight-laced IDB. Have you ever done anything like that before? Do you think such events can help the Bank spread its message?

Zelikow: Sponsoring the Greaseball challenge was a great idea—I wish it had been mine! And yes, I think the rally helped to publicize the fact that energy alternatives are already available to us, sometimes through very low-tech solutions. For example, the car the Bank sponsored, “Greased Lightening,” is fueled by cooking grease. I didn’t get to drive the car—maybe because I seemed too straight-laced to them—but they did allow me to sit behind the wheel and gun the engine. It smelled like French fries.

IDBAmérica: Describe how your professional and personal background prepared you for the challenges of your position as executive vice president at the Bank.

Zelikow: I’ve been an academic economist, an economic adviser to the president of a small Balkan country, the manager of a large technical assistance program, a United States Treasury Department official and an investment banker. I’ve learned some things along the way, the most important of which is how little I know. Especially as one becomes more senior in an organization, it is impossible to be an expert on all the issues that one must deal with. My response to this dilemma is to face up to my ignorance, surround myself with colleagues who know a lot more than me, ask questions, try to listen well, trust people’s good intentions and reciprocate in kind.

IDBAmérica: What was your opinion of the IDB before coming on board?

Zelikow: When I was an investment banker, the IDB was one of my clients. My exposure to it was primarily on the financing side. Before that, I had familiarity with the IDB from the perspective of a shareholding government, but really little knowledge of how the Bank actually functions. I appreciated the importance of the IDB to its borrowing members, recognized how it is, uniquely, a bank of the region, and I had been impressed by a number of people I had met over the years who work at the Bank.

IDBAmérica: How would you describe your management style?

Zelikow: Direct, open, non-hierarchical and impatient for results.

IDBAmérica: The Bank has a lot of competition from the private sector as well as other multilaterals. For it to succeed, what does it need to look like 10 years into the future?

Zelikow: Great question, but I’m not sure I agree entirely with the initial premise. If the Bank encounters competition from the private sector, it probably means we—and other multilaterals—don’t need to be involved. The greater challenge is how we can stay relevant if our biggest clients don’t need our money because they have access to private sector sources of capital. I think there are several answers to this.

The first is that we need to package our money with good advice and knowledge. One of the key reasons for the realignment is to create critical mass in our knowledge functions so that we can offer cutting-edge advice to our clients. In fact, I think we should be transmitting this knowledge whether or not it is in the context of lending money.

The second is that we need to expand our client base. This means extending our work in the private sector and to subsovereign entities. But it also means redoubling our efforts with the poorer countries in our region and the poorer areas of our middle-income members.

The third is that we need to develop new instruments, such as local currency lending, and risk mitigation vehicles that are higher-value uses of our strong balance sheet. These instruments will be better valued by our clients who have achieved full access to private sources of capital for their dollar financing needs.

Finally, I think we need to focus on the development impact of our work as much as on the amount of money we lend.

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