Spring Meeting: US Seeks to Reform IMF, World Bank Operations
The United States Treasury Secretary, Scott Bessent, revealed on Wednesday that the Trump administration would pursue a significant overhaul of the International Monetary Fund and World Bank as it seeks a “sustainable international economic system” that better serves the United States and other countries.
Bessent said the administration would not retreat from those institutions, as some Trump allies had proposed, but instead would seek a stronger leadership role and push for major institutional changes as part of a plan to “restore equilibrium to the global financial system.”
“America First does not mean America alone,” Bessent said in a speech on the sidelines of the spring meetings of the IMF and World Bank. The Trump administration, he said, “seeks to expand U.S leadership” in those institutions as he charted a slew of reforms that the administration wants to see.
Bessent sharply criticized the IMF and World Bank, saying that “mission creep has knocked these institutions off course.” He criticized the IMF for devoting too much time to “work on climate change, gender, and social issues” while failing to hold countries to which it lends money accountable for implementing economic reforms.
“The IMF and World Bank serve critical roles in the international system,” Bessent said in prepared remarks. “And the Trump Administration is eager to work with them — so long as they can stay true to their missions.”
Bessent outlined some changes that the U.S. would seek to advance at the IMF and World Bank. He said the World Bank should focus on increasing energy access around the world, praising the bank’s recent decision to remove longstanding prohibitions on supporting nuclear energy. World Bank President Ajay Banga will formally present his new energy plan to the bank’s board in June.
Bessent also criticized the World Bank for its “absurd” treatment of China as a developing country. “While it has been at the expense of many Western markets, China’s rise has been rapid and impressive,” Bessent said. “But if China wants to play a role in the global economy commensurate with its actual importance, then the country needs to graduate up.”
The Biden administration pledged $4 billion to replenish a bank fund that serves the world’s poorest countries. That funding is still subject to approval in a Republican-controlled Congress, and Bessent connected the U.S. approval of that money to the bank delivering on reforms requested by the U.S.
“Any of that would be contingent on the belief that we are back to basics, so we will see,” Bessent said to reporters after his speech.
China also dominated the concerns Bessent raised about the IMF. He said the global financial watchdog has been “whistling past the graveyard” and needs to take a firmer stance against Beijing’s economic practices.
“The IMF needs to call out countries like China that have pursued globally distortive policies and opaque currency practices for many decades,” Bessent said.
IMF Managing Director Kristalina Georgieva last week called on all countries to “put their own houses in order” in response to rising debt and deficit spending. Bessent said he was open to that critique, “but we will not abide the IMF failing to critique the countries that need it most — principally, surplus countries.”
The IMF and World Bank gatherings in Washington this year have been dominated by global tensions over Trump’s trade war. The IMF earlier this week warned that Trump’s tariffs could be a drag on world economic growth and raised the risk of a global financial crisis.
Bessent said he has met with Banga and Georgieva, and “the speech today was not a surprise for them.”
“I think that they are good leaders,” Bessent told reporters. “I hope that they will earn the confidence of the administration in the coming months through their actions.”
Source: Politico
