The week-long meetings of the International Monetary Fund and World Bank come to an end peacefully in Washington where the differences with US and allies though not evident on the surface, spilled out between US and allies.
The US administration demanding free trade pact, which is helpful to many American exporters to open up markets in various countries. President Donald Trump’s administration is keen to establish an “America First” agenda. A day after World Bank President Jim Yong Kim said that he believed the Trump administration is supportive of the global anti-poverty mission, however, the Trump administration rejected the capital increase requirement for the campaign.
The American Treasury Secretary Steven Mnuchin said in a statement that more capital is not the solution when existing capital is not allocated effectively.
The World Bank and IMF kept the focus on the need for countries to reform for the long term while global growth is strong, and to address growing inequality, especially in the most developed nations.
Most said they backed a capital hike for the World Bank while U.S dismissed the need. German Finance Minister Wolfgang Schaeuble came up with the concern over slow global trade growth and increased anti-free-trade hyperbole. He termed both as a threat to the common economic prosperity of countries. China called the lack of progress on increasing World Bank capital as regrettable.
“We hope that all parties will provide more political impetus from the perspective of increasing the legitimacy and effectiveness of the World Bank’s governance structure… so as to increase the representation and voice of emerging market and developing countries,” China said.
At the same time, the issue of climate change was reinstated as one of the world’s key challenges. Reflecting Trump’s refusal to accept it as a key global challenge, the statement in the April IMF-World Bank meetings were also bereft of any mention of climate.
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