“America doesn’t mean only America,” the Treasury Secretary said in a prepared statement.
The United States will support changes to the International Monetary Fund (IMF) and the World Bank to ensure economic and financial sustainability, the Scottbescent Treasury Department said Wednesday.
Bescent has pledged to strengthen the role of leadership in laying out his vision for twin institutions and America’s involvement and pursue reforms that “restore the balance into the global financial system.”
“America doesn’t mean only America,” the Treasury Secretary said in a statement prepared at an April 23rd event hosted by the International Institute for Finance.
“We must enact important reforms to ensure that Breton Woods institutions are serving stakeholders.”
He said that the IMF and the World Bank have “endless value,” but they are engaged in “mission creep” “which knocked these institutions off the course.”
“The IMF and the World Bank play an important role in the international system, and the Trump administration wants to work with them as long as they can stay true to their mission,” Bescent said.
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“Today’s IMF is blowing whims past the cemetery.”
Rather than focusing on global financial cooperation and financial stability in recent years, the IMF has devoted more time and resources to vast subjects, including climate, gender, and social issues.
“These issues are not the IMF’s mission,” Bescent said. “The IMF’s focus in these areas is to congested work on important macroeconomic issues. …The IMF must be made into the IMF again.”
Since President Donald Trump returned to the White House, concerns have been growing that the president will withdraw the US from the IMF, which will change the share of voting rights.
The US currently enjoys 16% voting rights, followed by Japan (6%), China (6%) and Germany (5%).
Others, including Bank of England Governor Andrew Bailey, say the US withdrawal will lead to “fragmentation of the global economy.”
Economists believe the slowdown is attributed to Trump’s sweeping tariff agenda.
On May 10, 2018, a man walked past the International Monetary Fund (IMF) logo at his Washington headquarters. Yuri Gripas/Reuters
Focusing on China
Bescent used his speech to highlight China by encouraging the World Bank to stop lending to countries with high economic growth.
He told the audience it was ridiculous to treat the world’s second-largest economy as a developing country.
“The World Bank continues to lend World Bank borrowings annually to countries that meet the criteria for graduating,” Bescent said.
“There is no justification for this ongoing loan. It sucks up resources from higher priorities, crowds private market development, and hampers the country’s efforts to transition from dependence on the World Bank to employment-rich, private sector-led growth.”
The World Bank maintains a step-by-step borrowing system that relies on loan terms tailored to the country’s economic and credit status. For example, a low-income economy receives favorable terms of lending, such as longer repayment schedules and lower interest rates.
Despite its position as the world’s second largest economy, the World Bank has defended its lending practices to China for its developmental retreat, from regional disparities to environmental challenges.
A senior administration official said China’s economic progress is “fast and impressive”, but at the expense of the Western economy.
“If China wants to play a role in the global economy that is worth its real importance, the country needs to graduate,” Bescent said.
He also encouraged China to participate in global rebalancing, and the US increased manufacturing power while reflecting previous sentiments that Beijing should focus on domestic demand.
“Deliberate policy choices by other countries have hollowed out the US manufacturing sector, undermined critical supply chains, and put national and economic security at stake,” he said.
China’s impact on twin facilities has grown significantly over the past decade.
The Chinese Communist regime has provided rescue loans to countries facing financial difficulties. These loans generally have high interest rates and are given almost exclusively to debtor countries under China’s Belt and Road Initiative (BRI).
“In short, China has developed a system of “belt and road relief” that will help recipients avoid defaults and continue their BRI debt, at least in the short term,” the paper states. “Therefore, China’s role as an international crisis manager can be compared to the role of the US Treasury in the previous Latin American debt crisis.”
China’s IMF growth forecast for 2025 was 4%, down 0.6 percentage points from previous estimates.
