At the G20 Summit in New Delhi next month, US President Joe Biden will call for changes to the IMF and World Bank that would better meet the needs of developing countries, the White House announced on Tuesday.
According to Jake Sullivan, the national security adviser for the White House, the two need to provide a better alternative to what he called China’s „coercive and unsustainable lending” through Beijing’s Belt and Road Initiative.
„We have heard loud and clear that countries want us to step up our support in the face of the overlapping challenges they face“, Sullivan told the press.
At the G20, Biden „will really focus a lot of his energy while he is there on the modernization of the multilateral development banks, including the World Bank and the IMF,” he stated.
According to him, the goal is to make sure that the development banks provide „high standard, high leverage solutions” to the problems that confront developing nations.
The Belt and Road Initiative, Beijing’s decade-old effort to increase China’s influence in global development, which has featured substantial infrastructure and industrial loans to poorer nations, was contrasted with the two institutions, which he described as being „highly effective and transparent”, by the speaker.
„I am suggesting that the World Bank and IMF are a positive, affirmative alternative to what is a much more opaque, or coercive, method” of development finance China is delivering, the official added.
According to him, the US will promote ideas in New Delhi that would expand the World Bank and IMF’s capacity to lend by about $200 billion.
But Sullivan emphasized that China is crucial to modernizing both organizations as a G20 member and a significant partner in the IMF and World Bank. Therefore, he continued, „our support for the World Bank and the IMF is not against China.”
As the BRICS, a group of significant rising economies dominated by China, held their own meeting in South Africa, Sullivan delivered his remarks. A quarter of the world’s economic output is accounted for by the so-called BRICS-Countries, which include Brazil, Russia, India, China, and South Africa. Interest in joining the group has increased.
Since the BRICS are a fairly diverse group of nations, Sullivan stated, „We are not looking at the BRICS as evolving into some kind of geopolitical rival to the United States or anyone else.“