- The head of the US Treasury says that the IMF, WB moved away from their main missions.
- Urges the IMF to be harder with countries that are resistant to reforms.
- Said the two institutions need reforms to find us confidence.
Washington: The United States has criticized the International Monetary Fund and the World Bank, saying that it has lost sight of their main objective – stimulating economic growth.
The American secretary of the Treasury, Scott Bessent, called on Wednesday the two institutions to stop focusing on social issues and to return to support global stability and financial growth, stressing that the IMF and WB “must be adapted again to the objective”.
Speaking on the sidelines of the spring meetings of organizations in Washington, Bessent said that the IMF devotes “disproportionate time” to climate change, sex and other social subjects.
“The Trump administration is wishing to work with them – as long as they can remain faithful to their missions,” said Bessent, adding that the IMF should focus on global monetary cooperation and financial stability.
The World Bank, he said, should focus on basic functions such as helping developing countries to develop their economies, lower poverty and stimulate private investments.
Bessent’s comments are involved in the concerns that Washington could withdraw from the fund and the bank.
In a briefing with journalists after his speech on Wednesday, Bessent said he had meetings with IMF chief Kristalina Georgieva, and the president of the World Bank Ajay Banga, and that his remarks on Wednesday was “no surprise for them”.
“I think they are good leaders, and I hope they will gain the confidence of the administration in the coming months thanks to their actions,” added Bessent.
While the IMF and the World Bank play a critical role in the world economy, “under the status quo, they fail,” said Besse in his speech.
He added that they “had to go back from their tentacular and not focused agendas”.
Bessent called on the IMF to be more difficult with borrowers, saying that the fund “has no obligation to lend countries that do not implement reforms”.
“Economic stability and growth should be the markers of the success of the IMF-not how much money the institution is ready,” he said.
A FMI spokesman told journalists that the fund was waiting to continue commitment to the United States government.
On the World Bank, Bessent said that the group should also “no longer expect white checks for vaporous marketing and fashionable words accompanied by shy commitments to reform”.
He noted that the bank could use resources more effectively by helping emerging countries to improve access to energy, saying that they should focus on “reliable technologies” rather than looking for “distortion climate financing objectives”.
This could mean investing in gas and other energy production based on fossil fuels, he said. He also welcomed the recent efforts from the bank to eliminate restrictions on nuclear energy support.
He also asked “delays in graduation”, calling “absurd” so that China is always considered a developing country.
Bessent said he was not concerned that the IMF has reduced his American growth prospects.
He expects greater clarity on prices towards the third quarter of the year, and said that the effects of deregulation should also start to launch almost the same time.
