The timing for this year’s International Monetary Fund and World Bank annual meetings couldn’t be more precarious. Just a few weeks from now, the United States, the largest shareholder in both institutions, could see a major political shift. A return of former President Donald Trump
to the White House could throw into question broader U.S. engagement with the world, its sizable contribution to global development, and efforts by both institutions to meet new challenges like climate change amid increasing geoeconomic fragmentation. “People are going to be wringing their hands: What does this U.S. election mean for the future of multilateralism, interdependence, the U.S. role in the world?” said Mark Sobel
, U.S. chair at the Official Monetary and Financial Institutions Forum and a former U.S. representative to the IMF. “Those are huge questions that are going to be discussed behind the scenes and I think people are nervous as heck,” he said of global finance officials who are gathering in Washington this week.
In December, the Biden administration will make a pledge to replenish funding for the International Development Association, an arm of the World Bank that provides financing to the poorest countries. That’s among a number of international development, health and climate funds that are seeking $100 billion over the next year. It will be up to a new U.S. administration and Congress to make good on those promises as groups like the Center for Global Development have called out a “traffic jam” in fundraising.
Officials aren’t acknowledging that it’s a problem, yet. “We don’t spend any time at the World Bank discussing the outcome of the U.S. election,” World Bank President Ajay Banga said during a press conference Thursday. He was quick to point out that another major lending arm of the bank actually got a substantive capital increase during the first Trump administration.
Geoffrey Okamoto, who served in Trump’s Treasury and then as No. 2 at the IMF (he’s now at Goldman Sachs), made a similar point. “The Trump administration was useful in augmenting resources in exchange for proper reforms, so while that’s difficult for the institutions to have to negotiate with and work through … I would be careful not to characterize that in a negative way,” he said. “Some of these reforms are absolutely necessary.”
Beyond short-term funding needs, the election may put the relationship between the U.S. and the international institutions at a more existential junction. Project 2025, a conservative policy template that Trump has distanced himself from, has advocated the U.S. pulling out of both institutions. That scenario may be unlikely. Biden officials have defended U.S. involvement and have been making the point that both institutions play a key role in addressing negative “spillovers”
from China’s economic policies. One senior Treasury official this month even called on the IMF to do more to scrutinize China’s lending and exchange rate policies. “In a Trump presidency, the scrutiny will be all around how China is benefiting and participating,” said Matt Swinehart, who served in the Treasury Department under the administrations of Presidents Barack Obama
, Trump and Joe Biden. That fight could come to a head next year when the IMF is expected to begin work on realigning its shareholder quota. Beijing may push for a larger slice, giving it more voting power to reflect the increased size of its economy. “I don’t think there will be this wholesale retrenchment from the institutions,” Swinehart added. “Most people who would be considered for these positions [in a Trump administration] realize it’s pointless just to walk away or not to engage meaningfully.”
Okamoto said any administration will assess which of its options are best to use in a given situation. The U.S. has a significant foreign assistance budget that allows it to provide bilateral support in many circumstances. But he also pointed to the Trump administration’s use of the IMF as a multilateral tool to provide economic support to Jordan, a key geopolitical ally for the U.S.
“What is the agenda you want to execute, and what tools do you have to do it?” he said. “In the last administration, there was substantial interest in how the IMF can be used to advance U.S. priorities.” But regardless of who wins, the U.S. drift toward protectionism and industrial policy puts the founding and arguably most important member at odds with both institutions’ efforts to encourage global integration.
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