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View Full Version : Trump Takes Aim at World Bank Over China Loans




Swordsmyth
10-14-2017, 12:10 AM
The Donald Trump administration has already picked fights with most international organizations and accords, from NATO to NAFTA. This week, it took aim at the World Bank, refusing to pony up more money for development projects because the bank lends so much money to China. That could serve to turbocharge China’s own efforts to craft an alternative to Western-led development banks.
For two years, the World Bank has been trying to get member countries to subscribe to a capital increase for its development unit, the International Bank for Reconstruction and Development, and hoped to reach a deal this week during the annual meeting in Washington. But the U.S. Treasury won’t back the move.
“The bottom line here is right now we’ve got too high a percentage of the World Bank’s balance sheet that’s going to countries and to projects that already have ample borrowing capacity,” a senior Treasury official told (https://www.reuters.com/article/us-worldbank-treasury/u-s-treasury-dashes-hopes-for-near-term-world-bank-capital-hike-idUSKBN1CG0C7) Reuters, which noted that China is the IBRD’s biggest recipient of development loans, totaling $2.4 billion.
The Treasury official suggested that poor countries should use their own limited money or turn to the private sector, instead of seeking the development aid that has traditionally been disbursed as part of the World Bank’s poverty-reduction mission.
“To fund development needs, there needs to be renewed focus on domestic resource mobilization and engagement in private sector development,” the official told Reuters.
By tying funding to the World Bank’s China portfolio, former Treasury official Scott Morris told (https://www.ft.com/content/89efbfb8-af66-11e7-aab9-abaa44b1e130) the Financial Times, the Trump administration is essentially “picking a direct fight with China.”
The United States has what amounts to veto power over the World Bank’s efforts to raise fresh capital.

More at: http://foreignpolicy.com/2017/10/13/trump-takes-aim-at-world-bank-over-china-loans/