US President Biden Pushes for IMF and World Bank Reforms to Counter China's Belt and Road Initiative
The US President Joe Biden plans to push for reforms to the IMF and World Bank to better address the needs of developing countries and counter China's coercive lending practices. The US aims to modernize these institutions at the upcoming G20 summit in Delhi and proposes increasing their lending power by $200 billion. However, the US also acknowledges China's importance and partnership in these institutions and does not see the BRICS nations as geopolitical rivals.
US President Joe Biden will urge reforms to the International Monetary Fund (IMF) and the World Bank that will better serve the needs of developing countries. This announcement came during a press briefing by White House National Security Advisor Jake Sullivan on Tuesday.
Sullivan emphasized the importance of providing a better alternative to China's "coercive and unsustainable lending" through its Belt and Road Initiative. The US intends to focus on modernizing the multilateral development banks, such as the World Bank and the IMF, during the G20 summit in Delhi next month.
The goal is to ensure that these institutions offer high standard and high leverage solutions to the challenges faced by developing countries. In contrast to China's Belt and Road Initiative, Sullivan described the World Bank and the IMF as highly effective and transparent.
He stated that they provide a positive and affirmative alternative to China's more opaque and coercive approach to development finance. The US will propose increasing the lending power of the World Bank and the IMF by approximately $200 billion at the G20 summit.
However, Sullivan emphasized that China is central to the modernization of these institutions, as it is a member of the G20 and a key partner in the World Bank and the IMF. The US's support for these institutions is not meant to be against China. During these discussions, a China-led forum of major emerging economies, the BRICS, is also holding its own summit in South Africa.
Sullivan clarified that the US does not view the BRICS as a geopolitical rival and considers it a diverse collection of countries. The BRICS nations, including Brazil, Russia, India, China, and South Africa, together represent a quarter of the global economy, attracting interest from other countries looking to join the club.