US Treasury Secretary Scott Bessent on Wednesday called on the International Monetary Fund and World Bank to reconnect with their founding missions, saying the two institutions have been distracted by projects unrelated to finance and economics.
Delivering a speech on the sidelines of the institutions' biannual gatherings in Washington, Mr Bessent laid out what he called a blueprint to restore equilibrium to the global financial system as well as the IMF and World Bank.
Mr Bessent affirmed the institutions' importance, but said “mission creep” has knocked them off course.
“I am eager to work with each of you to restore order to the international system. To achieve this, however, we must first reconnect the IMF and World Bank with their founding missions,” Mr Bessent said.
He pointed to the IMF's projects involving climate, gender and social issues, saying such objectives have caused the IMF to stray from its core mission of promoting global monetary co-operation and financial stability.
“These issues are not the IMF’s mission. And the IMF’s focus in these areas is crowding out its work on critical macroeconomic issues.”
Mr Bessent also said the fund must be firmer in its lending standards, saying it “needs to say no” sometimes. He also said it should not be obligated to lend to countries that fail to implement reforms.
He also criticised the World Bank “for vapid, buzzword-centric marketing accompanied by half-hearted commitments to reform”. However, he said he was pleased the World Bank is considering lifting its ban on funding nuclear energy projects.
Mr Bessent directed criticism at China during his remarks, saying that Beijing has pursued distortive policies and murky currency practices for decades, and that it should no longer be considered a developing country.
“Treating China – the second-largest economy in the world – as a 'developing country' is absurd,” he said.
US President Donald Trump has been withdrawing the country from several multinational organisations and agreements, and it was feared the IMF and World Bank would be the next targets. However, Mr Bessent appeared to push back on those concerns.
“Far from stepping back, America First seeks to expand US leadership in international institutions like the IMF and World Bank,” he said, referring to the Trump administration's agenda.
