US Treasury Secretary Scott Bessent on Wednesday said he supports a revamp of the International Monetary Fund's quota sources, while repeating his call for it to drop its climate change policies.
Mr Bessent said he also supports the coming expiration of the World Bank's climate change action plan. When it expires, he said the World Bank should “immediately shift its myopic focus on climate and financing volumes to one that emphasises high-quality, durable projects, rather than shaping and selecting projects to chase arbitrary financing targets that do little to lift people out of poverty”.
As the largest shareholder at the IMF and World Bank, the US holds effective veto power at both institutions. Mr Bessent has led the administration of US President Donald Trump's push for the Bretton Woods institutions to drop their projects on topics such as climate change, gender and social issues, which he says stray from their core mandates.
He said this week that he believed the two institutions were moving more in line with the US direction, although he also criticised the fund's dour outlook on the global economy, which is set to slow this year due to oil shock caused by the Iran war.
Mr Bessent said the US remains committed to a “strong, quota-based” IMF. The IMF's 16th quota review was first approved in 2023, although it has not yet been implemented.
IMF managing director Kristalina Georgieva said last week she was optimistic the quota review would be approved by the US Congress. The IMF chief said the extra $1 trillion in lending capacity would give the fund the “fire power” it needs to quickly tackle crises.
“It is not like we run out of money but we want to be so strong that the crisis comes, looks at us, puts its tail between its legs and goes away,” she said.
Critical minerals push
Mr Bessent also called on the World Bank to finance critical minerals, as the Trump administration continues to find ways of reducing dependency on Chinese imports.
China accounts for 90 per cent of global processing in critical minerals supply. Export restrictions placed by Beijing last year, and disruptions in oil markets caused by the effective closure of the Strait of Hormuz, are putting a new spotlight on the fragilities in critical minerals supply.
“Building on the recent adoption of a critical minerals strategy, we expect to see all parts of the Bank move quickly to support the policies, projects and associated infrastructure needed to unlock more deals that will help diversify critical minerals supply chains and increase domestic value capture across the supply chain,” Mr Bessent said.
The US has made several efforts to loosen China's grip on critical minerals, including through a bloc aimed at implementing price floors for critical minerals, which was established months after an initiative known as Pax Silica that is aimed at protecting AI-related supply chains.
