Will Trump Finally Kill the Bretton Woods System?

[Celerity]

For better and often for worse, the U.S.-led IMF and World Bank have dominated the post–World War II international economy. Project 2025 and the Trump administration could change that.

https://newrepublic.com/article/194165/imf-world-bank-spring-meetings-trump-leave

https://archive.ph/yCXCU


Kristalina Georgieva, managing director of the International Monetary Fund, during a speech before the IMF and World Bank spring meetings on April 17

This week, world leaders and central bankers will convene in Washington, D.C., for the annual spring meetings of the International Monetary Fund and the World Bank. Both the chaos coursing through the global economy and another, related, prospect will loom over the week’s proceedings: whether the United States will decide to exit both these bodies. The Trump administration is currently conducting a review of its membership in international institutions, expected to produce its first findings this summer. Project 2025—to which the administration has been alarmingly faithful—called for the U.S. to withdraw from the IMF and World Bank on the grounds that they “espouse economic theories and policies that are inimical to American free market and limited government principles.”

The U.S. treasury secretary traditionally offers an opening salvo to kick off these events. Should he continue that tradition, it’ll be the international community’s first chance to hear an official Trump 2.0 position on the IMF and the World Bank. The White House’s recent posturing toward international institutions hasn’t offered many reasons for optimism. Speaking out against a proposed “Day of Hope” at the United Nations, career U.S. diplomat Edward Heartney—serving as the administration’s voice in that body—recently railed against the U.N.’s “globalist” Sustainable Development Goals as “a program of soft global governance that is inconsistent with U.S. sovereignty and adverse to the rights and interests of Americans,” praising Trump for setting a “clear and overdue course correction on ‘gender’ and climate ideology.”

The IMF and the World Bank were created in the ashes of World War II with the aim of stabilizing a global order steered by the steady hand of the U.S. Together they’re known as the Bretton Woods institutions, for the bucolic New Hampshire mountain town that hosted the 1944 meeting that gave birth to them. Their budgets are made up of proportional contributions from member governments, and the U.S. is the largest shareholder of each. A long-standing gentleman’s agreement between the U.S. and Europe further means that they leverage their considerable shared voting power in such a way that the U.S. typically picks the World Bank chief while the EU decides who gets to helm the IMF. The IMF acts as lender of last resort for poorer governments, and the terms of its debt-restructuring agreements have been criticized for decades for demanding painful austerity and privatization from borrower countries.

That situation is especially dire for the world’s most climate-vulnerable countries. A study released last year by the International Institute for Environment and Development, or IIED, found that 58 small-island developing states and least-developed countries paid $33 billion on debt servicing in 2021 and received just $20 billion in climate finance. “Resources that should be going to mitigation or adaptation are going to debt repayment,” says Ivana Vasic-Lalovic, senior research associate at the Center for Economic and Policy Research. “They don’t have the capacity to respond to climate disasters, and so they have to take on more debt.” Among the countries IIED analyzed, more than half of the climate finance they received in 2022 was provided as loans rather than grants.

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