US wants World Bank to give more support to poorest nations

WASHINGTON:┬áThe World Bank, a major source of development lending, needs to make more progress in shifting its loans away from fast-growing economies such as China and devoting more support to the world’s poorest nations, Treasury Secretary Steven Mnuchin said Saturday.

The Trump administration was encouraged that the bank’s private sector lending operation wanted to step up support for nations “affected by fragility, conflict and violence,” Mnuchin said as the spring meetings of the bank and the International Monetary Fund wrapped up in Washington.

The World Bank, he said, needed to make sure that such support was aimed at boosting “private investments that are growth-enhancing and poverty-reducing.” The U.S. wants to see “additional progress” in shifting more World Bank loans to poorer countries, he said.

The lending institution is a major source of development assistance for projects such as building damns for energy transmission. Mnuchin said investments in energy production represented a critical need to aid development in poorer nations.

The U.S. has succeeded in installing David Malpass, a longtime World Bank critics, as the bank’s new president, although President Donald Trump said in a published interview that he had considered his daughter Ivanka, a White House adviser, for the job.

“She would have been great at that because she’s very good with numbers. She’s got a great calmness. … I’ve seen her under tremendous stress and pressure,” he was quoted as telling The Atlantic.

When Jim Yong Kim resigned suddenly as bank president earlier this year, reports said that Ivanka Trump along with Malpass were being considered for the job, which has always gone to an American.

Coinciding with the institutions’ meetings was a gathering of world financial leaders and central banks, who said the global economy was likely to pull out of a brief slump later this year.

But a trade standoff between the United States and China threatens to dim the economic outlook.

“We must be mindful of an escalation of trade tensions,” Japanese Finance Minister Taro Aso said Friday. Japan holds the chairmanship of the Group of 20 major economies.

The IMF cut its forecast for global growth from 3.6% last year to 3.3% in 2019, the slowest since the recession year 2009, but it predicts growth will return to 3.6% in 2020.

The U.S. and China, the world’s two biggest economies, have imposed tariffs on $350 billion worth of each other’s goods. They are battling over U.S. allegations that China deploys predatory tactics – including cybertheft and forcing foreign firms to hand over trade secrets — in a sharp-elbowed effort to challenge American technological dominance.

Financial markets have rallied this year on hopes that the two countries will reach a settlement.

Source from: The Peninsula