United States President Joe Biden plans to offer developing countries at the G20 summit in India to reform the World Bank, the International Monetary Fund (IMF) and other structures at a very low cost. However, this initiative of the head of the White House is considered by developing countries very sceptical. This is reported by Politico with reference to sources.
Politico claims that Joe Biden will outline his intention to offer hundreds of billions of dollars to developing countries by reforming the World Bank, the International Monetary Fund and raising private money for infrastructure projects. According to the publication, “the hope is that, using the relatively small U.S. investment of $3 billion,” Washington can turn these institutions into a viable alternative to China’s “forced lending” under the Belt and Road Initiative.
However, the publication stresses that economists and diplomats from developing countries “have expressed deep scepticism about US intentions”. Many experts point out that Western funding – even after Biden’s rate hike – will not come close to the trillions of dollars that “developing countries need to fight climate change.”
“The IMF and World Bank packages are not viewed very positively. These all come with very heavy commitments that will tie our hands on how we manage our (foreign direct investment – ed.), monetary policy and taxes,” an unnamed Southeast Asian diplomat elaborated.
Politico emphasises that many leaders of developing countries want to play a bigger role in the new economy than just supplying raw materials and being recipients of Western aid. According to the publication, they are unhappy that Biden’s “new vision of development” still sees them as recipients of Western capital and technology, rather than helping them build their own domestic capacity.
“I will say that for many Southeast Asian nations, we don’t just want to export raw materials. We would like to strengthen our manufacturing sector,” said Malaysian Deputy Commerce Minister Liew Chin Tong.
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