The Financial Times website published an article on October 10 entitled "Reviving the IMF and the World Bank test US Influence" by Colby Smith, James Politi and Aimee Williams. The full text is as follows:
Recently, U.S. President Joe Biden proposed what U.S. officials called a major new initiative to provide billions of dollars in additional funding to emerging and developing economies.
The plan includes boosting the financial power of the World Bank and the International Monetary Fund. The two Washington-based institutions are at the center of the economic order spearheaded by the United States and its Allies after World War II to foster international cooperation and expand their global influence.
Mr. Biden - and top officials, including Janet Yellen, the Treasury secretary - have decided that they can revitalize both institutions by increasing American economic supplies to developing countries around the world, while countering China's growing international influence.
The plan is a litmus test for the future of the US-dominated international order - will institutions like the World Bank and the International Monetary Fund survive even as America's dominant role in the global economy wanes, or will they become insignificant in the growing geopolitical competition between the US and China?
"Never before have the U.S. Treasury secretary and president focused so consistently on the MDBS and the IMF," said Karen Matthiasen, a former acting U.S. executive director at the World Bank who now works in the international affairs division of the U.S. Treasury.
However, the implementation of the plan will not be smooth. In a polarized and dysfunctional political climate in the United States, the administration needs approval from Congress, and the Republican Party is in disarray following the ouster of House Speaker Kevin McCarthy.
It will also require broad international support, testing America's international economic clout at a time when advanced economies feel budget pressures that will limit their financial contributions and developing countries are likely to resist plans to give more resources to western-dominated institutions without increasing their representation.
The new U.S. initiative to inject new money into the World Bank and the International Monetary Fund does not include a push to address the underrepresentation of China and other emerging economies. This is a glaring omission because, despite being the world's second-largest economy, Beijing has only the third largest voting share in both bodies.
Kenneth Rogoff used to work at the International Monetary Fund and is now at Harvard University. "They [the IMF and World Bank] are at this crossroads where they need to decide whether to keep China engaged, fully engaged or start the process of disengagement," he said. Without China, I really don't see how we're going to solve the world's problems."
This is not to say that China is unwilling to invest the capital necessary to increase its voting power in the World Bank. But the bank's major Western shareholders are resistant because increasing China's voting power is most likely to reduce the voting power of other countries such as the United States, Japan, Germany and the United Kingdom.
"There is a need for constant change to reflect the changes taking place in the world economy," IMF Managing Director Kristalina Georgieva said of the fund's future voting rights.