Devex Invested: An ‘America First’ vision for the World Bank and IMF

More than a month after a review ordered by U.S. President Donald Trump was set to be completed, there are still questions about how the country will participate in international organizations. Any official results of that review, if it is complete, have not been made public — and it’s unclear if they ever will be.

But there are some signals for how the U.S. might engage with the World Bank, the International Monetary Fund, and other multilateral development banks where it’s a major shareholder. A report shared with Congress in July and obtained by Devex assesses progress at those institutions and lays out priorities for U.S. engagement this year.

The report echoes some of U.S. Treasury Secretary Scott Bessent’s comments earlier this year. The common refrain is the institutions returning to what the U.S. views as their core missions, which for the MDBs means poverty reduction and private-sector-led development, and for the IMF means fiscal and monetary policy. The U.S. views a focus on climate or gender, for example, as outside the core missions.

“It is a strategic priority for the United States to maintain its leadership position in the IFIs [international financial institutions], with the goal of supporting U.S. interests and achieving robust reforms so that the institutions remain relevant and aligned with President Trump’s America First policy agenda while reducing opportunities for malign actors to expand their influence within and through the IFIs,” the report says.

One thing that is clear is that the U.S. wants to keep its position as the top shareholder at these institutions, and it seeks to limit the role and benefits that China might gain from participating.

It also seems set on pushing a similar set of reforms at many of the MDBs — a shift to an “all of the above” energy strategy that includes fossil fuels and nuclear, procurement changes to favor best value and increased U.S. private sector participation, a push to spend efficiently and cut costs, and ending lending to China or trying to counter its policies on issues from critical minerals to debt.  

On some of those fronts, the U.S. is already making progress. The World Bank reversed its ban on nuclear energy and discussed investments in upstream natural gas, and the Asian Development Bank is also considering allowing nuclear energy investments and backing away from touting its climate credentials. The World Bank has also placed a clear focus on jobs — which the administration seems to approve of in the report — and has made several procurement changes.

Read: How the US is pushing its ‘America First’ vision at World Bank, IMF

ICYMI: World Bank backs nuclear revival while gas stays a political fault line

See also: In a changing world, where do World Bank reforms stand? (Pro)

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Shuffling the deck

It looks like the IMF may be following suit and responding to U.S. demands to return to its core mission.

Though the IMF hasn’t confirmed it publicly, it is planning some changes to the parts of the institution handling gender and climate policy, Bloomberg reports. That will include merging the IMF’s Climate and Development Policies Division and its Inclusion and Gender Unit into a new Macro-Financial and Structural Policies Division.

The changes are expected to be completed by the IMF-World Bank annual meetings next month, according to Bloomberg. And while the IMF hasn’t commented, it seems a move clearly aimed to signal to the U.S. that it’s taking its directives seriously.

Filling the tank

The African Development Bank’s concessional lending arm, the African Development Fund, is heading toward a replenishment later this year — and it’s not exactly the easiest moment to be asking shareholders to pony up new money.

Despite that, bank officials tell my colleague Ayenat Mersie that they hope it will be the biggest replenishment yet, surpassing the $8.9 billion record contributions of the last go-round. That might rely on two new strategies the bank hopes to deploy.

First, the bank has asked its shareholders to change some of ADF’s rules and allow it to tap capital markets, which it estimates will allow it to raise $5 billion per a three-year replenishment cycle. The World Bank’s concessional arm, the International Development Association, does this, though there have sometimes been questions about the trade-offs of doing so as it can reduce the share of grants and increase the cost of lending. To make that change, ADF needs 75% of shareholders to approve by the end of 2025 — it currently has 67% on board.

In addition to the markets, AfDB is also looking to new donors — sovereign donors, particularly from the Gulf states, that haven’t participated before, and nonsovereign donors as well.

One of the big questions is also how will the traditional donors show up? The report to Congress about U.S. participation at MDBs doesn’t offer a lot of insight on a U.S. contribution to ADF, but does say it will participate in the replenishment negotiations “to advance the Administration’s priorities, including energy access and procurement reform.”         

Read: New contributors and market access inch onto ADF’s agenda

See also: New AfDB president inherits a bigger bank — and tougher challenges                           

A decade investing in women

That’s how many women entrepreneurs, across 59 countries, that the Women Entrepreneurs Opportunity Facility, a partnership between Goldman Sachs’ 10,000 Women initiative and the International Finance Corporation, have reached. The facility has provided $8.2 billion in cumulative loans to women entrepreneurs and unlocked $3.17 billion in investments since its launch in 2014.

“WEOF has shown that financing women-owned businesses at scale is not only possible but also profitable. By breaking down barriers, we’ve laid the foundation to create more jobs and support economic growth,” Mohamed Gouled, IFC’s vice president of industries, said in a statement.

There is also some new money to help women-led small and medium-sized businesses in Africa thanks to a new partnership between the African Guarantee Fund and Visa Foundation. They will scale the Affirmative Finance Action for Women in Africa initiative’s Guarantee for Growth program, which aims to address systemic inequities and eliminate barriers that women entrepreneurs face in accessing capital.

If you’re interested in gender-lens investing, there’s also a new report out from the Criterion Institute examining how the field has evolved in the past decade and what’s next.

What we’re reading

Iraq signs $1 billion investment deals with World Bank’s IFC. [AFP via Barron’s]

IFC and Brazil-based investment bank BTG Pactual to invest $1 billion in sustainability and development in Latin America. [ESG Today]

A mobilization machine: International corporate bonds in sub-Saharan Africa. [British International Investment]