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Well, we got the answer to the big question last week: Will the Trump administration diminish its membership in the World Bank — or leave it altogether?
The answer: They are “eager” to work with the World Bank and the International Monetary Fund, but think the institutions are off track and need to make reforms.
That’s according to U.S. Treasury Secretary Scott Bessent. In a lengthy speech last week, he quelled some fears that the U.S. might withdraw, at least for now.
We’ll get more into Bessent’s speech and how U.S. policy priorities were reflected at the World Bank–IMF Spring Meetings, but first, an update about the Millennium Challenge Corporation — the U.S. aid agency that focuses on economic growth, largely by supporting large infrastructure projects.
Dodging DOGE?
Last week I broke the news that MCC staff had been told by Elon Musk’s Department of Government Efficiency, or DOGE, that the vast majority of its large grants — called “compacts” — would be shut down and there would be significant staff reductions.
But it quickly emerged that maybe not all parts of the government were on the same page. The White House Office of Management and Budget had given the agency a budget for the 2026 fiscal year, and there had been some discussions about moving MCC and the U.S. International Development Finance Corporation, or DFC, into the same office space, sources tell me.
That lack of coordination — and rumors that U.S. Secretary of State Marco Rubio may not have known about the move to effectively shutter MCC before DOGE went ahead — seemed to provide a narrow opening to potentially save the agency. While it could be a fait accompli, I’m told there have been efforts underway to spare MCC.
What the agency might look like is unclear. It’s possible it could be smaller. It’s possible it could merge into DFC, as some earlier proposals have suggested. It’s also possible MCC staff will take the resignation and early retirement offers en masse, which could make it hard to continue operations if the agency is spared from DOGE’s ax. The deadline for them to make decisions on those offers has been extended into next week, sources tell me.
Watch this space. I’ll have more on MCC as this story unfolds, including the potential impacts: from damaging trust with partner countries, to half-finished infrastructure projects, to an easy opening for China to take over projects, claim them as their own, and paint the U.S. as an unreliable partner, sources tell me.
ICYMI: Elon Musk’s DOGE takes aim at Millennium Challenge Corporation
Explore the data: MCC in numbers — the grants, countries, and programs at stake (Pro)
Background reading: 20 years of MCC — how big dreams faced tough realities (Pro)
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Back to the bank …
So what exactly did Bessent say? “The IMF and the World Bank have enduring value. The mission creep has knocked these institutions off course. We must enact key reforms to ensure the Bretton Woods institutions are serving their stakeholders, not the other way around.”
And he went into some detail about reforms for both institutions: For the bank, a focus on economic growth, increasing private investment, and supporting job creation.
Job creation tracks with the theme of the Spring Meetings, and I dove into what exactly a focus on jobs means for the bank, though there are still some open questions on data, goals, and changes.
Bessent also called for a return to the core mission — efficiency and effectiveness. And no “rapid buzzword-centric marketing accompanied by half-hearted commitments to reform.”
And an “all-of-the-above” energy strategy that includes nuclear energy. On that note, the development committee’s statement — the traditional final outcome document of the meetings — included support for exploring more options to increase affordable and reliable energy, including nuclear power. Expect the bank’s board to take up the energy policy in June.
The statement also notably mentions another issue high on Bessent’s to-do list: The bank’s graduation policy. It recognized “the value of a balanced graduation policy” while Bessent called specifically for China to no longer be a World Bank borrower.
Read: US Treasury Secretary — US will stay engaged with World Bank, IMF
ICYMI: Is this the moment for nuclear energy at the World Bank?
See also: The World Bank is focused on jobs, what does that mean?
🎧 Listen to our podcast: Recapping the World Bank-IMF Spring Meetings
I dunno about IDA
One thing Bessent kept mum about however is where the U.S. contribution to the bank’s International Development Association, or IDA, its fund for the poorest countries, will land.
Between U.S. and U.K. contributions still being up in the air, there are some questions about just how big IDA21 will be. But after some delays, the IDA21 report, including its policy framework, is officially out and the World Bank shared them with borrowing countries last week, ahead of the new lending period kicking off July 1. The goal: Investing in the future of people and the planet “with renewed scale, effectiveness, and financial efficiency.”
But there was some news on IDA contributions. Ireland pledged €141.4 million ($160.9 million) to IDA, a 33% increase. And Italy publicly shared the pledge it made back in December — an increase of 25%, as it signed an agreement with the bank to advance sustainable development in Africa.
Related: World Bank calls IDA pledges a win. Critics aren’t so sure
One big number
16.7%
—That’s how much of African government revenues went to service debt in 2023, marking the largest increase among developing regions, according to a new report by the Institute of Economic Justice, a think tank focused on advancing economic justice and the equitable distribution of resources.
A new debt restructuring playbook was released last week to guide countries on how to assess debt sustainability, whom to hire on legal and financial issues, and how to engage early with creditors.
While some thought it might be helpful, Eurodad’s Jean Saldanha says: “Global South countries and civil society have asked for a rules-based debt workout mechanism and all that we got this week is a six-page instruction paper with a text so simple that if someone sitting in a Ministry of Finance does not already know what's in the Playbook, they are in the wrong job,” adding that it was a slap in the face to some countries.
Read: US tariffs threaten to push debt-distressed nations closer to the brink
Cities get a seat at the table
City leaders across the world celebrated a small milestone during the World Bank-IMF Spring Meetings last week. After several years of campaigning for more direct support for urban resilience, a group of six multilateral development banks — including the African Development Bank, Asian Development Bank, Asian Infrastructure Investment Bank, European Bank for Reconstruction and Development, Inter-American Bank, and the World Bank Group — met with the MDB Cities Group last week.
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“It means we have a seat at the table,” Nasiphi Moya, executive mayor of Tshwane in South Africa, tells my colleague Jesse Chase-Lubitz. Moya says that cities are getting on the same page about the climate crisis and understanding the responsibility they have, but they need to be able to access funding.
The meeting addressed the regulatory hurdles keeping cities from accessing MDB funding, what skills are required of cities to prepare projects, and the political will and leadership necessary in the communities to make sure that these solutions will be successful, Moya and others tell Jesse. It’s part of a broader push by city leadership to speak with one voice and seek more engagement with MDBs.
“Given what has happened in the world, we will either hang together or be hanged separately,” Anyang' Nyong’o, governor of Kisumu in Kenya, tells Jesse. “We must utilize various levels of government and various capacities to respond to climate change. It must be a joint problem between national governments and cities.”
Don’t miss: Climate goals quietly survive at the World Bank despite Trump tensions
A recap of the meetings: The World Bank Spring Meetings go quiet on climate
What we’re reading
African Development Bank presidential hopefuls outline competing visions. [Devex]
70 is the new 50: World Bank raises complexities of tackling aging. [Devex]
Saudi Arabia and Qatar to pay off Syria’s $15 million debt to the World Bank. [New York Times]
Jesse Chase-Lubitz contributed to this edition of Devex Invested.
About the author
Adva Saldinger@AdvaSal
Adva Saldinger is a Senior Reporter at Devex where she covers development finance, as well as U.S. foreign aid policy. Adva explores the role the private sector and private capital play in development and authors the weekly Devex Invested newsletter bringing the latest news on the role of business and finance in addressing global challenges. A journalist with more than 10 years of experience, she has worked at several newspapers in the U.S. and lived in both Ghana and South Africa.
