IMF chief pledges reform amid new U.S. policy pressures
IMF chief Kristalina Georgieva said on Thursday that the Fund will implement Washington's suggestions regarding its policy. The day before, U.S. Treasury Secretary Scott Bessent criticized the IMF and the World Bank, stating that both institutions need to earn the trust of the White House.
The head of the International Monetary Fund emphasized that her agency values the opinion of the U.S., the largest stakeholder in the Fund. Additionally, Georgieva mentioned that she personally appreciates Bessent's supportive remarks.
It should be noted that the Treasury Secretary remarked on Wednesday that Georgieva and World Bank President Ajay Banga are "good leaders," but they need to gain the trust of the administration of U.S. President Donald Trump. Bessent also mentioned that both agencies have deviated from their core missions by focusing more on issues like climate change.
Problematic climate
Georgieva addressed these comments in her Thursday speech, clarifying that the IMF doesn't employ specific climate experts but rather addresses issues related to climate change. This approach is due to the difficulties faced by countries experiencing severe problems from climate change and needing macroeconomic assistance from the Fund.
Similar to Georgieva, Bessent delivered his Wednesday speech on the sidelines of the IMF and World Bank spring session. He advocated for significant reforms in both institutions but emphasized that the U.S. intends to stay actively involved in the activities of international economic organizations, as reported by "The New York Times."
The newspaper noted that Bessent's speech, and his subsequent discussions with journalists, confirmed that Washington does not plan to withdraw from the IMF and World Bank, which provided reassurance to many politicians. Previously, there was concern that Trump might not uphold commitments to these organizations.
Last week, Georgieva assessed that the tariffs initiated by Trump and the trade tensions he sparked will negatively impact the global economy and lead to a significant slowdown this year, although not a recession.
Addressing this assessment, the Fund's chief stated on Thursday that countries should "very quickly" resolve tariff-related and trade issues, as the trade war poses a threat to the global economy.
Georgieva expressed particular concern for countries in the Association of Southeast Asian Nations (ASEAN) and Africa. However, she noted that if global trade continues to decline, these countries might concentrate on regional trade exchanges.
Georgieva also highlighted that "uncertainty is bad for business," offering a subtle critique of Trump's policies, which have caused concern among entrepreneurs and investors.
