Trump’s quest to undermine multilateral development banks
INthepost-warera,themultilateraldevelopmentbankswerecreatedtofacilitateglobaltrade.Today,theyare ‘AmericaFirst’targets.
RECENTLY, the White House has been pushing its America First stance in the World Trade Organization (WTO) by controversial appeals to a “national security exception.” In response to the Trump tariffs, several WTO members have brought dispute settlement cases against the US.
Reportedly, the White House will announce David Malpass as the nominee for President of the World Bank, after Jim Yong Kim’s
year term in 2022.
In the 2016 election, Malpass served as Trump’s economic advisor. A year later he was appointed undersecretary for international affairs in the US Department of the Treasury. But he is an odd choice to head the World Bank – a bit like selecting a coal CEO to head the struggle against climate change.
An ‘America First’ World Bank
Like US Representative of Trade Robert Lighthizer, Malpass began his political career in the 1980s Reagan administration seeking to contain the rise of Japan through the Section 301 of the 1974 Trade Act; the same unilateral legislation Trump is exploiting against China in the current trade dispute.
During his 15 years as chief economist at Bear Stearns, Malpass was not known for his economic foresight. A year before the global crisis, he wrote that “housing- and debt-market corrections will probably add to the length of the US economic expansion.” And amidst lingering crisis, he urged for higher interest rates.
During his tenure as undersecretary of the treasury for international affairs, Malpass has taken an aggressive position against China. In early 2018, he slammed China’s “non-market behavior” advocating stronger responses. When Trump tariff wars began, some 20 career staff quit Malpass’ unit in less than a year, opposing the administration’s unilateral trade policies and Malpass’ poor leadership style.
To Malpass, the World Bank is a “giant sprawl” of international organizations that create “mountains of debt without solving problems.” He promotes a new “debttransparency initiative” that would shed more light on the international liabilities of the world’s governments. Such an initiative would not target America’s $22 trillion pile of sovereign debt, but China’s Belt and Road Initiative (BRI). Evidently, he would like to subject China and its loans into a politicized scrutiny, effectively extending US investment reviews through the Bank.
Toward ‘America First’ IMF
Since the Bretton Woods, the president of the World Bank has been an American, while the International Monetary Fund (IMF) has been led by a European. Both institutions are located in Washington, D.C. and work closely with each other, as international extensions of the US Department of the Treasury - as critics contend.
Amid the 2008 crisis fall, IMF chief Dominique Strauss- Kahn managed to achieve G20 cooperation that contained the global free-fall. In exchange, advanced economies pledged commitment to global governance reforms in multilateral development banks. Yet, those reforms were ignored after Strauss-Kahn was replaced with French Finance Minister Christine Lagarde who has worked most of her professional career in the US.
The IMF’s economic stance is shifting toward Washington as well. Recently, Lagarde appointed Gina Gopinath as the IMF chief economist to succeed Maurice Obstfeld. Gopinath is a veteran US economist and co-director at National Bureau of Economic Research. In her most recent work, she has been an outspoken advocate of the US dollar whose dominance she expects to continue largely undisturbed.
Since 2011, BRICS economies (Brazil, Russia, India, China, and South Africa) have stressed that the selection of the IMF chief on the basis of nationality undermines its
legitimacy. Despite the 2010 cosmetic reforms, advanced economies continue to dominate World Bank voting shares over emerging economies ( ).
The World Bank comprises the International Bank for Reconstruction and Development
(IBRD), which provides loans to middle-income economies, and the International Development Association (IDA), which targets low-income economies.
From reforms to retrenchment
Since the early 2010s, China, along with many other major economies has been promoting the huge, multi-decade Belt and Road Initiative (BRI), the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank (NDB). The Obama administration took a skeptical view of all three initiatives, which the Trump administration has branded as “national security risks” to America.
As the World Bank may face a divisive political struggle, US interests are growing more prominent at the IMF, while the WTO has been targeted by trade hawks. Concurrently, attempts by emerging and developing economies to help themselves are shunned as security threats to American interests. Meanwhile, the West’s multilateral development banks are bailing out rich European economies, targeting poorer ones and sanctioning those that oppose Washington’s unilateralism.
There is a gap between the economic share of emerging economies and their voice in the international community. And it is deepening, even though emerging economies are growing relatively faster and their economic share will exceed that of advanced economies within a decade or two. That serves neither America’s nor emerging powers’ long-term interests. * Red: The share of seven largest emerging economies of total votes. Blue: The share of seven largest advanced economies of total vote.
communist regimes, whose electoral processes and rights record have often been criticized by the international community.
President Miguel Diaz-Canel took to Twitter last Monday to say that in about two weeks “we will have approved the Constitution we have made together for the good of all. Cuba will be a better country, more in sync with its time. #
Immediately, someone tweeted back: “My friend, so why have a referendum?”
The new Constitution is to replace one in force since 1976. The full draft was put before neighborhood and workplace assemblies for debate between August and November, and then was amended and approved at the end of December by the National Assembly.
The government considered that a vast exercise of democracy in the one-party state.
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recognizes the market, private property and foreign investment, providing a legal basis for Cuba’s economic opening that started 10 years ago. More than 590,000 Cubans, or 13 percent of the workforce, now work in the private sector.
left out changes that would have paved the way for legal same-sex marriage after opposition in local assemblies.
In 1976, the Constitution was adopted by referendum with an overwhelming vote of 97.7 percent in favor, according
Going to the polls is considered an act of sovereignty and of “revolutionary
is frowned upon.
Questioned about the referendum campaign, several passersby voiced such “revolutionary” sentiments, saying they are convinced by the “yes” campaign.
Sara Martinez Tamayo, 54, a doctor, sees it as a chance to “say ‘yes’ also to the Revolution.”
decried such “false allegations.”
A changing society
Cubans who want to demonstrate opposition at voting time typically spoil their ballots.
Even trying to send the slogan “
(I vote No) through telecommunications monopoly Etecsa via SMS is not possible, as the independent blog
One Twitter post likened the experience to visiting Coppelia, a favorite Havana ice cream shop, “and being able to
or vanilla.”
There was no internet when Cubans voted on the 1976 Constitution, but as of December the island became one of the last countries in the world to get 3G mobile internet services. Most Cubans can’t afford it, though, and will still head to the WiFi zones in public parks and squares that they have relied on for years.
However they access the net, some are using it to counter the government’s
Observatory of Human Rights displays a large “on a red background and lists 10 reasons to vote No, particularly because it is “legal” to do so.
Social networks have also seen a
transformed into No.
““
campaign is a response to voices online.
“The government’s worry is precisely the impact that (the No campaign) can have on the vote,” he said.
But “I think it must understand that society has changed, people start to think more freely, are informed in different ways...,and look at the internet.”