US President Joe Biden to Propose World Bank and IMF Remodeling at G20 Summit

US President Joe Biden will propose this week to the leaders of the G20 a remodeling of the world Bank (BM) and from International Monetary Fund (FMI) with the aim of offering developing economies an alternative to loans “coercive” of China.

Biden, who will leave this Thursday for the India to participate in the G20 over the weekend, wants to demonstrate to the so-called “Global South” that this forum is capable of proposing solutions to the problems it faces, White House National Security Adviser Jake Sullivan said at a recent press conference.

The US proposal comes at a time when ChinaThrough bilateral agreements, it has become the main creditor of numerous emerging countries, some of which are mired in serious economic crises due, in part, to Beijing’s unwillingness to restructure the debts contracted.

Faced with this situation, Biden will defend in the G20 the modernization of FMI and the BM in order to offer developing countries “loans transparent” and of “high quality,” according to Sullivan.

To convert back to FMI y al BM in the main creditors of the “Global South”, Washington wants those credit agencies to be able to offer more loans and that the countries of G20 commit to increase their financing capacity by 200,000 million dollars over the next decade.

USA believes that it is in a good position to achieve these remodelings because it is the largest shareholder of the BM and the FMI. In addition, he managed to get elected this year as president of the world Bank the Indian-American Ajay Banga, who aims to combat poverty and climate change.

It’s not about going against Chinabut to give alternatives

On several occasions, Sullivan has emphasized that this remodeling is not directed against Chinabut it has recognized that it seeks to offer alternatives to their “coercives” loans through its “One Belt, One Road” strategy, launched in 2013 by the Chinese president, Xi Jinping, to expand the influence of the Asian giant in the world.

This Chinese initiative materialized in large loans for infrastructure development in countries like Zambia, which had to declare bankruptcy in 2020 after accumulating a debt of 17,000 million dollars but reached an agreement with Beijing in June to restructure that indebtMainto.

Other countries, such as Sri Lanka, Ghana, Tunisia, El Salvador and Kenya, are also facing problems paying their bills. debts.

The risk of default could have serious consequences for the global economy. That’s why, USA and other countries want, in addition to the remodeling of the BM and the FMIhe G20 serve to advance in the creation of a framework of restructuring from debt that can be applied to several countries.

China has been skeptical and has made it clear that it prefers a “case by case” approach to prioritizing its strategic interests, such as access to hydrocarbonsaccording to economist Hung Tran, former “number two” in the financial markets department of the FMI.

The relevance of G20 against other forums, such as BRICS

In a broader context, Biden’s participation in the summit of the G20 seeks to reinforce the geopolitical profile of that forum, after the group of emerging economies of the BRICS (Brazil, Russia, the India, China and South Africa) will agree in August to include six new partners in 2024: Saudi ArabiaArgentina, Egypt, United Arab Emirates, Ethiopia and Iran.

With that in mind, Biden also wants the summit serve to search solutions a la crisis climaticaddress the challenges of artificial intelligence and combine positions on the war in Ukraine, in an attempt that the G20 can post a announcement whole about it.

The Group of Twenty failed to issue a announcement set in his summit last year in Bali and had to be content with a “statement of leaders” which reflected the views of most of their countries.

Meeting with Modi one day before the summit

The White House has already confirmed that on Friday, the eve of the summitBiden will meet with the prime minister of the IndiaNarendra Modi, who acts as host.

It remains to be seen if he will see others leaders as the president of TürkiyeRecep Tayyip Erdogan, or the Saudi crown prince and prime minister, Mohamed bin Salmán, something that could be decided at the last minute, the White House warned.

Particularly relevant would be a meeting with Bin Salmán, since USA is trying to Israel y Saudi Arabia normalize relations, which could open the door to some kind of solution to the Israeli-Palestinian conflict and would revolutionize the game board in the region.

The last day of G20on Sunday, Biden plans to travel to Vietnam with the aim of strengthening diplomatic relations with this former adversary and establishing a “strategic partnership” that would allow Hanoi to improve its semiconductor production, another area of ​​contention between China y USA.