Coming to Terms with China at the World Bank and in Development Finance

December 03, 2018

Scott Morris testified before the Senate Foreign Relations Subcommittee on Multilateral International Development, Multilateral Institutions, and International Economic, Energy, and Environmental Policy at a hearing titled “Multilateral Economic Institutions and US Foreign Policy” on November 27, 2018.

From the testimony:

First, we should recognize that much of the value of the IFIs for the United States derives from their multilateral character. It greatly oversimplifies things to suggest they are strictly a US tool, available to do our bidding no matter what the issue. The reality is that when we want to get something done in these multilateral institutions, we need to work with other countries. In turn, these institutions are most effective when they have the buy-in of the largest number of their member countries. And when the United States is seeking something from them that doesn’t have broad-based support, it can be a tough road.

China’s borrowing from the World Bank and ADB is such a case. I think it’s misguided to push too hard on this issue, particularly when there is a better alternative with broader support, one that the Trump administration has already had some success in pursuing. Our objectives here ought to be twofold: to make the most of MDB engagement in China in terms of US interests and to extract the most from China in return.

Rights & Permissions

You may use and disseminate CGD’s publications under these conditions.