Bessent Urges IMF and World Bank to Act on China and Critical Minerals

On October 15 (Eastern Time), U.S. Treasury Secretary Scott Bessent called for the International Monetary Fund (IMF) to strengthen objective oversight centered on macroeconomic and financial stability, and he urged the IMF to examine the industrial policies of major economies, including China, and recommend corrective actions. He also pressed the World Bank to prioritize national self-reliance by implementing its graduation policy, cease aid to China, and reallocate personnel and resources to poorer countries with more urgent development needs. Bessent emphasized that building resilient supply chains for critical minerals is a U.S. priority and welcomed the World Bank’s related strategic efforts while encouraging investment and technical assistance to diversify and fortify those supply chains.

The Treasury statement framed these recommendations within a broader U.S. agenda of domestic economic reforms, emphasizing tax relief, abundant energy supply, and regulatory modernization as interlinked drivers of growth and domestic manufacturing. It noted recent institutional adjustments at the IMF and World Bank, including the IMF’s organizational refocus toward macro‑financial and structural policy and the World Bank’s reversal of its nuclear‑energy financing ban and procurement reforms, but urged both institutions to take further coordinated steps to concentrate on core mandates and maximize impact for member countries and taxpayers.

Bessent criticized a weakening of the IMF’s traditional surveillance role and called for more rigorous, objective monitoring that highlights internal and external imbalances. He argued that IMF analysis should more clearly assess how industrial policies in large economies, such as China’s, contribute to global imbalances and harmful spillovers, and that the IMF’s forthcoming comprehensive surveillance review should embody this approach. He emphasized that IMF programs must be carefully designed to restore macroeconomic stability, require meaningful reforms, and avoid creating long‑term dependency on IMF financing, with loan sizes and disbursement schedules aligned to the scope of underlying reforms.

On debt distress, Bessent stressed the need for fair burden‑sharing, warning against allowing noncooperative creditors to evade responsibility and stressing that IMF resources should not become a backstop for lenders that refuse to absorb losses. He also highlighted the necessity of governance, anti‑corruption measures, and robust safeguards as foundations for effective loan programs and sustainable, private‑sector‑led growth.

Regarding the World Bank, Bessent urged a reorientation toward investments that expand access to affordable, reliable energy, reduce poverty, and foster growth, arguing that the institution should prioritize policies that enable private‑sector development and national graduation from multilateral support. He explicitly recommended ending financial support to China and redeploying staff and administrative capacity to countries with greater development needs, while continuing International Development Association (IDA) assistance aimed at helping nations transition to IBRD eligibility. He advocated closer IMF–World Bank coordination during IDA‑21 to enhance macroeconomic stability, growth, private‑sector development and job creation, and called for improved debt management and transparency alongside expanded access to affordable energy.

Bessent called for the World Bank to fund all affordable and reliable energy sources, including natural gas, oil and coal, and to abandon the 45 percent climate co‑benefit financing target, which he said distorts project selection and diminishes access to growth‑enabling energy. He welcomed the World Bank’s decision to permit financing for nuclear power and urged continued capacity building, industry engagement and technical support for clients in need of such investments.

On critical minerals, Bessent underscored their strategic importance for growth and technology and warned that concentrated supply chains are vulnerable to disruption or manipulation. He urged the World Bank to prioritize a strategy that supports diversification and resilience in critical minerals through investment and technical assistance.

Bessent also addressed procurement reforms, observing that well‑designed procurement can build local capacity, enhance skills and maximize development outcomes. He encouraged the World Bank to extend mandatory quality‑focused procurement practices, diversify suppliers to mitigate risk, promote competitive pre‑tendering outreach, and improve procurement data to drive better results. He warned that failure to curb anti‑competitive procurement behavior by state‑owned enterprises and to exclude noncommercial state actors from Bank‑funded procurement would undercut these reforms.

Emphasizing the United States’ enduring commitment to Bretton Woods institutions, Bessent said governance and quota allocations must reflect members’ roles and responsibilities in the global economy. He supported congressional approval of the IMF’s 16th quota review to bolster the Fund’s resources and argued that future governance discussions should be grounded in a revised quota formula. He also urged resolution of outstanding equity adjustment issues at the World Bank in the 2025 review.

Finally, Bessent called for fiscal discipline within both institutions, noting the need to restrain administrative expansion and personnel costs, and he applauded the World Bank’s achievement of zero real budget growth for the year. He urged continued budgetary restraint, greater transparency around budget composition, and freezes on compensation for board members and senior management, asserting that these measures would help ensure that resources are focused on core missions.

Bessent concluded by reaffirming that “America First” does not imply unilateralism, and expressed the United States’ readiness to work with shareholders and management to restore the IMF and World Bank to their founding missions.