Yellen heads to Morocco IMF-World Bank meetings in shadow of US political chaos

Reuters | October 6, 2023

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By David Lawder

WASHINGTON (Reuters) – U.S. Treasury Secretary Janet Yellen heads to International Monetary Fund and World Bank annual meetings next week in Morocco to press U.S. priorities including increasing the institutions’ funding against a backdrop of political chaos in the U.S. Congress.

The Treasury said on Friday that Yellen will work at the meetings in the city of Marrakech to push forward reforms of the World Bank and other multilateral development banks she launched a year ago to expand their missions beyond poverty reduction to help tackle climate change and other global challenges.

Yellen also will press IMF member countries to contribute to increasing the Fund’s quota-based lending resources without any changes to its shareholding structure that would give more weight to large emerging market countries such as China, India and Brazil.

A U.S. Treasury official also said Yellen would argue for countries and institutions at the meetings to provide as much funding as Ukraine needs to battle Russia’s invasion.

But Yellen’s trip, which includes a subsequent stop in Luxembourg for a Eurogroup finance ministers’ meeting on Oct. 16, comes on the heels of a U.S. funding crisis that saw Congress narrowly averting a federal government shutdown with a temporary funding measure that failed to include requested funds for Ukraine.

Hardline Republicans in Congress also led a revolt that resulted in the unprecedented ouster of a House of Representatives speaker, Kevin McCarthy. The effort to replace McCarthy could delay more permanent spending and other legislation.

Representative Nikki Budzinski, an Illinois Democrat, said she was concerned about the image of “instability and chaos” at home as Yellen presses U.S. interests abroad.

“I think everyone around the world pays attention. America leads and this does not go unnoticed,” Budzinski told Reuters.

Asked if the drama in Congress undermined Yellen’s message, the Treasury official said that she has credibility on the world stage because she has been able to deliver on issues like rallying support for Ukraine.

The official said that IMF and World Bank funding packages the Treasury has proposed should have some bipartisan appeal in Congress. The Biden administration has been seeking to portray the institutions as alternatives to borrowing from China for countries.

“More broadly, across the range of issues, we just have to go in and talk to our partners,” the official said. “They understand every country has its own politics, and everyone understands that, and so you just have to try to accomplish what you can and talk to your partners while you’re there.”

The official said that in Luxembourg, Yellen will discuss with EU counterparts ways to better align the U.S. and European approaches to China’s economic practices.

Yellen made clear during a July visit to Beijing that the Biden administration seeks healthy competition with China based on a level playing field, but will not hesitate to protect its national security interests and “de-risk” its supply chains.

Asked whether Yellen would meet Chinese officials while in Marrakech, the official declined to comment on her schedule of bilateral meetings.


(Reporting by David Lawder and Andrea Shalal; editing by Robert Birsel)