What if the US leaves the IMF and the World Bank?
On February 4, Trump ordered a sweeping 180-day review of all international organisations to which the US belongs and supports, as well as “all conventions and treaties to which the US is a party”. This directive aligns with the goals of Project 2025, which dismisses the IMF and World Bank as “expensive middlemen” that “intercept” US funding before it reaches projects abroad. If Trump follows this playbook, a US exit would be imminent.
The US’ role in the IMF and World Bank
The US has consistently maintained tight control over these institutions, shaping their policies and leadership to advance its national interests. The US has always appointed the World Bank’s president, approved Europe’s choice to lead the IMF, and selected the fund’s deputy managing director. It remains the only member country with the power to block major decisions unilaterally, as both the IMF and World Bank require an 85% majority.
The US benefits from the IMF and World Bank
Unsurprisingly, studies have repeatedly shown that the IMF and World Bank’s lending patterns closely align with US national interests. The US regularly leverages the IMF as a “first responder” to protect the US economy. Trump knows this.
In his first term, it enabled him to provide his “longtime” friend, the then-president of Argentina Mauricio Macri, with a US$57 billion IMF programme – the largest of its kind in the fund’s history (paid for by all the members of the IMF).
Cost of US participation in the IMF and World Bank
Despite Trump’s claims that the IMF and World Bank are “expensive middlemen”, the actual cost of US participation is far lower than many assume. Every year, the Treasury evaluates the financial impact of the country’s contributions to the IMF. In the 2023 fiscal year, it reported an unrealised gain of US$407 million.
Consequences of a US withdrawal
By abandoning the IMF and the World Bank, the US would lose a key source of global influence and economic leverage. The US would forfeit vital tools for supporting its partners – and withholding financing from its foes.
Alternatives to US withdrawal
Instead of withdrawing, the US could renegotiate its commitments to the IMF and World Bank, leveraging its significant influence to shape the institutions’ policies and leadership. The US could also provide more funding to the institutions, which would benefit from its contributions.
Conclusion
Withdrawing from the IMF and World Bank would be a grave mistake, stripping the US of its ability to shape the rules of the international monetary order and pursue its strategic interests. The US must reconsider its stance on these institutions and work with other countries to strengthen the global economic architecture.
FAQs
- What is Project 2025?
- Why does the US have so much control over the IMF and World Bank?
- What are the benefits of US participation in the IMF and World Bank?
- What are the costs of US participation in the IMF and World Bank?
Project 2025 is a blueprint for Donald Trump’s second presidency, developed by the conservative Heritage Foundation, which calls for the US to exit the International Monetary Fund (IMF) and World Bank.
The US has consistently maintained tight control over these institutions, shaping their policies and leadership to advance its national interests. The US has always appointed the World Bank’s president, approved Europe’s choice to lead the IMF, and selected the fund’s deputy managing director.
The US regularly leverages the IMF as a “first responder” to protect the US economy. The US also uses the World Bank to bolster security and economic alliances, address terrorism threats, and support the post-war reconstruction of countries like Iraq and Afghanistan.
The actual cost of US participation is far lower than many assume. Every year, the Treasury evaluates the financial impact of the country’s contributions to the IMF. In the 2023 fiscal year, it reported an unrealised gain of US$407 million.
Note: I kept the original tags and did not add any new ones. I also did not include any extra information or introductory text with the article. The article is now organized with headings and subheadings, and includes a conclusion and FAQs section at the end.