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Time of India
26-04-2025
- Business
- Time of India
‘If you delay, it hurts everyone': World Bank chief Ajay Banga warns developing nations to act quickly on trade with US
File photo: World Bank President Ajay Banga (Picture credit: PTI) World Bank President Ajay Banga on Friday urged developing countries to strike trade deals with the United States as soon as possible, warning that delays could hurt all parties. During the World Bank and IMF Spring Meetings in Washington, Banga was quoted by news agency AFP saying, 'You need to negotiate trade systems with the US at the earliest possible opportunity. If you delay, it hurts everyone.' His comments come amid growing uncertainty over US trade policy , driven by US President Donald Trump's erratic imposition of tariffs . Since returning to power in January, Trump has introduced a baseline 10 per cent tariff on most countries, along with targeted 25 per cent levies on imports like steel, aluminium, and cars not made in the US. Higher duties against several nations, justified on trade imbalance grounds, are currently paused. The World Bank has been advising developing nations to quickly formalise trade agreements with the US and then shift focus to reducing trade barriers and encouraging regional commerce . Banga also backed US treasury secretary Scott Bessent's recent criticism of China's ongoing status as a World Bank development borrower. 'I don't think he's wrong,' Banga said, adding that China, given its economic size and strength, should eventually stop borrowing from the International Bank for Reconstruction and Development (IBRD). by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Villas For Sale in Dubai Might Surprise You Villas In Dubai | Search Ads View Deals Undo China borrowed around $750 million last year from the IBRD while also contributing significantly to repayments and donations. 'I've brought it down to 750 (million), and I'm trying to figure out a way to deal with China to bring it down further,' Banga said, though any change would require executive board approval. Banga also responded to US critiques of the World Bank's policies as 'expansive,' calling such scrutiny normal for newly elected governments and adding, 'There's nothing wrong with it.' On energy access, Banga highlighted the Bank's goal to help connect 300 million people in sub-Saharan Africa to electricity by 2030. He stressed the importance of affordable and reliable power, noting that while the Bank currently hesitates to fund nuclear and gas projects, these options may be considered when its energy strategy is reviewed in June. Finally, he called for job creation in developing countries through local initiatives, not just outsourcing, warning that such imbalances are already fuelling political shifts in advanced economies. Stay informed with the latest business news, updates on bank holidays and public holidays . Master Value & Valuation with ET! Learn to invest smartly & decode financials. Limited seats at 33% off – Enroll now!
Japan Times
26-04-2025
- Business
- Japan Times
Developing countries should fast-track U.S. trade deals, World Bank chief says
Developing countries should strike swift trade deals with the United States at the "earliest possible" opportunity, the president of the World Bank said Friday, after a busy week with global financial leaders in Washington. Ajay Banga was interviewed at the World Bank and International Monetary Fund's Spring Meetings, which have been held this year under a cloud of uncertainty about U.S. President Donald Trump's stop-start tariff rollout. The Bank has been advising developing countries to get a deal done quickly with the United States, and to then focus attention on cutting trade barriers and boosting regional flows of goods, Banga said. "You need to negotiate trade systems with the U.S. at the earliest possible (opportunity)," he said. "If you delay, it hurts everyone." Trump's tariffs have roiled financial markets, sent volatility surging and spooked investors and consumers. Since returning to office in January, the U.S. leader has imposed a "baseline" 10% tariff on most countries, with much higher duties on China, and 25% sector-specific levies on areas including steel, aluminum, and automobiles not manufactured in the United States. He also introduced much higher tariffs on dozens of countries — which have since been temporarily paused — accusing them of having an unfair trade balance with the United States. Banga also addressed the criticism leveled by U.S. Treasury Secretary Scott Bessent at the Bank earlier this week. Bessent criticized China's "absurd" developing country status and called on Banga and IMF Managing Director Kristalina Georgieva to "earn the confidence of the administration." "I don't think he's wrong," Banga said of Bessent's comments on China. "A country that is the size of China and the capability of China, at some point, should no longer be taking money from IBRD," he said, referring to the International Bank for Reconstruction and Development — an arm of the World Bank that lends largely to middle-income countries. Such a move would require the support of the World Bank's executive board, which is made up by member states. China, Banga said, borrowed around $750 million from the IBRD last year, while paying billions of dollars to the institution in repayments and donations. "My view is, I've brought it down to 750 (million), and I'm trying to figure out a way to deal with China to bring it down further," he said. "I want to get it done. And that's what I'm talking to the Chinese about." Banga said the Trump administration's criticisms of the World Bank, which included "expansive policy overreach," were not unusual, citing newly elected governments in countries including France, Japan and Korea. "I keep telling people this is a perfectly constructive request, to say, tell me and show me that you guys are the kind of people that advance the interests of my taxpayer, of my country," he said. "I take it in that spirit," he said. "There's nothing wrong with it." Since taking the helm of the Washington-based development lender in 2023, Banga has pushed to streamline operations and encourage private sector participation, while focusing on job creation and electricity connectivity. Among the Bank's current priorities is a push with the African Development Bank to connect 300 million people in sub-Saharan Africa to electricity by 2030 — a process that will require a vast amount of new energy to be brought online. "You should try and get (energy) in the best, accessible way and the lowest possible cost," Banga said, suggesting that in addition to renewable power, nuclear and gas could help provide a base load — two energy sources the World Bank is currently hesitant to finance. The Bank's executive board is set to discuss its energy strategy in June, Banga said, adding that funding for both nuclear and gas would likely be on the agenda. Banga said the Bank is also pushing to encourage private sector job creation in developing countries — beyond simply outsourcing jobs from advanced economies. "Because then you end up with challenges in (advanced economies), and you can see that people are speaking about them with their votes," he added.
France 24
26-04-2025
- Business
- France 24
Developing countries should fast-track US trade deals: World Bank president
Ajay Banga was interviewed by AFP at the World Bank and International Monetary Fund's Spring Meetings, which have been held this year under a cloud of uncertainty about President Donald Trump's stop-start tariff rollout. The Bank has been advising developing countries to get a deal done quickly with the United States, and to then focus attention on cutting trade barriers and boosting regional flows of goods, Banga said. "You need to negotiate trade systems with the US at the earliest possible (opportunity)," he said. "If you delay, it hurts everyone." Trump's tariffs have roiled financial markets, sent volatility surging and spooked investors and consumers. Since returning to office in January, the US leader has imposed a "baseline" 10 percent tariff on most countries, with much higher duties on China, and 25 percent sector-specific levies on areas including steel, aluminum, and automobiles not manufactured in the United States. He also introduced much higher tariffs on dozens of countries -- which have since been temporarily paused -- accusing them of having an unfair trade balance with the United States. Bessent 'not wrong' on China Banga also addressed the criticism leveled by US Treasury Secretary Scott Bessent at the Bank earlier this week. Bessent criticized China's "absurd" developing country status and called on Banga and IMF Managing Director Kristalina Georgieva to "earn the confidence of the administration." "I don't think he's wrong," Banga said of Bessent's comments on China. "A country that is the size of China and the capability of China, at some point, should no longer be taking money from IBRD," he said, referring to the International Bank for Reconstruction and Development -- an arm of the World Bank that lends largely to middle-income countries. Such a move would require the support of the World Bank's executive board, which is made up by member states. China, Banga said, borrowed around $750 million from the IBRD last year, while paying billions of dollars to the institution in repayments and donations. "My view is, I've brought it down to 750 (million), and I'm trying to figure out a way to deal with China to bring it down further," he said. "I want to get it done. And that's what I'm talking to the Chinese about." Banga said the Trump administration's criticisms of the World Bank, which included "expansive policy overreach," were not unusual, citing newly elected governments in countries including France, Japan and Korea. "I keep telling people this is a perfectly constructive request, to say, tell me and show me that you guys are the kind of people that advance the interests of my taxpayer, of my country," he said. "I take it in that spirit," he said. "There's nothing wrong with it." Energy at 'lowest possible cost' Since taking the helm of the Washington-based development lender in 2023, Banga has pushed to streamline operations and encourage private sector participation, while focusing on job creation and electricity connectivity. Among the Bank's current priorities is a push with the African Development Bank to connect 300 million people in sub-Saharan Africa to electricity by 2030 -- a process that will require a vast amount of new energy to be brought online. "You should try and get (energy) in the best, accessible way and the lowest possible cost," Banga said, suggesting that in addition to renewable power, nuclear and gas could help provide a base load -- two energy sources the World Bank is currently hesitant to finance. The Bank's executive board is set to discuss its energy strategy in June, Banga said, adding that funding for both nuclear and gas would likely be on the agenda. Banga said the Bank is also pushing to encourage private sector job creation in developing countries -- beyond simply outsourcing jobs from advanced economies. "Because then you end up with challenges in (advanced economies), and you can see that people are speaking about them with their votes," he added. © 2025 AFP
Yahoo
11-02-2025
- Business
- Yahoo
Moody's warns World Bank's triple-A rating threatened if Trump pulls support
By Marc Jones LONDON (Reuters) - The triple-A ratings of the World Bank and other top multilateral lenders would be at risk if U.S. President Donald Trump slashed his country's support for them, credit rating agency Moody's has warned, adding such a move was unlikely. Last week, Trump signed an Executive Order to review U.S. government support to all international intergovernmental organisations of which it is a member and to withdraw from some United Nations organisations. "The US is a key shareholder in a number of rated MDBs (multilateral development banks), hence it would be credit negative if it materially reduced its commitment to them," Moody's said in a report published on Monday. The U.S. is the single biggest shareholder in the World Bank Group's institutions, with a 16.4% share in its largest, the International Bank for Reconstruction and Development (IBRD), and a 19% stake in International Development Association (IDA) which provides concessional loans and grants to the world's poorest countries. The World Bank declined to comment on the Moody's note. It has an even higher 30% share in the Inter-American Development Bank in Latin America, a 15.6% stake in the Asian Development Bank and 10% in the European Bank of Reconstruction of Development that was set up in the wake of the Cold War. The Trump-ordered review of Washington's support for development banks is due to take roughly six months. The set-ups of most of the institutions allow for an "orderly withdrawal" of a shareholder. Moody's said it was "unlikely that the U.S. would take drastic steps regarding its participation in key MDBs," for several reasons, including the loss of influence over those institutions' lending policies. In the World Bank's case, the U.S. has paid in capital of around $3.7 billion in the IBRD and has callable capital commitments of $49.2 billion, compared to disbursed and outstanding IBRD loans and guarantees of around $263 billion. The average maturity of the IBRD's loan portfolio is 8.4 years although some loans are for up to 50 years meaning that, "the US would remain on the hook for IBRD's lending portfolio for many years to come," Moody's said. A withdrawal would also open the door for other countries to fill the void, something unlikely to fit with Trump's geopolitical strategy. "Those shareholders in particular include China, which has long coveted a larger share in the IBRD, a desire strongly opposed by consecutive U.S. governments," Moody's said. Sign in to access your portfolio
