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Opinion | How the IMF and World Bank can survive a world war on free markets
- China’s rise and US protectionism have raised questions about the Western economic model, which has helped cause turbulence in emerging economies
- IMF-World Bank meetings must encompass more global powers and not assume the superiority of current economic models – but seek more universal ones
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The IMF and World Bank were launched during the second world war at the 1944 Bretton Woods conference – now, they are back in a “world war”, only this time, it is a struggle for global influence chiefly between the US and China.
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Since their founding nearly 80 years ago, the Bretton Woods twins have achieved a global constituency in terms of their membership, but they are having to fight hard now to preserve their legitimacy in a rapidly changing world.
Geopolitical tensions have interfered with the functioning of many international organisations, transforming forums for cooperation into venues of competition, and could threaten the still-normal operation of the International Monetary Fund and World Bank. The pair are holding their annual meetings in Marrakech, Morocco.
The two have able defenders, as evidenced by recent reports from the Atlantic Council in Washington and the London-based think tank ODI, which spoke of the role both institutions can play in a changing world. But it is in capitals elsewhere that their future will be decided.
The IMF and World Bank find themselves no longer in a Western-dominated world where ideals of free trade and investment prevail, but instead, in one of growing regional rivalry among rising and increasingly competitive powers.
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Not only that. The Western model based on market economies has been challenged by the remarkable success of China’s state-led economy in achieving economic growth and poverty reduction, albeit at a cost to personal freedoms.
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