What will happen to the World Bank if Trump wins? asks ALEX BRUMMER

THE spacious headquarters of the World Bank and the International Monetary Fund (IMF) are separated from the White House by only a couple of blocks.

However, 80 years after these institutions were established, there is often tension in the relationship between the United States and the two institutions founded at Bretton Woods in 1944.

The United States largely ignores the Fund’s advice on economic policy.

Both US presidential candidates Kamala Harris and Donald Trump are ignoring this week’s guidance on how to reduce borrowing and debt to create fiscal reserves for future crises.

Both presumably depend on the resilience of US productivity and dollar demand to see them through.

Technically, the World Bank is America’s baby. The long tradition is that the United States elects the president of the World Bank and the Europeans elect the managing director of the IMF.

The election of the president of the World Bank is deeply political. No more so than in 2023, when Trump’s pick David Malpass resigned after a rigged dispute over alleged derogatory comments about climate change.

His successor, former credit card master Ajay Banga, a Biden appointee, has done a remarkable job keeping the United States on board.

Typically, when American officials decide to make public appearances at the IMF, it is before or after a meeting of Western G7 finance ministers.

So it was a rare moment to see Treasury Secretary Janet Yellen, almost certainly in her final months in office, appear before the great and good of the developing world – in the enormous splendor of the atrium of the World Bank headquarters – to lavish praise. on Banga’s management and defend development, climate change and reducing debt dependency among the poorest countries.

It is unclear how helpful Yellen’s support for the Bank’s work will be if Donald Trump wins the upcoming US presidential election.

The Republican candidate is known to be skeptical of all multilateral institutions, and the thought police at the right-wing Heritage Foundation advocate, at a minimum, a 50 percent cut in US funding.

However, the Bank avoided an attack during Trump’s previous occupation of the Oval Office and even managed to secure new funding for the International Development Association (IDA), which provides concessional assistance to poor nations, largely due to the great interest from Ivanka Trump’s first daughter.

World Banking leaders traditionally make an impact with their anti-poverty rhetoric and discourse.

Former President James Wolfensohn made his mark by working alongside Gordon Brown on debt relief. He was also the first president of the Bank to recognize that corruption was an endemic problem in developing countries.

Banga, who works closely with Yellen, has her own very different agenda. It is working on efficiency, seeking to reduce response times for the Bank’s programs from an excessively long 19 months to an average of 12 months.

The other development is to more widely deploy the Bank’s triple ‘A’ credit rating by incorporating the private sector.

In her speech, Yellen highlighted how Biden’s election as president was better leveraging private sector resources, unlocking some $200 billion of new lending capacity over the next decade, plus $60 billion from other sources.

He also made clear that it is no longer acceptable for relatively prosperous countries like India, which has displaced China as the engine of global growth, to receive loans from the World Bank.

Future relations with China and India should focus solely on “technical assistance” on how, for example, to better meet climate change goals.

The Bank often seems like a second-class citizen at the annual meeting of the IMF and World Bank.

The lack of presence is not helped by Banga’s reluctance to engage directly with the media.

He eschews live press conferences, which were once the focus of meetings, preferring to host events at the Bank’s headquarters for member countries.

Yellen has done everything she can to support the Bank’s mission. But the durability of the bond will largely depend on the outcome of the presidential election.