Rep. Matt Gaetz probably isn’t thinking about next week’s IMF-World Bank meetings in Marrakech. But his presence will be felt. It comes down to money. The U.S. House is in turmoil, and getting Congress to sign off on President Joe Biden’s budget request to boost funds for the World Bank and similar organizations faces an even steeper uphill battle. Gaetz and many other Republicans, even those who didn’t support the ouster of former Speaker Kevin McCarthy, are balking at providing more aid to Ukraine’s fight against Russia. That’s bad news for the World Bank, given that Ukraine aid is lumped together with U.S. support for international financial institutions in the appropriations process, which is in limbo. It’s an issue that will be lurking next week in North Africa, where global finance leaders will be looking for more money to make the World Bank and IMF more responsive to climate change and other challenges in a world beset by rising geopolitical tensions and economic fragmentation. Biden touted his ambitious financial pledge for new World Bank funding at the G20 summit in September. So far, perhaps fearing that the U.S. can’t put its money where its mouth is, no other big member of the bank has stepped forward to match that — calling into question the credibility of U.S. leadership on the issue. “Are other countries not coming forward because they don’t think the U.S. can actualize on its financial pledge, in particular given the dysfunction in Congress?” said Clemence Landers, a former Treasury official who is now at the Center for Global Development, a think tank. She predicts an “incredibly steep” learning curve for new World Bank President Ajay Banga, a former Mastercard CEO tapped by the Biden administration. Banga will spend next week trying to prove he is up to the challenge of mobilizing more resources. Barring any expansion to the bank’s balance sheet, he will be tasked with trying to do more with the same resources — something that experts say is impossible when it comes to adequately addressing climate change. Banga is pushing for greater private sector investment as well. Banga says the capital available for one of the bank’s primary arms is “a pimple on a dimple on an ant’s left cheek compared to what we need in the world.” Josh Lipsky, senior director of the Atlantic Council’s GeoEconomics Center, said that, given the political reality, it’s not about swinging for the fences. “It’s about moving the football a few yards at a time and showing that these international institutions are still effective,” he said. But the administration’s push to elevate climate change as a priority of the World Bank is giving conservative lawmakers one more reason to think twice about backing more funding. “With growing GOP opposition to the Democrats’ climate policies, the administration may eventually face a choice between pursuing international climate goals at these institutions and maintaining the bipartisan consensus on development finance,” said Matt Swinehart, a former Treasury official now at Rock Creek Global Advisors. The administration says it’s aware of the challenge. “We have structured a package that should appeal to a wide range of people,” said a senior Treasury official. “We’re going to have to do the work to get it passed.” Happy Friday — What are you watching at the IMF-World Bank meetings? Let us know: Zach Warmbrodt, Sam Sutton.
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