As President Biden travels to India for the G20 meeting, the White House is encouraging other multilateral development banks to boost lending for climate change and infrastructure projects in the Global South.
Richard T. Clark is a political scientist who studies policymaking at the World Bank. He describes the objectives as bolstering the Bank’s budget, reorienting lending to tackle climate change, and competing with China on infrastructure spending.
Clark says: “Late last month, Biden asked Congress for just over $3 billion in new funding for the Bank with an eye towards ramping up its spending on infrastructure to compete with China’s Belt and Road Initiative. My guess is that Biden will use the G20 as a forum to ask peer countries for similar pledges.
“This is opportunistic since public trust in China in many African countries has declined in recent years as the debt burden associated with Chinese lending has mounted. While China had long resisted restructuring this debt, their resolve has waned in recent months under immense pressure from recipient nations and the Paris Club.
“In short, World Bank loans may look relatively attractive to these countries, and the Bank can advocate for green policies and infrastructure (e.g., solar and wind investments) in new loan programs. Ajay Banga, who replaced climate-skeptic David Malpass as World Bank President, is a strong advocate for more climate finance from the World Bank as well.”
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