Treasury official says withdrawing the US from the IMF and World Bank would be a 'step backward'

[October 12, 2024]  By FATIMA HUSSEIN

WASHINGTON (AP) — Withdrawing the United States from the IMF and World Bank would be “a step backward,” a top U.S. Treasury official said Friday, defending the organizations before a presidential election that could cast uncertainty about America's future in them.

In advance of the institutions' annual meetings this month, Jay Shambaugh, the undersecretary for international affairs, alluded to a Project 2025 proposal for the U.S. to pull out of the IMF and World Bank if Donald Trump wins.

The proposal is part of a plan created by the Heritage Foundation as a possible handbook for the next Republican administration, though Trump has said it is not related to his campaign and he is not bound to its ideas.

“There are those who have suggested the U.S. withdraw from these institutions; this would be a step backward for our economic security,” Shambaugh said in a speech at the Atlantic Council. Without U.S. leadership, "we would have less influence and we would weaken these institutions. We cannot afford that.”

Often lenders of last resort, the International Monetary Fund and World Bank use billions in loans and assistance to buoy struggling economies and encourage countries operating in deficit to implement reforms they say promote stability and growth.

Asked more directly about the Project 2025 plan in a question and answer session, Shambaugh was measured in his response, noting that the Hatch Act restricts partisan political activity by federal employees. But he said that over many decades there have been proposals to withdraw from the institutions by people who say the U.S. would be better off without them. “I would just say I think the evidence suggests that’s entirely inaccurate,” he said.

The World Bank building is pictured in Washington, April 5, 2021. (AP Photo/Andrew Harnik, File)

Within the more than 1,000-page Project 2025, the authors propose that the Treasury Department “withdraw from both the World Bank and the IMF and terminate its financial contribution to both institutions," because they “simply create expensive middle-men, while U.S. funds are intercepted before being distributed to those in need.”

Vice President Kamala Harris and Democratic allies have turned Project 2025 into one of their most consistent tools against Trump. He has denied knowing about Heritage's conservative roadmap, even though dozens of his allies and former aides helped to draft the presidential transition plan.

Danielle Alvarez, a Trump campaign senior adviser, said “only President Trump and the campaign, and NOT any other organization or former staff, represent policies for the second term."

She said the 20 promises listed on his campaign website “are the only policies endorsed by President Trump for a second term,." The campaign did not answer when asked if he would encourage the U.S. to withdraw from the financial institutions.

The IMF and World Bank annual meetings will be held in Washington this month.

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