Recapturing the spirit of Bretton Woods

During the waning days of World War II, in a sleepy town in Northern New Hampshire, the modern world was born. The United States led the creation of two multilateral organizations, the International Monetary Fund (IMF) and World Bank, to rebuild from one world war and prevent another. Several years later, two additional multilateral organizations were formed, the North Atlantic Treaty Organization (NATO) and the United Nations. Together, these institutions have provided the foundation for the modern world that we have known for the last three-quarters of a century.

Perhaps the lowest profile but most idealistic of these post-World War II creations is the World Bank. Not exactly a bank in the traditional sense, its mission is to eliminate extreme poverty around the world. Remarkably, almost 190 countries now support the World Bank.

In a time in which the value of all multilateral institutions is challenged within western democracies, particularly within the United States, it is long past time to offer a vigorous defense of the World Bank. Like the IMF, NATO, and UN, it is very much in U.S. interests to remain an active and leading participant in it.

The newfound domestic political challenge to multilateralism is an opportunity to reevaluate and redesign our strategic goals for the World Bank. For the decade of the 2020s, I see three major goals for the World Bank that align with U.S. interests.

First, the United States, and indeed the entire western world, need to offer an alternative to the developing world other than China. Through its “Belt and Road Initiative” China has gained a foothold throughout Africa and Asia by making massive loans for infrastructure projects. Their initiative even stretches into Europe. To date, more than sixty countries, accounting for two-thirds of the world’s population, have signed on to projects or indicated an interest in doing so. The west has been sleepwalking while China has become the go-to resource for much of the developing world. This is dangerous.

Second, it is a “now or never” moment if we are to truly combat climate change. The Biden administration has clearly made this one of its chief goals. It created the position of climate czar and appointed former Secretary of State John Kerry to lead it. This is an indication of the high priority President Biden places on meeting this existential challenge.

Keeping global temperature rise to below 1.5°C will require coordinated global action at an unprecedented scale. The World Bank is exactly the sort of institution that can advance the administration’s climate goals for the developing world. The Bank can, and should, integrate climate action benchmarks into every development initiative.

Countries striving to rise from grinding poverty, understandably, tend to value economic development above all other considerations. When asked about climate change, I have never forgotten what one diplomat from a developing country once said to me. “You guys have had almost 200 years to develop into rich countries and pollute the globe. Now you want to hold us back because of what you did?” The diplomat rather undiplomatically expressed a view that is commonplace in impoverished countries. The World Bank can help developing countries recognize choosing between achieving economic growth or meeting climate change goals is a false dichotomy. 

Third, the World Bank has a crucial role to play in helping the developing world rebuild from the devastation wrought by COVID-19. While the United States and other wealthy countries have struggled to handle the coronavirus, for the developing world, it has been the biggest disaster in our lifetime. From India to Mexico and Brazil, the world’s biggest developing countries are witnessing some of the steepest economic contractions on record, throwing tens of millions out of work and turning back the clock on gains against poverty, according to The Wall Street Journal. For the countries that rank well below the biggest developing nations, the contractions are even worse. Only the international community can lead the rebuild that these nations desperately need. It would be perfectly fitting for the institution created to help the world rebuild from the devastation of the Second World War to again play its historic role and lead the rebuild from COVID.

Donald Trump may have lost the 2020 election, but Trumpism is not yet extinguished. It still lives, both in the United States and other western countries. This empty populism that preaches, among other things, a “go it alone” attitude and hostility to multilateralism, must be fought by defending the world we have built, and making it work to its best.

Congressman Brendan F. Boyle (D-Pa.) is the chairman of the Congressional World Bank Caucus.