Full Text | International Financial Institutions Under Trump: Perspectives from the Global South

The Centre for Financial Accountability (CFA), in collaboration with The Wire as media partner, Sambhaavnaa Institute, and Progressive International, co-organised an eight-part webinar series titled ‘The Political Economy of the Trump Era: Challenges & Opportunities of the Shifting World Order’, conceived to better understand the global moment we are all inhabiting. 

As one grappled with the madness to get to the method, the questions around the fate of the financial institutions like IMF, World Bank etc have many curious. Amid the intensifying crises of debt, inequality, and climate collapse, the third webinar in the series The Political Economy of the Trump Era, titled ‘International Financial Institutions Under Trump: Perspectives from India and the Global South,’ explored the shifting architecture of global finance and its entanglement with authoritarian politics. The session looked at how US hegemony, especially through the Bretton Woods institutions is being recalibrated, not diminished, to serve a new agenda: one driven by nationalist capital, coercive surveillance, and the corporate capture of public institutions.

Read the full text of the first and second parts. 

This session brought together voices from across Africa and India to assess the implications of the Trump doctrine on the IMF and World Bank, especially as these institutions reposition themselves as instruments of private capital, cloaked in the language of reform and what it means for the Global South. With sovereign debt crises escalating, development finance shrinking, and fossil capital being repackaged as climate solutions, the discussion foregrounded how the financial system is being weaponised to secure US interests while pushing austerity, deregulation, and privatisation across the South.

Speakers interrogated the role of international financial institutions not only as relics of US-led multilateralism, but as active agents of neocolonial-neoliberal restructuring – extracting wealth, enforcing policy discipline, and shielding corporate interests from accountability. Drawing on lived testimonies, regional developments, and the evolving role of BRICS and other alternative mechanisms, the conversation also offered insights into emerging possibilities, resistance, institutional reform, and the urgent need to imagine financial sovereignty beyond the IMF-World Bank, U.S led axis.

Across the discussion, a number of clear common threads emerged: the increasing subordination of public finance to private capital; the weaponisation of debt and trade rules for geopolitical ends; and the failure of global financial institutions to respond to the demands of justice and sustainability. Instead, the IMF and World Bank continue to operate as enforcement arms of capital and empire – working in the interest of few.

The panelists for this webinar included C.P. Chandrashekar, Demba Moussa Dembele, Joe Athialy, and the discussion was moderated by Anusha Lal.

Anusha Lall: Focus on the Global South

While we're taking up this discussion in the context of the Trump era or the second coming – as a critical moment to take stock of the international financial system, we do acknowledge that this has been in a state of compounding crisis for decades. I think that's something that's been pointed out quite consistently by the experts who will be joining us today.

Now, we look at the post-COVID shock to the economies, the reality of sovereign debt default, increasing debt servicing burdens, and the rising corporate debt that strains the resources of public financial institutions. These are some of the implications we’re seeing on the ground. And the crisis of international financial institutions is one that is a crisis of development and climate financing, that we see very, very clearly.

Given the retreat of official development assistance, public funding, and the demands for leveraging private financing mechanisms, debt is at an all-time high – to the detriment of welfare and social priorities. We see that it’s also increasingly owed to private creditors that really operate with the profit motive.

And I think, also pointing out from what you’ve said, that despite the rhetoric, we’ve seen 80 years of the IMF and the World Bank that came up last year. We've had the COPs – the COPs in biodiversity and climate – that have had really laughable outcomes overall. Of course, the IMF-World Bank meetings had their parallel processes, the Summit of the Future, which was preceded by the Global Financial Pact and other areas.

But what we really see is financialisation, privatisation, techno-fixes, false solutions – those are the critiques that have really just been building up, but with no real response in that sense.

But this is also a moment where we are interrogating new developments, potential mechanisms and arrangements – from the BRICS to some positive developments that we see, like the UN Tax Convention and the momentum, for example, of the Africa Groups that has brought it to the table. And we follow that progress, and perhaps see whether that could also be leading to some institutional – perhaps – transformations or restructurings, as is there.

In that frame, it is really a privilege to draw on the expertise and experience of our panelists and really hear your assessments on the state of the financial architecture, the impacts on the Global South, and from the particular perspectives and vantage points that you bring here. The implications of the current conjuncture – are we seeing the end of the empire? An opportunity? The challenges? Where do you want us to look when we are discussing a way forward?

So, I think that’s really the broad frame that we would want to put forward.

C.P. Chandrasekhar: Economist

There are two separate issues. One, of course, is looking at what the state of the overall international financial architecture is, because the international financial architecture has an official component – at the center of which sit the Bretton Woods twins, the IMF and the World Bank – besides, of course, other multilateral development banks and other sorts of international arrangements that we have.

And then we have the private component of the international financial architecture, which has its share of importance and significance in terms of international flows, cross- border flows, and particularly North-South flows which have been increasing quite significantly over a period of time.

So there’s one thing here: when we are looking at the impact of Trump on the international financial institutions, I’d like to begin by focusing specifically on what the implications are, if any, for the Bretton Woods institutions, that is, the IMF and the World Bank.

And the second, of course, is another aspect we have to keep in mind are the international institutions which are part of a broader multilateral framework, not just limited to the international financial architecture. These include, in particular, a range of UN agencies and, of course, the WTO, which are distinct in that, unlike the IMF and the World Bank – they are not entities where voting power is concentrated in the hands of a few. Most of them are structured as “one nation, one vote” organisations.

In fact, some of them at least attempt, or believe they can attempt – to reach decisions through consensus rather than through voting based on weighted voting power.

So I would like to begin by asking: what difference, if any, has been made to the core, the apex of this pyramid of institutions that make up the multilateral framework, with the coming of the Trump administration or with the possibility of a second Trump presidency?

And this is an important question to ask, because there has been speculation – partly driven by the tendency displayed by the United States under this administration – to withdraw from a number of international institutions such as the UN Human Rights Commission, the WHO, United Nations Relief Agency for Palestinians. And there have been talks of a possible withdrawal from UNESCO and other such organisations.

Because of this pattern, there has been some speculation or at least the question has been raised on whether the United States might also abandon the Bretton Woods twins.Might it assert, as it has in other instances, that these institutions are not fulfilling their intended roles and therefore warrant disengagement?

I would argue that this is not the case. And in fact, one doesn’t even need to argue it – at least at the moment because we know that during the Spring Meetings, the Treasury Secretary, Scott Besant, explicitly stated that the US wants the IMF and the World Bank to remain in place. It is not seeking to shut them down or withdraw from these institutions.

However, the US does want them to change. The way this change is framed or the way he attempted to define it, is by asserting that these institutions should now focus on what the United States interprets as their core mission, and abandon what this administration views as recent deviations from their core activities.

According to this view, these institutions have drifted away from their core responsibilities, and as a result, are now failing in delivering on their essential mandate. This perceived overreach, in their opinion, tends to stifle their ability to deliver on their core mission.

Now, what is this core mission, as understood by the United States today? Scott Besant stated that, in the US view, the role of these institutions is to contribute to making America safer, stronger, and more prosperous. Crucially, they must also enable the private sector to thrive.

In essence, this places the IMF and the World Bank in service of the Make America Great Again (MAGA) agenda, where their legitimacy and utility are tied to their ability to advance US economic and security interests, particularly by supporting the prosperity of private capital, much of which originates in the United States.

So while the US wants these institutions to remain, it also wants them to do so in order to serve an agenda it defines as appropriate. The question, then, is whether we can unpack this perception in greater detail. And to do so, I refer again to Scott Besant’s statements during the Spring Meetings, made at a time when speculation was circulating about a possible US withdrawal from the Bretton Woods institutions.

He said that the functions of these institutions should be limited to macroeconomic surveillance and lending to members facing balance-of-payments problems. On the surface, this doesn’t seem very different from what the IMF has traditionally done. But he went further, stating that the IMF must now, as part of this core agenda, exert greater pressure on its members to maintain fair and transparent currency practices. This reflects the broader position underlying the US administration’s tariff wars and trade- related aggression, something that very few countries, perhaps only China to some extent, have managed to push back against. There has been only a vague response from the European Union, indicating some resistance to this form of aggression.

Fundamentally, the view that drives the US tariff aggression, as expressed by various spokespeople of the administration, is that the US is running large trade deficits with many countries, which they interpret as a form of economic exploitation. According to this view, these countries are achieving trade surpluses with the US by deliberately manipulating their currencies or using other mechanisms to undervalue them, thereby making their exports more competitive in US markets and contributing to those deficits.

Therefore, the US intends to respond through various measures aimed at restoring what it sees as a fairer trade balance – whether on a country-by-country basis or with blocs like the EU.

That’s one element: fair and transparent currency practices. Then, of course, there is a specific reference to China, which he claimed, is adopting unfair practices. He wants the IMF to actively intervene to address this.

The second issue is macroeconomic surveillance. What does that mean? According to Besant or the US administration – it means discouraging policies that suppress domestic demand in order to generate trade surpluses, particularly through mechanisms like subsidies or dumping. Such practices, they argue, create negative spillovers elsewhere, specifically, in the United States.

Therefore, the IMF must scrutinise countries like China, which, according to this view, suppress domestic consumption by keeping wages low in order to generate larger exports. These macroeconomic policies are seen as harmful to others and must be addressed.

And finally, the IMF should track the build-up of what he referred to as “unsustainable debt.” But the objective is not merely to prevent debt accumulation. The concern is that private lenders who are expected to thrive in this environment may not be able to recover their loans from highly indebted countries, particularly the poorest ones that borrowed heavily after 2008.

So there must be a push to ensure “no excess borrowing.” But what does that mean? Does it imply that due diligence was lacking when private capital was pushed into the sovereign bond markets of developing countries?

Not quite. What he is suggesting is that players like China must be prevented from providing too bilateral credit, which leads to unsustainable debt. Paris Club countries, in contrast, hardly lend bilaterally anymore – they route their lending through multilateral institutions such as the World Bank or the Asian Development Bank. But China has emerged as a key bilateral lender globally. And so, the demand is that the IMF must bring recalcitrant creditors like China to the table for restructuring agreements, get them to take a haircut, so that the borrowing country can also restructure its private loans, which are often extended with fewer concessions.

In this way, a very clear agenda was laid out: how the IMF should change to support this transition. As for the World Bank, the argument is equally clear – it must promote growth and stability in the rest of the world in order to create an environment where the United States can export large amounts.

Now, if that is the correct reading, then the speculation that the US might pull out is clearly misplaced. It’s evident that it won’t. Why? Because with relatively modest capital contributions, the US retains control over these institutions and can use them as instruments to advance its agenda. Take the IMF, of the roughly USD 660 billion in quotas, the US contributes just USD 115 billion, yet that is enough to give it veto power.

Similarly, in the World Bank, voting strength is heavily skewed. Moreover, most of the capital is callable – it is not even actually drawn, as a result there is no significant financial burden on the contributing countries.

So, overall, what I would like to say is this: yes, there is an effort underway to reshape the Fund and the Bank – not to make them take on radically new roles, but to carry out their existing roles in a far more aggressive and coercive manner, with consequences that heavily indebted countries subject to IMF surveillance will ultimately have to bear.

Demba Mousa Dembele: Economist

I think we all recognise that this fascist administration will use every instrument at its disposal to advance the objectives of its agenda. That is US imperialism and domination. We are already seeing this unfold in the area of trade. And I think we would all agree that the IMF and the World Bank being instruments of the global capitalist system will be used by Trump and his administration to push their agenda in the Global South, and even beyond, wherever it is possible, and particularly against those he perceives as enemies or foes. He will use these institutions.

Let me give you just one example from Africa. The United States is one of the so-called non-regional members of the African Development Bank, “non-regional” meaning non-African. This is a leading lending institution for development in Africa. Just a few weeks ago, the Trump administration decided to cancel more than USD 500 million that would have gone to the African Development Fund – the key lending arm of the Bank. That decision alone reflects a deeper truth: the United States has no genuine commitment to development in Africa or in the Global South. And so, we should expect more such cuts from the US when it comes to Africa.

But speaking about the IMF and the World Bank, I think our reading from Africa is that this administration will use them as tools to impose more neoliberal policies whenever an African country attempts to negotiate agreements with these institutions. Some of us still remember how, in the 1980s, the Reagan administration used the IMF and the World Bank to push neoliberal reforms that devastated many African economies, including mine, here in Senegal. So I believe we should expect the same kind of policies from this administration.I am certain that the Trump administration will use its influence at the IMF and the World Bank to block funding for infrastructure projects in Africa and in other countries across the Global South. I am quite sure of this. Because, in his view, anything that could benefit our countries should not be supported.

The IMF and the World Bank being the so-called leading multilateral development institutions, especially the World Bank will, in my view, be used by Trump to block financing that would otherwise benefit Africa or other Global South countries. So we fully expect that investment in infrastructure, in education, and even in health will be obstructed by the US administration. We already see this pattern, for example, with their withdrawal from the World Health Organisation. They simply don’t care about health issues in Africa or elsewhere in the Global South.

And some countries, not only in Africa but elsewhere such as Venezuela, Iran, and Cuba, which are seen as enemies or adversaries, will likely receive reduced funding, or perhaps no funding at all, from these institutions. But in the case of Africa, the main concern is the push for even more devastating neoliberal policies including opening up markets,privatising state-owned enterprises. I think these are the kinds of policies we can expect from this administration, using the World Bank and the International Monetary Fund as instruments.

These are some of the challenges ahead. And African countries are, to some extent, prepared for this, especially in light of what I mentioned earlier: the cancellation of more than 500 million US dollars in funding to the African Development Bank, and the trade policies that are already impacting countries across the globe, particularly in Africa.

So I believe that African countries, African leaders and presidents are now bracing themselves for the worst-case scenario in terms of their relationship with the World Bank and the IMF under the Trump administration.

So, what should we do? In our opinion, African institutions, especially the African Development Bank must strengthen their policies. In fact, just next week starting Monday – the General Assembly of the African Development Bank will take place, with a new president to be elected on Friday. This presents a major challenge and opportunity for the incoming president: to strengthen the Bank and its autonomy in order to face the pressures that may come from the Trump administration. This means the African Development Bank must be prepared to provide greater investment to African countries and to work in closer partnership with other institutions in the Global South to meet the challenges posed by US policies.

And it’s not just the African Development Bank. Other African institutions must also coordinate and work closely to respond to this moment. Beyond Africa, the Global South as a whole must come together. We have platforms such as BRICS and BRICS+; we now see the Global South attempting to speak as a collective force.

Now, I think what we’ve witnessed over the past few years is an effort by some countries in the so-called Big South to challenge the domination of Western countries in the international financial institutions. The World Bank and the IMF, as we all know, have been dominated by Europe and the United States for the past 80, now 81 years.

At the IMF, the Executive Director has always been from Europe. At the World Bank, the President is always a US citizen. The United States holds veto power on major decisions in these institutions. So, for now, I don’t see much room for optimism when it comes to reforming these institutions, at least not while this governance structure remains unchanged. Opening the possibility for leadership by individuals from the Global South – whether at the IMF or the World Bank – would be a significant step, but it’s not something we are likely to see anytime soon. Because, ultimately, we know these institutions lie at the core of the Western imperialist system, both financially and economically.

So I think what we countries of the Global South should do is challenge these institutions by building alternatives. Institutions where people from the Global South can take the lead. Institutions that prioritise financing for the economies of the Global South. And I believe this is already beginning to happen with BRICS. There is the New Development Bank, which belongs to the BRICS countries. It is based in Shanghai, China, and is currently headed by former Brazilian President Dilma Rousseff. There are other such institutions as well. I believe there is also an infrastructure-focused bank in Asia. Recently, Senegal has been working to join one of these banks. Senegal is trying to strengthen its ties with BRICS and the wider Global South.

This, I believe, is the kind of move we should be considering to challenge the dominance of the World Bank and to reduce our reliance on the US dollar through bilateral or multilateral agreements among Global South countries and to weaken the use of data and financial metrics that are often used against us in trade and financial negotiations.

This is the kind of direction we should be moving in. And I believe that what is happening under this administration will further push leaders of the Global South, those heading these emerging institutions to take steps in this direction.

Joe Athialy: Centre for Financial Accountability

At the end of last year, several organisations came together to hold an Independent People’s Tribunal on the World Bank in Calcutta, marking 80 years of the Bretton Woods Institutions – the World Bank and the International Monetary Fund. Professor Chandrasekhar also served as one of the jury members. Over two days, 30 testimonials were presented by representatives of communities directly affected by World Bank-funded projects. They shared their lived experiences of loss of livelihood, forced evictions, and also brought in insights from experts and activists who participated in the tribunal.

What was strongly reiterated at the tribunal was that the World Bank continues to shape economic policymaking – intervening in environmental and labour laws to facilitate the ease of doing business, undermining national sovereignty, and deepening wealth inequality through its policy prescriptions. It continues to pressure governments to privatise critical and strategic institutions and services.

Moreover, the Bank has made a significant contribution to the climate crisis, not only by directly financing fossil fuel-based industries, but also by promoting a development model based on extraction and the exploitation of nature.

The tribunal also brought out evidence of how the World Bank supported, aided, and abetted authoritarianism throughout the Global South, including India in recent years, which is now the largest borrower from the Bank. It presented cases of how World Bank- backed digitisation of citizen IDs strips individuals of basic rights by excluding them from services, while enabling mass surveillance, data misuse, and state control without consent. Looking at some of the projects funded in India, some going back three to four decades, like the Narmada Dam, Singrauli Thermal Project, and Mumbai Urban Transport Project, and more recent ones like the Tata Mundra Project – what we heard were stories of massive displacement and loss of livelihoods, where people were never able to recover even decades later.

One session focused on how World Bank-driven, market-based interventions have reshaped India’s public sectors – like agriculture, health, and education – fuelling privatisation, eroding public services, and deepening inequality, all while prioritising corporate interests over public accountability and equal access to essential goods and services.

I know the audience here is not unaware of any of these issues. People’s movements and civil society organisations across the globe have long demanded the closing down of this institution, which is undemocratic and allows itself to become a tool of the Global North to impose its hegemony over the Global South, placing corporate welfare above people and the planet.

In this context, how do we understand what Trump is doing and its impacts on the World Bank? With his “America First” approach, Trump has already expressed satisfaction, as CP Chandrasekhar mentioned earlier during the Spring Meetings, with multilateral institutions like the World Bank, seeing them as mechanisms that disproportionately benefit foreign countries at the expense of US taxpayers.

The US believes that countries like China, once the largest borrower, benefited more through World Bank loans and programs. While the US has used institutions like the World Bank to promote and protect its corporations in the Global South in the past, is the current lack of interest also a reflection of a new phase of corporate control in the US?

Are the older industries like pharma, auto, and construction now being replaced by new-age companies like Tesla, Amazon, Meta – who perhaps see the World Bank’s operations in the Global South as less relevant?

What is interesting to note is the changes happening within the Bank changes that may not have begun with Trump, but have certainly accelerated during and after his tenure. One such change is the World Bank Group’s push for a “One World Bank” framework. This is unfolding hastily and has raised deep concerns about increasing institutional power alongside weakened transparency and accountability. Aligning diverse arms of the Bank, despite their different mandates will only further entrench weak standards, such as the IFC’s already diluted access-to-information policy.

The planned merger of the Bank’s independent accountability mechanisms threatens decades of hard-won gains from grassroots struggles. Instead of enhancing transparency and justice, these reforms risk eroding safeguard policies – vital tools used by communities to hold the Bank accountable and expose wrongdoings on the ground. This centralisation appears more about control than any democratic, rights-based governance model for development.

Under the leadership of current World Bank President Ajay Banga, who comes from the citadel of private corporations including Mastercard, Citigroup, Pepsi, and Nestlé – the Bank is increasingly aligning with corporate interests. It is pushing for private capital, even in climate finance. Rather than supporting community-led adaptation or public sector solutions, the Bank is prioritising de-risking private investments and expanding carbon market strategies that entrench corporate control over climate policy.

This market-centric approach sidesteps systemic reforms, commodifies nature, and sidelines frontline communities. Banga’s rhetoric of innovation masks a deeper agenda: leveraging public funds to attract private capital, while weakening environmental and social safeguards. The result is a climate strategy more responsive to boardrooms than to those most affected by ecological collapse and global inequality. India, of course, has played a pivotal role in pushing the World Bank towards greater accountability. The Narmada struggle led by the Narmada Bachao Andolan resulted in the first-ever independent review of a Bank-funded project and ultimately forced the Bank to withdraw from it. That landmark movement led to the creation of the Inspection Panel, the first independent accountability mechanism in any multilateral development bank.

Though not a panacea, the panel became a critical tool for communities to expose harm from Bank-financed projects. When strategically leveraged within broader political struggles, it provided visibility to grassroots resistance and underscored the need for radical structural reform in institutions like the World Bank. One such case is the Tata Mundra Project struggle in Gujarat. This power project, partially financed by the IFC, the Bank’s private sector arm, became a landmark case in global accountability. In 2011, local fisherfolk and farmers filed a complaint with IFC’s accountability mechanism, the Compliance Advisor Ombudsman (CAO). By 2013, the CAO confirmed all serious harms raised in the complaint. Yet IFC dismissed the findings and took no corrective action.

In response, affected communities sued the IFC in US courts. In a historic 2019 ruling, the US Supreme Court stripped the World Bank Group of absolute immunity, setting a global precedent that allows communities worldwide to legally challenge the Bank for project-related harms.

Coming back to the US and the Bank – what will be critical is how the Bank changes and defends itself while aligning with US interests. The US remains the largest contributor to the World Bank in terms of capital subscriptions and holds veto power over all major decisions. For example, with the US walking out of the Paris Agreement, how will the Bank reconcile this with its climate policies, especially when it now serves as fund manager for the Loss and Damage Fund under the UNFCCC?

With Trump’s open support for fossil fuels and nuclear energy, will the Bank revert to financing those sectors despite declaring in 2013 that it would stop funding coal? While it has continued to fund fossil fuel industries indirectly over the years, that declaration was a critical milestone. And with Trump’s rollback of diversity and inclusion policies declaring the US will recognise only two genders – what does this mean for the Bank’s social rights and LGBTQ+ inclusion programmes? These changes have far-reaching consequences for people and the planet. They also risk undoing many gains that movements and civil society organisations have fought for over decades.

As mentioned earlier, the collective demand of movements and CSOs is the dismantling of the World Bank. But until that happens, it cannot be allowed to operate on major policy matters without accountability.

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