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Summoning the Spirit of Bretton Woods

It is now obvious that poorer countries are caught in a financial vise not of their own making. The West, led by the United States, must equip the International Monetary Fund and World Bank with the tools they need to stabilize poorer economies ravaged by the spike in energy and food prices, COVID-19, and climate change.

LONDON – A riptide is about to hit the global economy, and the West needs America to help. Just as longstanding NATO allies are helping Ukraine fight against its Russian invaders, we need the old Bretton Woods allies to win the peace. That will require equipping the International Monetary Fund and the World Bank with the tools they need to stabilize poorer countries ravaged by the conflict-driven spike in energy and food prices, COVID-19, and climate change.

Toward the end of World War II, wise Americans knew that prosperity was the best guarantor of peace – and of continued US influence. When delegates from 44 countries met in Bretton Woods, New Hampshire to plan the postwar international financial system, US President Franklin Roosevelt spoke for many when he declared that, “The economic health of every country is a proper matter of concern to all its neighbors, near and distant.” Together with European allies, the United States created the World Bank, the IMF, and then the Marshall Plan to rebuild shattered Western economies so that they became strong enough to resist the Soviet Union.

The world needs similar visionary leadership again today. After all, the economic disruption wrought by the COVID-19 pandemic pushed as many as 124 million people worldwide into extreme poverty – the first rise in global poverty this century. According to the World Bank, as many as a dozen developing economies may be unable to service their debts in the coming months.

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