What Next for the Bretton Woods Twins?
Although multilateralism is in crisis, different fates await the multilateral institutions that were created under the Bretton Woods Agreement 75 years ago. While the International Monetary Fund has found renewed relevance in a world of crises, the World Bank has suffered under the poor leadership of a parade of American men.
WASHINGTON, DC – The 75th anniversary of the signing of the Bretton Woods Agreement comes at a time when multilateralism is under unprecedented pressure. Bretton Woods created the International Monetary Fund and the World Bank, and laid the foundations for the General Agreement on Tariffs and Trade, the precursor to the World Trade Organization. But trade agreements are now being undermined around the world. Deadlocks within the United Nations Security Council are permitting the conflicts – and deepening human misery – in Syria and Yemen to continue. And climate-change agreements are being flouted, with dire consequences for future generations.
Inevitably, the strain on multilateralism carries over to multilateral institutions. With US President Donald Trump’s administration blocking the appointment of judges to the WTO’s dispute-resolution body, that organization has largely become a bystander to ongoing trade conflicts. As matters stand, the entire dispute-settlement mechanism will have seized up by December. Worse, UN Secretary-General António Guterres recently warned that the UN itself could run out of money with which to pay staff salaries by the end of this month, owing to the failure of member states to meet their funding commitments.
World Bank and Sons
By comparison, the IMF and the World Bank might seem relatively secure. But surviving is not the same thing as flourishing. In fact, the fortunes of these fraternal twins are increasingly diverging. Consider the World Bank, whose development mission has evolved over time, from post-war reconstruction to infrastructure investment, and from poverty alleviation to policy reform and structural adjustment. In recent decades, the World Bank has not only rediscovered its roots in reconstruction and infrastructure, but added to its agenda everything from environmental and climate policy to social inclusion and gender equality.
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