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TOO WEALTHY
Since taking his job at the Treasury in 2017, Malpass had been critical of the World Bank’s continued low-interest lending to China, arguing that the world’s second-largest economy was too wealthy for such aid while it was loading up some countries with debt from its Belt and Road infrastructure program.
A former Bear Stearns and Co chief economist who advised President Donald Trump’s 2016 election campaign, Malpass has called for more of the bank’s resources to be devoted to poorer countries in Africa, Asia and Latin America.
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A Feb. 3 World Bank pledge to review here financial resources that could be deployed quickly was aimed at poorer countries that could be affected by the pandemic, a bank official said.
China agreed to a decline in borrowing as part of reforms associated with a $13 billion capital increase for the World Bank approved by shareholders in 2018.
The World Bank in December adopted a new five-year China plan that calls for $1 billion to $1.5 billion in annual lending, down from a $1.8 billion annual average over the previous five years..
Malpass said lending to China in the 2020 fiscal year, which ends June 30, would likely fall below that range.
Traders wearing face masks are seen on the trading floor at a flower auction trading centre following an outbreak of the novel coronavirus in the country, in Kunming, Yunnan province, China February 10, 2020. cnsphoto via REUTERS
Although the bank is “winding down” its lending to China under terms of a 2018 capital increase, the bank would grant financing for certain “global public goods,” Malpass said.
These include environmental projects, private sector development and reforms to state-owned enterprises.
The only new China financing approved by the World Bank so far in fiscal 2020 is a $150 million loan here towards a $686 million project to sustain forests in the upper reaches of the Yangtze River basin.
