(AFP) – Developing countries should attack fast trade transactions with the United States with the “early possible” opportunity, the World Bank president told AFP on Friday after a busy week with Washington’s global financial leader.
Ajay Banga was interviewed at the World Bank AFP and the International Monetary Fund’s spring meeting. This was held this year under a cloud of uncertainty over the unfolding of President Donald Trump’s Stop Start tariffs.
Banks have advised developing countries to quickly trade with the US, and have since encouraged them to focus on reducing trade barriers and increasing regional flow of goods, Banga said.
“We need to negotiate the trade system with the United States as early as possible (opportunistic),” he said. “If you’re late, it hurts everyone.”
Trump’s tariffs have shaking financial markets, volatility spiked, scaring investors and consumers.
Since taking office in January, US leaders have imposed a “baseline” 10% tariff in most countries, a much higher duties in China, and have levied sector-specific taxes in regions such as steel, aluminum and automobiles that do not manufacture the US.
He also introduced much higher tariffs on dozens of countries – which have been temporarily suspended, but accused them of having an unfair trade balance with the United States.
Banga also addressed criticism levelled by US Treasury Secretary Scott Bescent at the bank earlier this week.
Bessent criticised China’s “absurd” developing country status and called on Banga and the IMF Managing Director Kristalina Georgieva to “earn the regime’s trust.”
“I don’t think he’s wrong,” Banga said of Bescent’s comments on China.
“A country on the scale of China and the capacity of China should not take money from IBRD at some point,” he said, referring to the international bank for reconstruction and development.
Such a move would require the support of the World Bank Executive Committee, made up of member states.
According to Banga, China said it borrowed about $750 million from IBRD last year, but paid billions of dollars to the institution in repayments and donations.
“In my view, I’ve reduced it to 750 (million) and I’m trying to find a way to deal with China to take it down even more,” he said. “I want to accomplish that. That’s what I’m talking about with the Chinese.”
Banga said that the Trump administration’s criticism of the World Bank, including “a vast policy overreach,” is not uncommon, citing newly elected governments in countries including France, Japan and South Korea.
“I keep telling people that this is a completely constructive request. Say, tell me, and show me that you are the kind of people who will advance the interests of my taxpayers in my country,” he said.
“I take it in that spirit,” he said. “There’s nothing wrong with that.”
Since steering the Washington-based development lender in 2023, Banga has pushed it to streamline operations and encourage private sector participation, focusing on job creation and power connections.
Among the bank’s current priorities is the African development banks pushing 300 million sub-Saharan Africans to connect to electricity by 2030. This is a process that requires huge amounts of new energy to be brought online.
“You should try (energy) at the best and lowest possible cost,” Banga said. In addition to renewable power, nuclear power and gas suggest that they can help provide a basic load.
The bank’s executive committee is scheduled to discuss the energy strategy in June, Banga said, adding that funding for both nuclear and gas is likely on the agenda.
Banga said the banks are also pushing to not only outsource jobs from developed countries, but also to encourage private sector job creation in developing countries.
“Then you’re going to be a challenge for (the developed economy) and you see people talking about them with their vote,” he added.
