No stranger to political controversy, the International Monetary Fund may soon find itself embroiled in one that pits China’s interests against those of the United States. Beijing’s hugely ambitious international development project, known as the Belt and Road Initiative, is raising fears of debt crises in the developing world, and the IMF may be called in to clean up the mess.
The U.S. is poised to oppose any IMF deal providing funds that would ultimately go to pay off Belt and Road-related tabs. How the IMF handles this situation could give clues about how the institution will deal with competing American and Chinese interests in an increasingly multipolar world.
Launched in 2013, the Belt and Road Initiative is an international investment program that promises to pour $8 trillion in Chinese money into infrastructure and other development projects across nearly 70 countries in Africa, Asia and Europe. Despite a clear need for infrastructure investment across the developing world, many observers quickly warned that all these Chinese-led investments would be driven by political, rather than economic, considerations.