World Bank helps Trump on US infrastructure plans

The World Bank has begun advising the Trump administration on its infrastructure plans, the latest product of a budding relationship between first daughter Ivanka Trump and bank president Jim Yong Kim that is raising eyebrows among bank veterans and governance experts. 

The unusual move grew out of an April 3 White House meeting between Mr Kim and Ms Trump to discuss a new $1bn women’s entrepreneurship fund championed by Donald Trump’s eldest daughter that the bank is trying to rush into being ahead of a G20 summit in Germany in July. 

At the end of that April meeting Ms Trump asked whether the World Bank president wanted to meet her father and then led him to the Oval Office. There, according to people briefed on the meeting, the president was huddled with advisers discussing infrastructure plans, prompting Mr Kim to offer to help. 

Three days later a team of infrastructure experts from the World Bank was sent to New York to meet members of a new presidential council, according to a World Bank spokesman who confirmed the meetings. “These conversations continue at an informal level,” he said. 

Former senior bank officials see the infrastructure push and the rapid establishment of the women’s entrepreneurship fund as efforts by Mr Kim to use his growing relationship with Ms Trump, who works as a senior presidential adviser, to curry favour as the administration threatens to cut funding to the bank.

They say Mr Kim’s strategy raises issues of governance for the institution. Past US administrations and the bank’s board would view a similar project sceptically, they point out, if it involved the daughter of a central Asian autocrat rather than the bank’s biggest shareholder. 

“If this was not the United States and this was happening in any other country we would be deeply uncomfortable with it,” said Joel Hellman, dean of Georgetown University’s school of foreign service and until a few years ago the World Bank’s top anti-corruption expert. 

World Bank officials dismiss those concerns and say the new women’s entrepreneurship fund will abide by the institution’s strict governance rules. 

According to a White House spokesman Ms Trump will not have any formal role in the facility and will not be raising funds for it, although the US will be pledging a sum that has not yet been determined.

“She will just be involved as a champion of these issues,” the spokesman said. 

The plan to create the fund was announced last month in Berlin during a G20 meeting on women’s issues that Ms Trump attended. Ms Trump and Mr Kim also co-authored an FT op-ed on women’s economic empowerment. 

According to a draft of the proposal due to be voted on on June 30 by the World Bank’s board and seen by the Financial Times, it would be set up with $200m in seed capital, half of which was pledged by Saudi Arabia and the United Arab Emirates during a recent visit to Riyadh by Mr Trump. 

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Ms Trump and Mr Kim met a group of Saudi women on the sidelines of that visit. Afterwards, Ms Trump praised Mr Kim on Facebook.

The Saudi pledge and Mr Kim’s appearance at the event raised eyebrows among bank veterans because of the kingdom’s longstanding discrimination against women and its role in the past in blocking gender-related work by the bank as too “political”. 

Because the bank does almost all of its work in the developing world the infrastructure move is also unusual. 

Under its rules it is unlikely the World Bank would lend to any US infrastructure projects. It can, however, provide expertise to any of its members and World Bank officials point to advice it has given Canada on its infrastructure plans. 

But staff within the bank say they are coming under growing budget pressures with plans to push for a needed capital increase stalling in large part due to uncertainty surrounding the Trump administration’s support. 

One senior bank official called the push to set up the women’s entrepreneurship facility — known internally as the “Ivanka Fund” — “an awkward process” made worse by “mixed signals” coming out of the administration. 

In a budget released last week, the White House argued “that the US currently pays more than its fair share” to the World Bank. The budget also proposed a cut of almost $100m annually from the US’s planned $1.1bn contribution to the International Development Association, the bank arm that provides low-interest loans and grants to the world’s poorest nations. 

Scott Morris, a former US Treasury official now at the Centre for Global Development, a think-tank, said Mr Kim’s moves to build a relationship with the Trump administration were canny given the current situation. “He has an obligation to the bank as a whole to have a relationship with the government of its biggest shareholder,” Mr Morris said. 

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But others worry the World Bank is becoming too cosy with an administration that is vowing to cut foreign aid budgets and family planning programmes. 

“While we appreciate Ivanka Trump’s efforts to create a fund for women’s economic empowerment, they contrast dramatically with the deep cuts President Trump has proposed on US programmes to support women globally,” said Nadia Daar, head of Oxfam International’s Washington office. “Aside from Jim Kim being enthusiastic about the fund itself, I think many find it hard to separate the relationship being built here from the bank’s need for US financial support right now.”