New US National Security Strategy

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The US released today an updated National Security Strategy. This is the most relevant section to the World Bank, IMF and private sector development:

For the World Bank and regional development banks, we will encourage greater emphasis on investments in the private sector. We will urge more consideration of economic freedom, governance, and measurable results in allocating funds. We will promote an increased use of grants to relieve the burden of unsustainable debt.

For the IMF, we will seek to refocus it on its core mission: international financial stability. This means strengthening the IMF’s ability to monitor the financial system to prevent crises before they happen. If crises occur, the IMF’s response must reinforce each country’s responsibility for its own economic choices. A refocused IMF will strengthen market institutions and market discipline over financial decisions, helping to promote a stable and prosperous global economy. By doing so, over time markets and the private sector can supplant the need for the IMF to perform in its current role.

Building Local Capital Markets and the Formal Economy in the Developing World. The first place that small businesses in developing countries turn to for resources is their own domestic markets. Unfortunately, in too many countries these resources are unavailable due to weak financial systems, a lack of property rights, and the diversion of economic activity away from the formal economy into the black market. The United States will work with these countries to develop and strengthen local capital markets and reduce the black market. This will provide more resources to helping the public sector govern effectively and the private sector grow and prosper.

You can also download the full PDF.

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