 Okay, we're gonna get started. I'm Dan Rundy. I'm the Schreyer chair here at CSIS and I also lead something called the project on prosperity and development and We're here today to talk about US global leadership in five critical payments I liked five easy payments, but I suspect five critical payments. I think gets the message across We're talking about the United States and the general capital increase the general capital increase for those of you who are not familiar with some of the ins and outs of the World Bank system and the other multilateral development banks is a unique Request for additional an additional increase in the shares of the World Bank and some of the other regional Multilateral development banks. This is not your typical hat-passing exercise that the Capitol Hill gets Year over year. This is about the de facto control over the World Bank and the multilateral development banks and to the extent that the United States does not participate in the General capital increase is to the extent that we are making a down payment on American decline. This is a critical Decision it's in front of the Congress that the Obama administration has put before the Congress and it's a particularly difficult time To be asking for money. I think everybody knows this is a particularly difficult moment because of the the era of austerity that we're in But it's has national security implications. It has implications for our leadership in the world. It has implications for development and so I think this is a Particularly opportune moment for us to be having this discussion We're very very fortunate and we're honored here at CSIS to have two great leaders on this issue. We have Chairman Gary Miller Republican from California who's here. He's going to make some opening remarks about where this stands on Capitol Hill He's led four hearings in his committee on this topic And then we're very fortunate to have undersecretary Layle Brainerd from the Treasury Department for International Affairs many of you of course know her in her various incarnations in public service These are two very dedicated and very able public servants And the country is very fortunate to have leaders like this at this time leading a very difficult Lift so without further ado, I'm going to turn the floor over to chairman Miller chairman Miller Well, I'm going to thank you for having me here today to join you for your event Appreciate the opportunity to be here to you with and congratulate CSIS for convening this discussion on the importance of US leadership At the MDBs for national and economic security Today's moderator mr. Dan Rundie honored us yesterday with this testimony He's a wealth of knowledge and it was refreshing to hear his point of view on this issue And it added a lot to the hearing we had in addition One of the panelists today was former ambassador congressman mark green and mark was a classmate of mine and an old friend So it's good to good to have a friend back and again Enjoyed his testimony. I miss serving with him in Congress But I he's gone on to bigger and better things and I just wish him the best for his future I was asked to come to offer status update on congressional consideration of the general capital increase for the MDBs As you know our subcommittee has been considering legislation to authorize general capital increases for the international bank reconstruction and development The American Development Bank the African Development Bank and European Bank for reconstruction and development The Treasury Department has requested authorization for the US to make these capital increase payments in order to maintain American leadership And I will emphasize that it's extremely important American leadership at the multilateral development Bank Which is important to us economic and national security as you know If the US does not increase capital stock in the banks in the US could lose its leadership position Our subcommittee convened four hearings on these authorization requests at our first hearing We looked at the leadership role of the US at the MDBs Undersecretary Bernard testified that having a leadership position at a MDB can influence bank policy decisions And in some cases can provide veto power over the decisions that are made if we do not authorize these funds as requested The US share will be diminished impacting our leadership and influence at these institutions And I will just compliment the undersecretary She has been extremely generous with her time her talents and her staff We've worked very closely together to really do what's right for this country and she has a Again a wealth of knowledge on this issue and it's refreshing to meet with her and she's been extremely cooperative on these issues Our second hearing was focused on the impact of MDBs on US job creation That's a major emphasis for Congress today. We learned about the ways in which MDB financing helps open developing markets Which can spur private sector economic growth and employment in the United States We had a distinguished panel of witnesses to discuss topics including the Honorable Jim Colby From a member of Congress and chairman of the House Foreign Operations subcommittee on Appropriations he is currently a senior transatlantic fellow at the German Marshall Fund Mr. Robert Mossbacher junior past presidency of overseas private investment corporation Mr. James A. Harmon past president CEO of the XM Bank Mr. Benjamin Leo former White House National Security Director of African Affairs now the Center of Global Development Mr. John Hardy president of coalition for employment through exports our third hearing focused on how World Bank and MDB's Assistance to middle-income and poor countries around the world contribute to US national security We learned about how MDB's assistance help developing countries become stable nations that can counter Conrack proliferation of terrorism and other threats to the United States We're honored by rear Admiral Michelle Howard chief of staff for the directors of strategic plan and policy for the joints chief of staff She came to our hearing it's extremely rare for a senior military officer to appear before our committee Admiral Howard holds one unique distinction that was very impressed by she was the first African-American woman to command a ship in the US Navy Assistant secretary Marisa lago the US Department of Treasury assistant secretary for international markets and development also testified at our third hearing And yesterday we held a fourth hearing that was the legislative hearings considered a discussion draft for authorization of the general capital increases We focused on the consequences of not meeting the US commitment to the MBB's The impact of US leadership at the MBB's to ensuring that investment helps the safeguard national and economic security and specific policy derivatives or conditions that should be included in legislative to preserve US national economic security as I mentioned Dan Rundee From CIS and Mark Green testified yesterday. It was a very good hearing We had in addition Eli Whitney Debba voice and I love the first two names Eli Whitney He was a great-great grandson of Eli Whitney former US executive director for the World Bank and John Murphy from the US Chamber of Commerce provided their expertise and Emphasize the benefit on the United States and US jobs here This hearing process has been an important one So the subcommittee fully understands the role and impact of MBB's on US economic and national security Probably having Congress is not many members really understand the benefit of these organizations and how they really provide jobs and security for This country and we've had distinguished members come before us and explain the benefit of that While the hearing leaves little doubt and I will emphasize little doubt about how critical it is for the US to move forward on Schedule with these capital increases these authorization requests come at a time when Congress is focused on getting our own massive debt under control The timing is actually less than ideal There are the first capital increases We have had to consider in almost two decades because they've done a very good job of the capitalist funded to them originally To overcome this we focused on hearing on helping members to assess the benefit of the MDB's given the current fiscal challenges that are before Congress The hearing illustrated the US leadership in these institutions is of critical importance Witnesses made clear that MDB's are vital to addressing the world's most pressing economic and national security challenges I've argued that at the time when we are worried about fiscal constraints the ability of these institutions to leverage limited resources is exactly What's needed at this point in time by lateral foreign assistance is under significant strain right now The MDB's can alleviate this strain by pooling our resources with other funds the most pressing development in national security issues and needs Can't be met by doing this a great example is that one dollar of us contribute that we contribute to the Ibrd as a part of general capital increase will result in $30 in development lending in African development bank It's huge every US dollar yields more than $70 in lending this approach makes fiscal sense And with US leadership at the institutions we can ensure that the development support is aligned with US interest and that's very important So while we are authorizing spending I would argue that this is a fiscally responsible approach to meeting our nation's economic and national security needs If the US does not make these capital increases the implications are very serious This is a difficult issue before the critical missions that the MDB's perform in promoting peace and stability And it's not and it should be at the forefront of our constituents minds, but it's not they don't really understand this MDB's help foster US national economic security because we have the leadership role in there And we need to emphasize we do have the leadership role while we face critical fiscal choices right now We cannot see grounds to other country and China's would love to take our position They're eager to replace us and other leaders of other countries are too if we do not lead Others will and that's important if we don't lead others will they will set the agenda and the priorities for the MDB's We won't I want to thank you for the opportunity to address you today I'm glad CSI is helping to raise awareness of the critical needs of these general capital increases. I Can tell you that it helps with our job on the hill to have others getting the message out there And we'd like you to do that we need to let other members of Congress know the needs and benefit of what we're doing And I think the undersecretary has done a tremendous job at reaching out We've not looked at this as a Democrat administration and Republican congressman We've looked at this as an issue that's important to this country and an issue need to be resolved I look forward to working with her in the future in you. Thank you for having me today Congressman, thank you so much. I know that you have to be leaving soon to go back to Capitol Hill But we're so fortunate to have you here today, and I'm gonna turn the floor over now to undersecretary Brainerd's undersecretary. I Am Delighted to be here always delighted to be at CSIS very appreciative to Dan Rundy Who has been a very active proponent of sustaining leadership for the United States in these institutions and? I look forward to a terrific panel who will follow to speak to these institutions Julie Katzman, Tony Frato, Dan Price, and Congressman Mark Green all of whom really have a lot of experience with these institutions I want to say personally how grateful I am to Chairman Miller. He has been working very tirelessly with his ranking member McCarthy on this issue and as he said this is really a great example of How America works when it works best and I think it's very appropriate On this issue where we have such strong bipartisan support to be talking about it here at CSIS which really stands for Trying to work across the aisle to do what's best for America and what's best for the world. I want to I want to just start by posing a question That really has more to do with Americans Than directly with multilaterals, but you'll see I think the connection What do Americans want for their future? I think we know a great deal from recent survey data I certainly get the same responses when I travel around the country We know that Americans first and foremost seek good jobs good jobs so that they can provide for their children They can provide for their families and they can expand opportunities for this generation and into the future we also know that Americans want to compete and win in the global economy and Believe that being the world's leading economy is well worth the hard work We know that Americans want to feel that our national security is strong and that we are reducing the causes of war Extremism and terrorism beyond our borders and thereby protecting our borders and we know that Americans Want to build international support for our values and continue to serve as a beacon for people around the world through our support of Democratic transitions and by lending a hand to the world's poorest and to those suffering from disasters and war and of course Americans want to do so in a way that's cost-effective maximizes results and creates strong foundations for growth This is not a new agenda These goals have resonated with Americans for generations Across administrations and across the country American policymakers and leaders have worked to advance this agenda And today as we face a world of constrained resources at home and new challenges and opportunities abroad We have to look very carefully at what tools when institutions what mechanisms best help us achieve those goals while maximizing results for every taxpayer dollar expended and today just as was true 60 years ago when we helped found these Institutions the multilateral development banks are an essential part of that toolkit to foster growth create jobs expand Opportunity strengthen national security and amplify our values Let me talk about each of those in turn first as we work to strengthen our economy here at home We know that we must see stronger global growth so that we can export more Expand our businesses hire more workers the cycle of growth Abroad and here at home helps Americans secure the good jobs They desire and build for their future the MDB's play a vital role in advancing those desires The MDB's have helped finance the development of the heart infrastructure the roads the ports the railways that get our Products to new markets and connect our factories and farms with emerging and developing Economy consumers our businesses recognize the benefits of these multilateral infrastructure investments I heard this recently firsthand when I was talking to a team at Cargill in Minnesota as they describe their expanding international footprint and how Critical a role infrastructure plays in getting their products from American farms to the factories and then to consumers and families around the world The World Bank recently estimated that each additional day a product is delayed between a factory gate and a cargo ship Reduces trade by more than 1% That's why last year alone the World Bank supported over 8.4 billion dollars worth in transport projects around the world The MDB's they were also vital in establishing the soft infrastructure that is so vital to helping our businesses compete the rules and Regulations that make markets work by reducing trade barriers improving property rights and slashing cumbersome red tape The export numbers tell the story over the past decade our exports to many of the countries that have benefited from these institutions have Expanded Brazil exports have more than doubled to India quedrupled and in some places Turkey, Colombia, Indonesia We're growing our exports by more than 200 percent The MDB's also helped to level the playing field The alternative to MDB financing and infrastructure in many countries particularly in Africa is borrowing from countries like China in Contrast the MDB's have rigorous safeguards that we have worked hard to secure to protect the environment uphold the rights of vulnerable populations and combat corruption and they establish fair and consistent rules that our businesses used to compete secondly as Chairman Miller heard in the hearing where Admiral where the admiral testified the MDB's are critical for reinforcing and strengthening our national security and helping to deter the causes of extremism and terrorism that Americans seek to thwart Over the past decade the MDB's have provided five point nine billion dollars in reconstruction assistance to conflict countries In a recent letter to Secretary Geithner General Petraeus and General McNabb noted the key support of the World Bank and the Asian Development Bank in Afghanistan and called their projects vital to the success of the US strategy in both Afghanistan and the region They were referring to projects such as the Ring Road and the Uzbek Afghan Railroad Which are rebuilding nearly two thousand miles of roads so that Afghan security forces can keep the peace as we draw down Our own troops by accessing remote regions these investments in Afghans in Afghanistan Stability and reconstruction have generated two million days of employment for unskilled laborers and Significantly improved crop yields for poor farmers around the country undermining the recruitment efforts of opium cartels and violent extremists National security is also at risk following major natural disasters and the MDB's have been on the front lines Whether it's in Haiti two years ago or the tsunami that struck Acha Indonesia in 2004 In Haiti the Inter-American Development Bank, which Julie is representing today has provided tens of thousands of households Access to potable water and rebuilt schools and roads Amidst the intense suffering of the Haitian people that I saw when I visited last summer were Spots of hope projects that help get people back to work in garment factories help generate light using solar lanterns and help clear Rubble and rebuild all Finance by the MDB's third these institutions help us promote our national values and serve as a beacon Supporting nations transitioning to democratic and open markets We see that today the African Development Bank and the European Bank for reconstruction development are poised to support the historic transformations from Egypt to Tunisia and Beyond the success of these transitions will depend on whether democracy delivers on its promise of freedom and opportunity we know that This potential can be transformed into powerful results. We've seen it happen Just several years back thanks to American support of the MDB's think back to the major transitions that took place over the period Starting in 1988 this period witnessed the fall of communism in Central and Eastern Europe the emergence of democratic governments and market economies financial stability restored in Mexico and Asia Across this intense period of political change growth and opportunity and crisis the World Bank put to work only 420 million dollars from the United States, which was our last capital increase in 1988 More than 20 years ago, which enabled in the intervening period $325 billion in development investments This I think helps point out the final point that I would make just about the leverage and the results that These institutions produce and why our leadership matters our investments through the multilateral development banks provide a greater return for US taxpayer dollar than any other foreign assistance investment Our contributions to all of these institutions together accounts for only five percent of the overall US foreign assistance budget But each year mobilizes funds that total more than one and a half times that entire account This leverage matters greatly in today's intense budget environment No one nation no matter how powerful can meet all of today's challenges alone through the burden of sharing arrangements We negotiate in the multilateral development banks the other Countries that also have strong interests in these goals pay their fair share and multiply each dollar that American taxpayers invest But of course the numbers are only part of the story and congressman Miller alluded to that at the World Bank We currently have a veto over changes to the article of agreement which preserves our leadership And also important reforms on things like procurement on Anti-corruption on safeguards at the African Development Bank We have our own board seat and can influence regional development in places like Egypt and Tunisia Other nations like China are very eager to take up our shares in any of these institutions if we fail to meet our commitments When we originally helped to create and we were Centrally the shapers of these institutions at their inception 60 years ago We did so in order to reduce trade imbalances blunt communism and economic nationalism restore growth and assist countries undergoing Transitions today we still need these institutions. The world is vastly different today than it was in the 1940s We face greater competition to our influence and ideas We have to husband our resources more carefully and we confront a different set Threats that are perhaps more complex But that makes our support for these institutions more important than ever It was President Reagan in 1988 who advocated for the last general capital increase for the World Bank that year But it was a Democratic Congress that approved it today with Chairman Miller's leadership and the bipartisan Coalition that he has formed and with the panel that will follow you can see that bipartisan legacy Thrive and I thank you very much for the work that all of you are doing here today And hope that you will help us as we seek to continue America's investments in these vital institutions. Thank you Give the chairman a second to take up. Thank you very much for being here. Thank you Under Secretary Brainerd is kind enough to to be available for a couple Q&A's so I'm going to do this World Bank style having worked at the World Bank So we're gonna group three questions together and then the Under Secretary can then answer them and in the order that she would like so we have microphones here, so I'll people want to raise their hand they can name and Also in the form of a question in the form of a brief question, right? So we want to model brief questions, please So the gentleman in the front The woman there and then the gentleman in the middle room. So, okay, sir I'm Dr. George Alula. I'm an entrepreneur from the Democratic Republic of Congo I just want to ask a question Which is relating to the situation in this country very rich in natural resource They say that we have 23 trillion of gold reserve known and unexplored it so My question is he is on the form of why the Democratic Republic of Congo, which is ongoing a genocide there cannot benefit in a kind of Marshall plan like the European continent benefited in 1944 the Defense it will not be a Marshall plan like like it was in the past only supported by the US but today We imagine a situation a solution which For 140 billion this country can be revoked By putting together the US leadership and the G8 G20 countries. Thank you very much. Thank you Okay, the woman there. Thank you. I'm Karen Ornstein with friends of the earth Sorry. Thank you for your talk. I had a question. I think you've painted a very Positive picture of the World Bank and the MDB's and I think a lot of and a lot of the changes that have been in place At for example, the World Bank have come through the power of the purse Namely safeguards inspection panel etc. And so but now we see safeguards procurement policies Anti-corruption very much under attack with a program for results Which the new lending instrument that they want to rush through that would potentially leave less than 10% of bank lending Subject to these important safeguards and policies and we see the World Bank talking a lot about energy access But if you look at their energy lending portfolio, you know between 2009 and 2010 zero percent of their fossil fuel financing went towards energy access and they have an Exponential increase in energy finance between 2006 and 2010 so my question is is if most of the gains We've achieved at the bank have been achieved through the power of the purse through congressional leverage Why would we squander this important opportunity to change the direction of the bank when it's in serious need of reform on energy? Financing when they're trying to plow through this Program for results lending And I'll leave it at that. Thank you and the gentleman there Thank you. I'm Alessandro Pio the head of the Asian Development Bank office in Washington DC You mentioned two topics the importance of US strategic interest and the leverage that these funds generate in the case of Afghanistan for example where their reconstruction following the transition will be critical Afghanistan is actually not using general capital funds But soft funds like the Asian Development Fund in our case and they're also there is an important leverage because The US only contributes about 10% of the total pool So out of the billion dollars spent in Afghanistan only about a hundred million was US funds in the last four years To what extent is there an appreciation for the need to also complement the capital increase with soft funds for the same Purposes in the countries that are conflict affected or the needed the most. Thank you. I got you all the easy ones under Secretary So I'm sorry about the so I'll Well, thank you. So why don't I take them in reverse order as my comments today really were encompassing both the general capital increases which take place once every 20 years or so Where that capital just keeps on working over the subsequent two decades as well as the leverage ratios that were mentioned of 1 to 28 For instance for Ida the soft loan windows, which are on Somewhat more concessional terms that are very important in places such as Afghanistan What I will simply say there is I think there is strong bipartisan support both for the capital increases as well as for Ida African Development Fund The concessional windows of each of these institutions and what we've done in this last set of negotiations around the general capital increase where we do have some leverage is to strengthen the financing model of each institution so that there are flows that are coming off the lending to The to the hard loan window that then get cycled back into the soft loan window So as you I think are pointing out the US gets even greater returns for its funding Because of the financing model that we've worked out and the pricing on the loans, which means that there is a return So that the poor countries really benefit from that. So we think in each institution IDB African Development Bank Asian Development Bank World Bank EBRD is a little different That there is now a financing model which really encompasses our goals as a nation Which is to make sure that countries that are borrowing from the hard loan window with slightly better economic prospects are then plowing that money back Partly to the concessional window and and that's helping to leverage our taxpayer funding with regard to energy all I can say is that we've used our leverage extremely effectively and the bank I think senior bank management is very committed to greening their energy portfolio to energy access to renewables and You know, we see that obviously we have a these are institutions that have Membership from all around the world and so these are negotiated Processes, but we have seen both with the core resources of the World Bank and with the SIFs the climate investment funds that sit alongside them and help Multiply the impact of their green energy investments that there's a very strong commitment We have at the US Treasury as you know promulgated a new energy policy, which really puts very tough constraints on our Own support for energy projects moving them much more over to the renewables And we're looking very hard at some of the proposals that you mentioned P for our for instance and making sure that it in no way Undermines any safeguards indeed that to the extent that programs like that go forward that they are very carefully designed to ensure those safeguards are multiplied and they are actually Increasingly seen in the actual domestic processes of some of these countries and finally with regard to questions about a Marshall plan in post-conflict environments obviously the Multilaterals can play a very important role in bringing Resources to bear in a post-conflict environment. They also play a very important role in some cases in helping to contribute to forces that will prevent conflict but of course they need to be lending or Making grants or providing technical assistance into an environment where that assistance will be well used and at that juncture I think they can play a really Critical role as they did for instance in Liberia and and we look forward to there being able to do that with international support as Conflict is resolved Great, we have to unfortunately we have to move on I want to honor the Undersecretary schedule and we're going to move on now to a to the panel discussion So please join me in thanking Undersecretary brainer for being I'm gonna ask my my panelists colleagues to join me up here. Thank you Okay, as we're getting getting the name tense set up I'll just make a couple introductory remarks and just say that I think what you've heard from two very Distinguished leaders on this issue and now we're gonna have a chance to go a little bit deeper and understand what the Consequences are of not participating in the general capital increase but also what the contributions are of the multilateral development banks are to To us national interest and to development more broadly We have a very distinguished panel Representing folks from the multilateral World also folks from prior administrations and voices from the international development. So we're we're very very fortunate You each have their biographies in front of you, so I won't go through through them But I'm gonna ask each of the panelists to make a Several-minute opening Statement or make a comment to share their perspective on this topic and then we'll have a discussion and then we'll open up for So without further ado, I'm gonna hand the floor over to Julie Katzman Julie Well, thank you, Dan, and thank you to you and CIS for inviting me here to talk about Multilateral Development Banks and national security and the importance of the general capital increases and why they're a good investment for the United States You know the best way I find to tell this story is to have people come visit our projects However, that's a little bit impractical today So you're going to have to make do with the words that I've got and hopefully I can transport you to a couple of places to see Some of the work that we do. I'm the executive vice president and chief operating officer of the Inter-American Development Bank So I'm the designated practitioner on the panel and I'll try to be a little bit concrete about the kinds of things that we do And I thought much as as both the chairman Miller and Lail commented about Haiti that I would start with Haiti where the IDB is the leading source of Multilateral Development Assistance in the country and as a result of the GCI We have a 10-year commitment to make 200 million dollars of grants to Haiti over the next 10 and a half years for a total of $2.1 billion Now some have defined delusion as doing the same thing over and over again and expecting a different outcome And I think it's fair to ask why we expect a different outcome in Haiti this time And the general capital increase is a big part of the answer as to why we do in fact Expect a different outcome and that's that we have this multi-year 10-year consistent commitment that allows us to plan it allows us to take undertake Capacity building and follow through with the kinds of investments to take many years to come to fruition and the second is Related to that the sectors that we're playing in the IDB's Focus is on six sectors But two that are really what we see as game changers in the context of Haiti going forward The first is education where today 35% of primary age school children or 600,000 children are not in school and To change that requires a complete change of the way in which education is delivered in Haiti from the financial model to the Infrastructure to teacher training and together with the government of Haiti the IDB has worked on a new Education program that's being supported by a multitude of donors and will change that set of realities on the ground The second is in the private sector And the private sector development that we're doing and the cornerstone of that development from the IDB Perspective is a development of an industrial park in the north of Haiti together with the US government that industrial park Which already has its anchor tenants will employ 20,000 new people in the garment sector in Haiti That compares to about 15,000 garment sector jobs in Haiti as a country today The more we create economic opportunity on the ground in Haiti The less we see immigration from Haiti to US shores and that's a direct impact on national security now All of this requires the GCI The US's participation in the GCI is 102 million dollars per year for five years 102 million dollars paid in to the IDB 200 million dollars paid out by the IDB just to Haiti in grants over five years The US pays its contribution of five hundred and ten million dollars and over ten point five years We pay two point one billion dollars out to Haiti. That's four times leverage on that money That's just the Haiti piece of the GCI in addition The IDB is able to double its lending to the region which means more people leaving poverty more consumers being created increase in merchandise exports to the region and Last there is a whole host of reforms whoever was asking that question earlier that the US has used its Significant influence to put into place in the context of the GCI I'm going to tell one other piece of a story and let's go to Mexico So if I say Haiti you say earthquake if I say Mexico you say Zedas probably today Or drug cartels But there's so much more than that going on on the ground in Mexico today And I'll take you to a July 5th, New York Times article which pointed out that emigration from Haiti to the United States is at a 40 year low and That's important because six out of every ten illegal immigrants in the United States are from Mexico So why is that happening? Well, the article goes on to say that there's a growing body of evidence suggesting that a mix of developments in Mexico Including expanding economic and educational opportunities and shrinking families are Suppressing illegal traffic as much as immigrant slowdowns or immigrant crackdowns in the United States These expanding economic and educational opportunities are exactly the kinds of things that the IDB has been investing in for the last 10 or 15 years in education That's innovative programs that have increased advancement to grade level on time through conditional cash transfers That have increased attendance particularly of girls that have increased investments in in school Infrastructure and have done things like testing Financial incentives to increase and improve outcomes It's an improvement in infrastructure to small towns all over Mexico So that people have water and sanitation and electricity and it's support to small and medium-sized enterprises in Mexico So if I translate that into some of the specifics that were in the article in Jalisco, which is the state that brings you to Kila and There's a boom in Jalisco as a result of the tequila boom Let me just say and we've supported the the tequila growers the number of high schools between 2000 and 2009 has doubled In Jalisco to over 700 high schools and 13 of those are science campuses dedicated science campuses And the outgrowth of that is that one of the people in the article said 18 year old I'm not going to the United States because I'm more concerned about my studies And that's an amazing change The number of professionals with bachelor's degrees or more has doubled from 800 from 400,000 to 800,000 And this is true in the poor states in Mexico like Chiapas and Oaxaca in the south where the professional degree holders have also doubled from 250,000 to 500,000 plus This is similar to the other in the other 26 countries in the region where we work Where those who have escaped poverty number 40 million over the last decade the wealthier We make this region the more secure we make the United States So quick thing on why is this good business for the United States the capital increase first? We make money. We made 800 million dollars last year at the operating income level Second this is an investment our loans as evidenced by our operating income are repaid with interest No government has ever defaulted to the to the IDB Third for every dollar that the US has invested in the IDB a dollar 35 has returned to the United States in disbursements to US companies Fourth we're a key partner as Lail and Chairman Miller said to promote economic liberty and strengthen democracy and institutions throughout the region and last we are the second largest merchandise export market of the United States in Latin America and the Caribbean $300 billion of exports in 2010 second only to the EU and more than three times the level of China and Last let me conclude with what happens if we don't have the GCI well The IDB is unique Our charter does not allow the United States to be diluted Our our speakers earlier commented on if these capital increases go forward without the United States The US loses its percent ownership. Well in our case the capital increase does not happen So what that means from an economic perspective is we have to cut back our lending by approximately 50 percent when we're on the verge of a very fragile worldwide economy and The grants to Haiti not likely to happen Second and perhaps more importantly from a political perspective This would have a serious effect on US standing in the region and would create an opening for proponents of alternative financial institutions which arguably have much lower levels of safeguards and Have a different political agenda than that of the United States and last as was alluded to earlier There are countries who are investing heavily in the region who are looking at more influence more markets and A greater way to exert their presence in the world So for all of these reasons and many more that I hope we get a chance to discuss on the panel We at the IDB are very hopeful not only that Congress supports the GCI through its authorization Legislation, but that it fully funds the IDB's capital contribution. Thank you. Thank you Julie Ambassador Green Thanks, Dan and thanks for having me and it's always an honor to be here at CSIS I'm Mark Green currently senior director at the US Global Leadership Coalition US GLC represents a wide range of Entities from major corporations like Caterpillar and Walmart to humanitarian NGOs like care and world vision We are a coalition of foreign policy Military faith-based leaders in every state all of whom come together behind the simple concept that we need to support American engagement and we need to support our civilian tools of diplomacy and development of which the MDB's are a crucial part now try not to be repetitive from what Julie and Dan have said and Like Julie I look forward to to addressing some of your questions You know first off it goes without saying that members of Congress both sides of the aisle both houses have tough choices ahead of them This isn't easy. I think we all know that and I really want to tip my hat to chairman Miller We were elected together back in 1998 But this is difficult work in the context of the fiscal and political challenges that That we're facing for a leader like chairman Miller and the ranking member Congresswoman McCarthy to go to bat and to push real hard to do what is I believe the right thing to do from a policy perspective That's real gumption and I think they deserve our gratitude I'd like to offer a Handful of reasons why I think this is an America's interest with a particular emphasis on security because I believe that any objective analysis Of these questions will lead us there to that first off my own view is that this is simply put an obligation of leadership this is what the America America as a Global leader needs to do in the general sense the rest of the world looks to us and Looks to our leadership in the projection of values that our policy choices including our budgetary choices express in the particular sense the United States through its leadership in many of these Multilateral development banks has played a role in encouraging those institutions to step forward to help rebuild and repair whether it be in Haiti whether it be in in North Africa You know we have encouraged and helped these institutions to step forward to do the right thing and to make a profound difference and It would be troubling I would say that At the very time those institutions now need us to step forward and to help with replenishment If we were somehow to step back and step away I think that would be dangerous for those institutions and send precisely the wrong message Second reason is what my staff refers to as the dance with the one who brought you argument. I Think history shows us that as developing nations emerge They tend to reflect the values the institutions of those organizations and nations that help them get there and As we see rapid development and emergence taking place in regions like sub-Saharan Africa the fact that the US through both the International Affairs budget and the broad range of development and diplomacy programs and It's support for the MDBs I think it's in our interest for those emerging nations to develop procedures and institutions that reflect our Values our values being capitalism private investment Transparency anti-corruption Rule of law all of those things that our entrepreneurs need in order to be able to invest and succeed But also again is sort of our view of the world the way that countries should develop And so our support for all of these programs including the MDBs is very very important from that standpoint as others have said there are alternatives out there to American engagement and American leadership and the MDBs there are alternative sources of funding I think we all believe it is in our interest if those nations emerge You know trying to tap into the model that has succeeded in in the West and been so important third I believe there's value in the partnerships that we build not just partnerships with the The nations that are receiving the benefits of the loans and in some cases grants But also in the cooperation and burden-sharing that takes place among donor nations. This is one of those areas in which we are building Affirmative positive relationships and partnerships that are helping to define world fortunes. That's a good thing That's good for the US And I guess I'll close with this and Wait for questions I think the most important reason from a national security standpoint is when we take a look at the threats That are emerging in this world What the great threats are to our national security? We recognize in many cases. It's not the traditional clash of major powers The state versus state conflict risk that we saw for so many years for decades that that I grew up with we're also looking at Weak states and failing states as being states from which danger can emerge While poverty does not cause Terrorism and we need to be very clear in that and say it over and over again We also have to recognize that abject poverty True destitution is a condition which sometimes leaves to despair and that despair can be a condition that Extremists seek to exploit if we can be involved if we can be playing a Leadership role in addressing those conditions that can lead to despair good for us and If we can be seen as doing it even better for us That is in our interest and I believe that is a matter of Of national security Secret former secretary of state rice put it very well a couple of weeks ago in a speech that she gave where she equated In modern times the distribution of bed nets to fight malaria And by the way the World Bank is the third largest funder of bed nets in the world To gi's passing out candy to children in Germany shortly after World War two and and I thought that that Parallel that image was a fitting one because it is also Building our brand if you will it is polishing up our image, and I think we all agree that's positive in this world today Thanks, Ambassador Green. I'm gonna hand the floor over to Tony Frato Tony Thanks, Dan. Thanks for having me and you know first it's when I associate myself with the actually the comments everyone made especially You know Gary Miller and Lail brainer who are two just remarkable leaders in trying to get get this done and and and probably have you know one of the most if you think of you know the most difficult job in Washington today think of what they're trying to do is to spend more money Overseas and put it in the hands of international organizations, right? I mean could there be a more difficult Job in Washington today in the current economic and and fiscal environment that were that we're dealing with and and they haven't Shied away from that challenge, and I suspect one of the reasons is that they they know a little bit more about What the what the multilateral development banks are doing and accomplishing that and then others do I I? Occasionally get you know usually my on my Twitter feed get You know accused of being the you know the soft-headed Republican on international, you know global health and development Issues and you know it's these he's pro immigration he's spending on on on foreign assistance and emergency Health and and food programs and you know so you know maybe you don't want to trust him and and what you know maybe some of that is True, maybe I am a little bit, you know soft-headed on on the need for it, but I'm actually You know actually very hard-headed on the way the multilateral development banks Work and function and the effectiveness of their programs, and it's actually because of my hard-headedness from an economic standpoint why I support where the MDB's are today in the work that That they're doing and you know so you see we have seen in recent years criticism of Of the model that that the World Bank and the World Bank Group and bilateral development Programs have been have employed, you know over the past 50 years being people like Bill Easterly and You know more recently Denbisa Moyo and and some others, you know very very critical of the work that And the effectiveness of international development programs and sometimes I look at that and I see their point But most of their point is focused on a On a on an MDB model that we don't actually have today But it's one that we've had before and where development bilateral development programs in particular were once Before and so what we've seen over the last 10 to 15 years is a remarkable Transformation in the way the MDB's work the way they administer their programs the way they collaborate multilateral and and Between multilateral programs and bilateral development assistance agencies on their burden sharing on their on their focus to avoid redundancies on robust Measuring of results on transparency on governance on across all of these areas that we consider critical to The effectiveness of international development. We've seen Enormous improvements Among the the multilateral development banks and if you think of the criticism if we're thinking about the United States and support for these programs What the criticism is? It's based on those old conceptions of what what the banks are doing it is that they are That they're wasteful that they finance corruption That they're you know that they're redundant that we don't see results. They're not transparent And all of those things have improved, but that's not a story. That's been told Here and it's it is not at all well understood certainly not among the American people and and most concerning not among the Many members of Congress who are making financing decisions for the banks. So I you know, I don't want to go too long. I really want to get into Questions and what we do but what we can do about that and and what you know how critical it is. I mean it a congressman green talked about The you know, what was the dance with the dance with the one who brought you you know I think maybe like maybe the you know, the flip side of that is Of that of that record We've been world enough to remember records There was a B side, you know, so if you can't be with the one you're with love All right, if you can't if you can't Be with the one you love love the one you're with right and so we can make a national security argument that you know If you especially in Africa, you know, if they can't be with the one they love which they Look at the highest ratings for of support for any country in the world You go to Africa and the reputation of America and Africa is extremely high higher than anywhere else in the world But they're dancing with The one they're with and that's China right now because China is coming in with a lot of cash and no strings And so that's a there are there are You know diplomatic concerns for United States national security concerns for the United States There are American leadership concerns for the United States as Julie talked about their commercial Interests for United States all of those interests are Are are really important? But I go back to just the question of Effectiveness because I think the American people and I think our record shows this are we have we have created the most generous You know society Probably in the history of mankind giving in all kinds of different ways philanthropic dollars are you know are just very very high levels then that's even setting aside the the official Programs so but I think if you can Show the American people that there are results That their money is being used wisely that it's having an impact The American people will want to be generous and they will support those kinds of programs PEPFAR is an example of a program that Most in most in the world a man in this country would not have expected to see such strong bipartisan support for what PEPFAR was and is exceedingly effective at doing is showing results for You know American finance All right, they can show actual numbers they can count they can count the number of people who are alive today They can count and are very very Committed to counting and showing those numbers of the number of people they help and the number of people who are alive today And so you see bipartisan support and you see general support from the American people for a program like that We need to do it with a lot of our other programs and start telling the the the success story of Multilateral Development Bank programs how that money is being is being spent wisely and The and the greater return all of all of those the issues that we talked about and but the greater return on on that investment for the American people and I think they'll be Supportive and they'll support members of Congress who have the courage to go out there and and back these programs And thank you, Tony. I'm gonna hand the floor right out of Dan price Dan Thank you very much Dan. Thanks to CSIS for organizing this important event Like Tony, I agree with virtually everything that was said by the speakers before me Which makes my job easier? I don't have to say much Let me just say this to me the question of whether the United States Will fund these capital contributions boils down to this Will the United States agree with the America in Declinists that you see on virtually every op-ed page here and in Europe Or will the United States Maintain its engagement and a leadership position in global affairs To me that's really it. It is self-evidently in the interest of the United States To promote global economic growth to promote democracies rather than Theocracies to promote accountable governments and the rule of law and These multilateral development banks in particular through their technical assistance programs do just that They provide advice in establishing regulatory regimes in establishing ministries the mechanisms of government that promote Accountability that promote transparency Let me give a concrete example of what in some countries was regarded as a revolutionary Concept that's universally supported by the MDB's and that is the notion That when you apply for a permit or a license or a permission from government and It denies you it must give reasons It must give a response within a particular time limit And the individual denied has a right to appeal To appeal to an authority other than the one who denied him the license The support of these organizations for private sector development as opposed to state Oriented or state controlled economies is also critical One of the interesting things that those of you who follow the Soviet Union and the post-Soviet world may have noticed is that as soon as Private ownership was allowed The demand for home improvement and people actually caring about the places that they lived in spiked dramatically There's a debate particularly since the financial and economic crisis as to whose model works Whether it is the private sector market-oriented democratic model messy as that is Flawed as it sometimes is as in need of repair as we can acknowledge Or the other model and there are lots of proponents of the other model Who enjoy significant surpluses and are ready to step in as we step back? I won't repeat all the arguments that others have stated eloquently But again to me it's a very simple question as to how the United States conceives of itself of its role in the world and its responsibilities Thank you Thanks, Dan. I'm gonna take advantage of being the moderator and ask a couple questions I'm gonna ask one specifically to Julie and then I'm gonna ask one to the other panelists and so I'll put them out there So you both can think about that you won't have as much time to think about So you can see that coming but This issue of our ability as the United States to impose Rules of the game or standards if you could think of an example Where the United States has in the case of the IDB? Pushed a certain line a policy line that if we weren't there if we didn't have a leadership role Wouldn't have happened and why that would have been a bad thing if you could think about that And then I guess the question for my my other colleagues on the On the panel is I'm thinking of Ambassador greens from Wisconsin. I'm thinking about I have a from a very large family And I have many aunts and uncles that live in Wisconsin. They pay taxes. They're patriotic Americans. They go to church on Sundays They believe in American leadership in the world if each of you could just think about Not in think-tank terms, but think in terms of Thanksgiving table terms if you were talking to my aunt and uncle in Wausau, Wisconsin about this If you could just think about what would be your clever What would be your your simple a respectful but but clever way of phrasing this because I think members of Congress I think need some help in terms of thinking about this of them and they go home to town hall meetings So, I mean I get paid to think of sophisticated ways to frame this and sound smart about this But I'm not quite sure that that that translate to the Thanksgiving table So I would like to ask the other three panels to think about what if you were at a Thanksgiving table in Middle America where this is going to matter or or a town hall meeting and you remember Congress and you were going to Raise your hands. I believe in this What are the what are the two or three bumper sticker things? You'd say that are respectful of the of the questioning of it But do it in a way that that is maybe not not in think-tank talk. I guess is how I'd frame it So I guess that does give you a second Julie to think about it because I gave you a it gave long Okay, so so I'd say first Environmental safeguards Right, so it's it's certainly the case that there are other countries in the world who care about environmental safeguards And I don't mean to imply otherwise, but the US has clearly been at the forefront of Making sure that the safeguard regime as it relates to sustainability as a whole not just the environment but Biodiversity gender etc. Have those kinds of reforms and requirements have been put in place early And they've been strengthened continuously as we go now then taking a Slight twist on that which is for example in our capital increase one of the requirements is that 25% of our lending be for climate change by 2015 and that also is something that was very high on the US's agenda In the in another one of those Was 20% of our lending in the private sector toward private sector development? So I think those are things that the US is fingerprints are on very dramatically in the less sexy less Thanksgiving table orientation The US was adamant and and Lail alluded to this about sustainability of the institution So as a part of our capital increase, there's a requirement that 90% of our administrative budget be covered by loan charges So to ensure that that income that's going to fund other things like the less Developed countries and the soft windows is available because it's not being used to backfill administrative budget And that was something again that is a little bit more esoteric, but very much led by the United States Thank you ambassador Yeah, I don't know if I have a bumper sticker, but you know Look use Wisconsin as as the example You know we have by the way they're Packer fans and they are Packer fans as everyone should be of course But you know in Wisconsin we have manufacturers like Trek and Harley-Davidson and Oshkosh truck and SC Johnson We're farm country my in-laws are farmers and it's corn and soybeans What unites all of them is the understanding the appreciation that 95% of the world's population lives outside the United States and A Foshkosh truck or my father-in-law the soybean farmer can't have access to markets overseas throughout a business My father-in-law should plow those fields under an Oshkosh truck might as well close the doors So the question becomes How are we going to increase? The ability of American entrepreneurs to compete in these emerging markets in sub-Saharan Africa Projected growth rates are two three and four times greater than domestic markets What we're talking about is support for institutions that are helping to lay that foundation That are creating the conditions that our entrepreneurs need in order to compete It's not just a trade deal that they're looking for they're looking for institutions that promote rule of law Transparency time limits on on permitting requests If we're able to get those things done and I think the MDB's play a key role in helping that happen Our entrepreneurs will compete and quite frankly will succeed in any market But unless we are in there supporting those institutions that make those changes we will see that 95% of the world's population You know perhaps gravitate gravitating towards some of our competitors and that would be bad for our job creators Thanks, Tony. Yes, I did. So Mark You mentioned it's you know, it's one of my favorite, you know, since this is right 95% of the world's population Other that means that's you know, that that's our those are our potential Markets and I look at that and say okay now now imagine if half of that 95% lack the means Right to to actually buy where they could have you know way if they they could even have the appropriate laws in Africa, you know Africa has now I think 730 bilateral investment treaties with other governments, you know to protect the interests of investors in in Africa Dan is an expert. You can tell me whether they're, you know, which ones are really strong and Beneficial and up but at least you know, you see that Africa moving in the right direction We're thinking about its investment climate But if you have half of that 95% Lacking the means to buy those products produced in in Oshkosh and then Then you know, it's not a question of access to the market as much as it is just you know, the ability of those Economies to purchase and trade with the things that you you know that where we have a comparative Advantage, so if I'm sitting across, you know the Thanksgiving table, you know, there some people don't quite see the benefits of trade So you may have to convince them on On the benefits of trade and grow markets, but where I start with some people's I just asked this, you know Sort of a simple counterfactual Question historical question that is you know, do you think the world is a better place? For having the economic engine of the United States of America Right is the world generally better off economically as a global growth for the emergence in the last century two centuries ago now as of the United States as a Enormous engine of growth in the global economy. I think, you know pretty much any Rational observer would say of course. So then why would it not be in our interest to Create more United States of America's out there Not in our you know identical images, you know free Democracies although we'd like to see that in our commitment to capitalism although we'd like to see that But just as an economic engines would the world be better off if we've multiplied the numbers of United States of America's out there as economic engines, and I think the answer is unquestionably Yes for every citizen of the world. So let's get on with it Thanks, Joe and Dan two points first on your question about examples of A different approaches taken By MDB's or by other funders. I'll give you a concrete example This was at a time when the United States was seeking to normalize trade relations with Vietnam and virtually every Development assistance Organization in the world was sending people to Hanoi I went there Funded by a market oriented us oriented development organization But I wasn't the only one there and on the issue Again a concrete example the issue of import licensing and import monopolies That is should a state Assign a Single entity state owned or privately owned to have the monopoly right to import a particular class of goods or Should the importation of goods be subject to an import licensing regime administered by a single entity My view was not surprisingly. No No, there shouldn't be import monopolies. There should be competition There shouldn't be this import licensing regime that kind of shares economic rents again It should be based on competition That was not the view taken by one of my co-panelists at this session funded By an organization from a country with a different point of view closed economies Concentrate economic power whether in the hands of the state or in private sector oligarchs That's not good That was the concrete example Thanksgiving table. I would say this Prosperous societies make better customers for the United States number one and Stable societies hopeful societies not you know ribbon with despair Means fewer Americans being put in harm's way to maintain the peace Thank you very much the audience been very very patient I'm gonna call in a couple people do it in bank style So I'm gonna call on my friend in the back row here the lady back here my friend Bob Berg and then the lady over here We'll do it in that that order Yeah Just a quick comment going back to your question about where was you US leadership particularly important at the MDB's Over the past two decades US leadership on the anti-corruption issue has been absolutely pivotal And while nobody ever supported corruption, I think without US leadership We wouldn't have the progress we've had and it's been considerable At the MDB's and as the former there was a question raised earlier About lending for results It's a rather arcane issue But I think what was important about it is to point out that the threats to progress still exist There are forces within these institutions that would like to roll it back For competitive advantage and for other reasons and so continued US leadership I think is vitally important as it is more generally on anti-corruption some of your panelists have been really very important to Putting and keeping the corruption issue on the anti-corruption on the international agenda g8 g20 And so forth. So I think when you're talking to people about both development effectiveness and also clean and Hospitable operating environments for US business continued US leadership of these institutions is vital Thank you very much. Maybe we'll ask the Panelists just comment on that issue of corruption after they we hear from the other two my friend mr. Berg Thank you very much When I was Trying to think of arguments for the Hill when I was in the Coolidge administration at AID I Often found that by admitting that we had challenges and difficulties That we got away from Claiming once Wisconsin II That our herd was the only one that gave all cream and I'm wondering if you were writing legislation on the Hill now What new powers might you want these institutions to have or Issues that you're worried about that you wish they were addressing because I do believe that we have to approach the Hill with Realistic notion that all institutions need improvement And Well, we're proud of the MDB's that we want to be good friends to them and help them overcome these and future challenges Thank you, Bob. I actually will jump in on that one as well And I'm gonna actually just ask the indulgence of the third woman woman over here I'm gonna ask That my my friend could call in Clare Moran who's back here who's the diffid representative here in the United States Clare, please why don't you go next I'm gonna ask you to go next then there I call there's a woman over here, and then we'll have another round of questions as well Clare, please go ahead Thanks for a really excellent panel. I think you've made the case extremely well I know this event is generally focused on the capital replenishments and one of the things I wanted to highlight Was the concessional funds? and my sense is when it comes to Shareholding ultimately the things that we shareholding will get funded But whether shareholding isn't at risk that there's a very real threat that the concessional windows So the kind of soft money that goes to the most fragile most poorest countries is actually the funding that's most at risk And my sense is there The other nations that you've talked about will not be stepping in to pick up the tab and the sort of signaling effect for Europe Because it's certainly being debated within my organization is very very strong So I wonder if you could just talk a little bit about the concessional funds and what you think will happen if they're not funded Thanks, can't just this there's a woman back here and then we will do a second round of Question there was what was this woman here? Yes, please Then we will do a second round of questions. Yeah Hello, my name is J. Diarton. I'm a student at Georgetown University and also I'm interning here as Ambassador Green said one of the benefits for giving to the MDB is that it helps spread American values such as Capitalism as you said, however, one of the major criticisms of Banks such as the World Bank is that it's majorly like American dominated and it doesn't Spread global values enough. So I was wondering for legitimacy purposes I understand that the leadership of the World Bank or other organizations are mostly in front of American professionals But would you think that maybe diversifying a little bit would help the bank as a whole Thank you. Okay. As moderate. I'm going to jump in on a couple of these and then I'm going to let my my colleagues I Actually think the critics that I'll respond to this one first. I think I Think that the the World Bank and the multi development banks are exporters of an American form of globalization There are other alternate versions a darker versions of globalization that don't emphasize corrupt anti-corruption measures don't emphasize labor and environmental standards And don't emphasize democratic regimes or or or or free free markets. And so I believe that It's important to have Significant American leadership in them And I think it's very difficult to sell to the American people Something other than that I think if we want to if we want to continue to have leadership in them if we want to continue to contribute to them We're going to have to have significant American leadership and influence over them And so I think the answer to that one would be would be no On the let me just take this issue of legislative powers Then I'll ask the panelists to respond to any of these that they want to take on I think one of the problems of the multi-development banks having been having been Beneficiary of working for one of them for four years is I think they don't do a very good job of dealing with the tough Dumpy places. That's a technical term. I learned it at a think tank That we there don't yet I think they still need to strengthen their ability to Respond to failed and failing states in terms of conflict better I think the models the processes the plumbing are all set up for sort of benign middle-income countries And I think that we need to develop a stronger cadre of folks that are that are comfortable in the toughest worst places and to have Modalities of funding and assessments that think in those terms as opposed to doing a three-year assessment for Ring Road in Afghanistan frankly isn't appropriate and we need to have folks that are paid and promoted in that way Certainly there have been strides strides made in the last 10 or 15 years since the Balkans But I think that there has not yet been enough in the multilaterals at least in the MDB's in that area I'd also say I don't think we should be mucking around and that's another technical term With the doing business agenda and the economic reform agenda that the United States starting with the Bush administration But also supported in front and supported by the Obama administration Have led by the World Bank, but also with great Great work by the Inter-American Development Bank on sort of economic reform work We shouldn't be screwing around with the secret sauce of making those sort of economic reforms change And sometimes there's been some push back on the hill. I think sometimes I think count my view counter productively on that so stronger stronger conflict Capabilities and let's not let's not mess with the secret sauce of economic reform That's my my view. So I'll open the panel to responding to any of those, please I'll just say that I appreciate the person who just left who talked about Anti-corruption because it was a mistake of mine not to obviously that is a huge issue one that that is a big part of What we do in the framework that we've brought and the kinds of reforms that we've brought to countries and it is really essential and and The concessional window questions so at least at the IDB our Concessional window is in fact fully funded that piece of it has actually gone effective And as a part of the capital increase we're increasing our lending to the smallest and most vulnerable countries to 35% of all the lending that we do Last year we were at 33% already. I expect that will probably surpass that goal and It's the the the financial reforms will make that sustainable through 2020 So I think that the concessional window is actually it's a smaller window for us, but it's actually in relatively good shape The leadership diversification, I'll answer a little bit differently because the IDB actually is a little bit different The president of the organization is always somebody who is from the region and I benefit from the The thing that you're concerned about which is I'm an American and I am the chief operating officer and that is also the case but but I think so I think that there's a balance between diversification and enough presence so that The kinds of things Dan was talking about people on the hill and others can buy into There is a tendency in each of these institutions to have Perhaps a little bit too much of the passport Mattering and what we're all trying to do I think is to move to a place where we're hiring the best athlete And and that's what we're trying to do as well So and I think all of the institutions can benefit from more of or anyway ours can Can benefit from more of that but it does have to have a bit of a balance when you're trying to make sure that the political Support for the kinds of funding that you need is in place So it's it's not such a black-and-white kind of world And then lastly that the question about what else could be in the legislation Really as a recipient of that kind of stuff. I would say the kitchen sink is in there No, I'm overstating but the US Treasury has done an excellent job in the case of the IDB from the perspective of the US taxpayer of Putting lending targets results frameworks and new financial safeguards increasing lending to small and vulnerable countries and Each one of these things which is a part of the reform agenda encompassed in the the general capital increase Make the institution in many ways stronger I would say that it also makes the institution in many ways less flexible and again. This is a world of gray You know, you have to be careful about maybe this is your secret sauce thing, you know You have to be careful About putting so many restrictions in place in the interests of creating a better institution that you destroy the flexibility of the Institution to respond to events on the ground in a way that that works for those who remember are borrowing From the institution. So, you know, I think there's a balance there that has to be maintained Any and all those questions for the other three sure and I'll I'll be brief so we can get to a second bank of questions And I want to associate myself with much of what what Julie said first up. No one's suggesting that these institutions are perfect Man is inherently flawed and there are no perfect institutions. However What I think is also clear is that there these are evolving and improving institutions and I think a lot of credit needs to go to U.S. Leadership in doing that and it's something that need that we need to reaffirm and enhance wherever we can Two other quick points what is clear to those who are perhaps Not so solid in their support for the replenishment requests. There is no circumstance in which the U.S. Not fulfilling its obligations or withdrawing will enhance these institutions and continue the reform agenda that is indisputable Yes, finally Just in the comment about American values I'm one of those who believes that the values that are being promoted through these institutions aren't American values I mean they are much more universal and the values of creating opportunity and giving Leaders in their country the ability to respond to basic human needs to creating economic opportunity so that Families that parents have this sense that tomorrow might actually be better for their children than what it is today I'm an American, but I don't think that's just an American value I think it's really a universal value and I and I think we We cheapen the institutions if we suggest that these are narrowly rigidly the province of Americans because I don't think that's the case On all of those issues this one Give my proxy to to mark as I grew with every word of what he just what he just said on the on the on the on the corruption issue I think there's a there is a danger in that I mean we have made enormous progress on on corruption it has not gone away though as a Commensurately as a concern on the hill and in the perceptions of most people as to what Happens with development dollars that that gets sent overseas and the most important thing we could do if you're talking about results But also just just try to get as as good as we possibly can get on on Transparency and even a friend from from diffid might do actually appreciate this this example because it was a different different program This is it that in the cabaret Cabrera slum in in Nairobi diffid had a textbook program when Kenya moved towards universal universal primary education, of course, they had just you know great reform right huge need for things like desks and books and you know school supplies with the huge influx of The number of students that were coming into the system. So it's a diffid had a wonderful program to provide To provide textbooks and so I visited the school in In Nairobi and and outside the school what they had was a big board that identified for the parents in that neighborhood to see so that everyone could see Exactly where every single shilling of that program was spent What was bought how many books how many pencils right every single And then they had a bottom line at the bottom was like ten shillings left And I never found out what they did with that last ten shillings right and we actually we took a we took a photograph of that board and when we went up to the hill to It's a lobby to talk to the Appropriations Committees and Lobby Congress got that picture blown up on a big You know three foot by five foot blow-up of that of that board to say this is what we're talking about on Effectiveness and results and tracking every last shilling so you can see we are deadly serious about this about you know how we can be the best stewards of your money and You know to convince them that you know, we're serious about it The multilateral development banks are getting serious about it Other development institutions are getting serious about it and as long as we keep doing that You know what we you know to encourage them to be to continue to be generous with contributions to to the institution So I think you know like simple things like that We need to do a lot more of to keep showing how this is being done today as opposed to how it was had been done in the past Dan any comments on the questions? Yeah, hi, I'm I'm Deanna Greg with BNA and since this Subject is the general capital increase. I was wondering if you could address the status of it legislative wise and where are the Where is the most likely to run into trouble? I believe it's come out of the center appropriations Hi, I'm Shirley Wang. I'm interning at Treasury and I was wondering about joint initiatives between Different multilaterals and IFIs and so when that comes to mind is the Arab financing facility for infrastructure where? It's a joint venture between the World Bank the IMF IFC and different IFIs and they're trying to raise billions of dollars for infrastructure projects through both public and private sector financing Windows and what I was curious about is Where well a part of this a part of this project is that they're to have like a technical assistance facility for Guidance on private public partnerships, which is like the main mechanism through which these projects would come to fruition And so I was wondering where the US would best be able to provide assistance to develop these kind of joint ventures outside of just a general capital increase and Where the where that kind of funding would come from? Thank you my friend from the European I'm with the European Union and I do the liaison with the World Bank You talked a lot about the US leadership abroad and how through the process of foreign aid this could be re-claimed but I Haven't heard the panelist or the previous speakers to talk at all about partnerships I follow the coordination of the Europeans at the World Bank representing their decommission and when they try to reach Some kind of common agreement before they go to the board I Have noticed that there is not Always the debate which says in addition to finding the common denominator amongst us Let's go out there and talk to those other chairs Who share with us the same? principles overall which is a free market and democracy and anti-corruption to kind of Go to this board where the seasons are taken by concessions with a strong argument Promoting let's say by what we call the Western world In particular at the time that as you mentioned new players like China are coming in more willing to compromise all these standards safeguards and clauses that have been acquired so far in the process of the economic development and I Think it's a two-way street. It's not I don't have let's say I I Have the impression that there is no I know a lot of work a lot of work is happening Prior to a proposal going to the board because there they have There is not a lot of time to be given but I Have the impression that at the level of the preparation The concept of partnership and let's work together with everybody else at the board who could help us to enhance a Strong view Thank you Mark, but could I put you on the spot and respond to the issue of the state of play? Sure in terms of of the legislation I Think we saw this morning in Chairman Miller really the state of play and this is where the legislation is What's been key appropriators right now are making very tough choices in a very difficult political environment very difficult fiscal environment And they turn to the authorizers of which chairman Miller and congressman McCarthy lead the subcommittee international monetary policy of financial services in asked to Flesh out through testimony The importance of these institutions Why it's in the taxpayers interests for the replenishment to go forward and for these institutions to keep going forward and They've had several hearings including one just a couple of days ago and that record Is going to reinforce what happens going forward? I understand the vice chair of the committee of the subcommittee will be formally introducing the legislation in coming days They will presumably schedule a vote in the subcommittee and the results of that subcommittee vote We'll send a strong signal to appropriators on the level of support that is that is out there so This is obviously from the perspective of the IDB rather than from the perspective of the World Bank But I think you know in this resource constrained world in which we find ourselves the concept of partnerships for the MTV's has changed quite Dramatically and and I see actually a great deal of work on that score We established an office of outreach and partnerships with exactly this in mind Which is there is a huge group of and and mark you alluded to this of donors There's a donor community out there with countries and others Let's call them foundations and others who are interested in the self-same topics and it's our responsibility To coordinate well and properly and one of the silver linings in Haiti I think is that the demands to actually coordinate rather than walk into a room to help people what you're doing what I'm doing Then walk back out of the room. That doesn't cut it anymore So from our perspective, you know, I could let me name just a couple of things. I said which is the Spanish Development Fund Huge contributors together with us on various projects Agence France the development huge contributor to projects together with us the Nordic Investment Fund Each of these guys has their own focus And so their funds are generally directed toward a specific arena and now that work is done before we go to our board And then on the other side the other actors, you know, we're doing lots of things with Coca-Cola Pepsi Cola the Gates Foundation Carlos Slim I mean all kinds of actors who 15 or 10 or even five years ago You wouldn't have been speaking about who we with whom we are engaged and and toward whom we have a very substantial Effort to make sure that we're involved with them and they're involved with us Why don't I take the the second question about how where's the US play? I think in it I I've been writing about the fact that the 10-year bull market on ODA is coming to an end And we're looking at a 10 or 20 percent cut in official development assistance So I think the United States is going to be looking for ways to leverage other monies and how do I think? We have unique convening power And I think we've also got the ability to make available soft monies that oftentimes is These institutions oftentimes that the harder money to get a hold of is the soft grant monies And so I think where we can play a role is on using soft grant monies In a variety of ways to share risk is oftentimes where we can we can play unique role as well as funding specific Targeted technical assistance in addition to convening these various actors leveraging our executive directors and Our convening power around that and there have been some examples in the past of the United States doing that I'm cognizant of the time. I know we haven't been able to answer everybody's questions But I I'm very grateful to everybody sticking around and for for the panel discussion So I ask you to join me in thanking the panel