99–006

107TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 107–291

UNITED STATES FUNDING OF MULTILATERAL

DEVELOPMENT INSTITUTIONS

NOVEMBER 15, 2001.—Committed to the Committee of the Whole House on the

State of the Union and ordered to be printed

Mr. OXLEY, from the Committee on Financial Services,

submitted the following

R E P O R T

together with

DISSENTING VIEWS

[To accompany H.R. 2604]

[Including cost estimate of the Congressional Budget Office]

The Committee on Financial Services, to whom was referred the

bill (H.R. 2604) to authorize the United States to participate in and

contribute to the seventh replenishment of the resources of the

Asian Development Fund and the fifth replenishment of the resources of the International Fund for Agricultural Development,

and to set forth additional policies of the United States towards the

African Development Bank, the African Development Fund, the

Asian Development Bank, the Inter-American Development Bank,

and the European Bank for Reconstruction and Development, having considered the same, report favorably thereon with an amendment and recommend that the bill as amended do pass.

CONTENTS

Page

Purpose and Summary ............................................................................................ 6

Background and Need for Legislation .................................................................... 6

Hearings ................................................................................................................... 7

Committee Consideration ........................................................................................ 8

Committee Votes ...................................................................................................... 8

Committee Oversight Findings ............................................................................... 9

Performance Goals and Objectives ......................................................................... 9

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 10

Committee Cost Estimate ....................................................................................... 10

Congressional Budget Office Estimate ................................................................... 10

2

Federal Mandates Statement ................................................................................. 12

Advisory Committee Statement .............................................................................. 12

Constitutional Authority Statement ...................................................................... 12

Applicability to Legislative Branch ........................................................................ 12

Section-by-Section Analysis of the Legislation ...................................................... 13

Changes in Existing Law Made by the Bill, as Reported ..................................... 16

Dissenting Views ..................................................................................................... 21

The amendment is as follows:

Strike all after the enacting clause and insert the following:

SECTION 1. UNITED STATES CONTRIBUTION TO THE SEVENTH REPLENISHMENT OF THE RESOURCES OF THE ASIAN DEVELOPMENT FUND.

The Asian Development Bank Act (22 U.S.C. 285–285aa) is amended by adding

at the end the following:

‘‘SEC. 31. SEVENTH REPLENISHMENT.

‘‘(a) CONTRIBUTION AUTHORITY.— ‘‘(1) IN GENERAL.—The United States Governor of the Bank may contribute on behalf of the United States $412,000,000 to the Asian Development Fund,

a special fund of the Bank.

‘‘(2) SUBJECT TO APPROPRIATIONS.—The authority provided by paragraph (1)

shall be effective only to such extent or in such amounts as are provided in advance in appropriations Acts.

‘‘(b) LIMITATIONS ON AUTHORIZATION OF APPROPRIATIONS.—For contribution authorized by subsection (a), there are authorized to be appropriated to the Secretary

of the Treasury not more than $412,000,000, without fiscal year limitation.’’.

SEC. 2. UNITED STATES CONTRIBUTION TO THE FIFTH REPLENISHMENT OF THE RESOURCES

OF THE INTERNATIONAL FUND FOR AGRICULTURAL DEVELOPMENT.

(a) CONTRIBUTION AUTHORITY.—

(1) IN GENERAL.—The United States Governor of the International Fund for

Agricultural Development may contribute on behalf of the United States

$30,000,000 to the International Fund for Agricultural Development.

(2) SUBJECT TO APPROPRIATIONS.—The authority provided by paragraph (1)

shall be effective only to such extent or in such amounts as are provided in advance in appropriations Acts.

(b) LIMITATIONS ON AUTHORIZATION OF APPROPRIATIONS.—For contribution authorized by subsection (a), there are authorized to be appropriated to the Secretary of

the Treasury not more than $30,000,000, without fiscal year limitation.

(c) REPORT ON PARTICIPATION OF THE IFAD IN THE ENHANCED HIPC INITIATIVE.—

Within 3 months after the date of the enactment of this Act, the Secretary of the

Treasury shall submit to the Committee on Financial Services of the House of Representatives and the Committee on Foreign Relations of the Senate a report on the

participation of the International Fund for Agricultural Development in the Enhanced HIPC Initiative. The report shall include a statement of the cost to the

International Fund for Agricultural Development of participating in the Enhanced

HIPC Initiative, the effects of such participation (if not reimbursed) on current and

future programs of the International Fund for Agricultural Development, the feasibility of allowing the World Bank HIPC Trust Fund to reimburse the International

Fund for Agricultural Development for the costs of such participation, and the

amount of additional appropriations from the United States to the World Bank

HIPC Trust Fund that would be necessary to allow such participation.

SEC. 3. HIV/AIDS STRATEGIC PLAN.

Title XVI of the International Financial Institutions Act (22 U.S.C. 262p–262p-7)

is amended by adding at the end the following:

‘‘SEC. 1625. HIV/AIDS STRATEGIC PLAN.

‘‘The Secretary of the Treasury shall instruct the United States Executive Directors at the African Development Bank, the African Development Fund, the Asian

Development Bank, the Asian Development Fund, a special fund of the Asian Development Bank, and the Inter-American Development Bank, and the United States

Governor of the International Fund for Agricultural Development to support continued efforts by such institutions as appropriate in regard to HIV/AIDS, tuberculosis,

malaria, and other infectious diseases, including—

‘‘(1) development and implementation of a strategic plan to fight against the

spread of HIV/AIDS, tuberculosis, malaria, and other infectious diseases;

‘‘(2) integration of HIV/AIDS, tuberculosis, malaria, and other infectious diseases activities in ongoing projects as appropriate, development of new dedicated HIV/AIDS, tuberculosis, malaria, and other infectious diseases, projects as

3

appropriate that take into consideration the institution’s mandate and core

strengths, and the building of AIDS-mitigation measures into other projects;

‘‘(3) design and implementation of HIV/AIDS, tuberculosis, malaria, and other

infectious diseases impact assessment criteria into environmental and social assessment processes that the institution considers when designing and evaluating new project proposals;

‘‘(4) work on disseminating information on best practices and project design

for HIV/AIDS, tuberculosis, malaria, and other infectious diseases projects; and

‘‘(5) support training for professional staff on HIV/AIDS, tuberculosis, malaria, and other infectious disease prevention issues to ensure that these healthrelated concerns are integrated into all aspects of the work of the institution.’’.

SEC. 4. USER FEES.

Title XVI of the International Financial Institutions Act (22 U.S.C. 262p–262p-7)

is further amended by adding at the end the following:

‘‘SEC. 1626. USER FEES.

‘‘The Secretary of the Treasury shall instruct the United States Executive Director

at the African Development Bank, the African Development Fund, the Asian Development Bank, the Asian Development Fund, a special fund of the Asian Development Bank, and the Inter-American Development Bank, and the United States Governor of the International Fund for Agricultural Development to oppose any loan,

grant, document, or strategy that is subject to endorsement or approval by the board

of directors of any such institution, which includes user fees or service charges in

impoverished countries directly or under the guise of community financing, costsharing, or cost recovery mechanisms, for primary education or primary health care,

including prevention and treatment efforts for HIV/AIDS, malaria, tuberculosis, and

infant, child, and maternal well-being.’’.

SEC. 5. TRANSPARENCY.

(a) UNITED STATES POLICY IN REGIONAL MULITLATERAL DEVELOPMENT INSTITUTIONS.—Title XV of the International Financial Institutions Act (22 U.S.C. 262o–

262o-2) is further amended by adding at the end the following:

‘‘SEC. 1504. TRANSPARENCY.

‘‘(a) IN GENERAL.—The Secretary of the Treasury shall instruct the United States

Executive Director at the African Development Bank, the African Development

Fund, the Asian Development Bank, the Asian Development Fund, a special fund

of the Asian Development Bank, the Inter-American Development Bank, and the

European Bank for Reconstruction and Development, and the United States Governor of the International Fund for Agricultural Development to—

‘‘(1) continue to make efforts to promote greater transparency regarding the

activities of such institutions, including project design, project monitoring and

evaluation, project implementation, resource allocation, and decisionmaking;

‘‘(2) support continued efforts to allow informed participation and input by affected communities, including translation of information on proposed projects,

providing information through information technology applications, oral briefings, and outreach to and dialogue with community organizations and institutions in affected areas; and

‘‘(3) work toward ensuring that—

‘‘(A) meetings of the Boards of Directors (or, in the case of the International Fund for Agricultural Development, the Board of Governors) of

their respective institutions are open to the public and the media, except

for discussion of sensitive matters such as individual personnel matters;

‘‘(B) transcripts of such meetings are available to the public no later than

60 calendar days after the meetings, except for discussion of sensitive matters such as individual personnel matters; and

‘‘(C) all key documents that are presented for endorsement or approval

by the Board of Directors (or, in the case of the International Fund for Agricultural Development, the Board of Governors) of their respective institutions will be made available to the public at least 15 days before consideration by the Board.

‘‘(b) STATEMENT OF GOALS.—The Secretary of the Treasury shall instruct the

United States Executive Director at the African Development Bank, the African Development Fund, the Asian Development Bank, the Asian Development Fund, a special fund of the Asian Development Bank, the Inter-American Development Bank,

and the European Bank for Reconstruction and Development, and the United States

Governor of the International Fund for Agricultural Development to inform their respective institutions of the goals enumerated in subsection (a), in a manner that the

Secretary of the Treasury deems appropriate.’’.

4

(b) CONGRESSIONAL TESTIMONY REQUIRED.—The United States Executive Directors at the African Development Bank, the African Development Fund, the Asian

Development Bank, the Asian Development Fund, a special fund of the Asian Development Bank, the Inter-American Development Bank, and the European Bank for

Reconstruction and Development, and the United States Governor of the International Fund for Agricultural Development shall, at the request of the Committee

on Financial Services of the House of Representatives or of the Committee on Foreign Relations of the Senate appear before the committee making the request, on

an annual basis, and testify on the efforts undertaken pursuant to section 1504 of

the International Financial Institutions Act and on other matters relating to any

such institution.

(c) GRANTS.— (1) IN GENERAL.—The Secretary of the Treasury may make grants in such

amounts as the Secretary deems appropriate to any institution specified in

paragraph (2) which— (A) has implemented the measures described in section 1504 of the International Financial Institutions Act; and

(B) provides assurances to the Secretary that the institution will use the

grant solely for transparency activities.

(2) INSTITUTIONS.—The institutions specified in this paragraph are the African Development Bank, the African Development Fund, the Asian Development

Bank, the Asian Development Fund, a special fund of the Asian Development

Bank, the Inter-American Development Bank, the European Bank for Reconstruction and Development, and the International Fund for Agricultural Development.

(3) LIMITATIONS ON AUTHORIZATION OF APPROPRIATIONS.—For grants under

this subsection, there are authorized to be appropriated to the Secretary of the

Treasury not more than $10,000,000 for fiscal year 2002.

(d) CONGRESSIONAL PURSUIT OF TRANSPARENCY GOALS IN INTERPARLIAMENTARY

DIALOGUES AND MEETINGS.—The Congress shall pursue the transparency goals described in section 1504 of the International Financial Institutions Act, in all official

interparliamentary dialogues and meetings as appropriate.

(e) PURSUIT OF TRANSPARENCY GOALS BY THE SECRETARY OF THE TREASURY.—The

Secretary of the Treasury shall submit annually to the Committee on Financial

Services of the House of Representatives and the Committee on Foreign Relations

of the Senate a written report detailing the steps that have been taken by the

United States Executive Directors at the institutions, by the finance ministers, and

by the institutions, referred to in paragraph (1) to implement the measures described in such section 1504.

SEC. 6. GENERAL OBJECTIVES.

Title XVI of the International Financial Institutions Act (22 U.S.C. 262p–262p-7)

is further amended by adding at the end the following:

‘‘SEC. 1627. GENERAL OBJECTIVES.

‘‘The Secretary of the Treasury shall instruct the United States Executive Director

at the African Development Bank, the African Development Fund, the Asian Development Bank, the Asian Development Fund, a special fund of the Asian Development Bank, and the Inter-American Development Bank, and the United States Governor of the International Fund for Agricultural Development to focus on poverty

alleviation, economic growth, increased productivity, sustainable development, environmental protection, labor rights, and an increased focus on education.’’.

SEC. 7. REQUIREMENTS FOR FINANCIAL SUPPORT FOR DAMS.

Title XVI of the International Financial Institutions Act (22 U.S.C. 262p–262p-7)

is further amended by adding at the end the following:

‘‘SEC. 1628. REQUIREMENTS FOR FINANCIAL SUPPORT FOR DAMS.

‘‘The Secretary of the Treasury shall instruct the United States Executive Directors at the African Development Bank, the African Development Fund, the Asian

Development Bank, the Asian Development Fund, a special fund of the Asian Development Bank, and the Inter-American Development Bank, and the United States

Governor of the International Fund for Agricultural Development to oppose any loan

which provides support for any project that includes a dam unless the project conforms to all of the following terms:

‘‘(1) Comprehensive and participatory assessments of the energy, water, and

flood management needs to be met and different options for meeting these

needs are developed before detailed studies are done on any specific project.

‘‘(2) Priority is given to demand side management measures and optimizing

the performance of existing infrastructure before building any new projects.

‘‘(3) No dam is built without full consultation with affected people.

5

‘‘(4) Periodic participatory reviews are done for existing dams to assess issues

including dam safety, and the possibility of dam decommissioning.

‘‘(5) Mechanisms are developed to provide social compensation for those who

are suffering the impacts of dams, and to restore damaged ecosystems.’’.

SEC. 8. STUDY BY THE GENERAL ACCOUNTING OFFICE.

Within 1 year after the date of the enactment of this Act, the Comptroller General

of the United States shall prepare and submit to the Committee on Financial Services of the House of Representatives and the Committee on Foreign Relations of the

Senate a report on the benefits and costs of the African Development Fund, the

Asian Development Fund, a special fund of the Asian Development Bank, the International Fund for Agricultural Development, and the Fund for Special Operations

of the Inter-American Development Bank, providing grants instead of loans.

SEC. 9. COMMENDATION.

(a) FINDINGS.—The Congress finds that—

(1) the African Development Bank and Fund elected Omar Kabbaj, an official

of the Ministry of Finance of Morocco, as the new President in 1995;

(2) President Kabbaj implemented successful fiscal and managerial reforms,

including refocusing the activity of the African Development Fund on poverty

alleviation;

(3) under the leadership of President Kabbaj, the African Development Bank

began to issue yearly portfolio status reports reflecting improved project monitoring and supervision;

(4) President Kabbaj successfully emphasized the importance of project postevaluation in helping the Bank avoid problems identified with earlier funded

projects;

(5) President Kabbaj has taken a program approach where all stakeholders,

including the beneficiaries of the borrower countries, are involved in program

design and implementation;

(6) President Kabbaj was unanimously appointed to a second 5-year term in

May 2000; and

(7) under the leadership of President Kabbaj, on June 6, 2001, Standard &

Poor’s revised the outlook on its AA+ long term issuer ratings of the African

Development Bank to stable from negative.

(b) COMMENDATION.—The Congress, on behalf of the people of the United States,

commends President Omar Kabbaj for his successful reform efforts as President of

the African Development Bank and Fund, and encourages his continued efforts at

reform.

SEC. 10. ACTION BY THE PRESIDENT.

Title XVI of the International Financial Institutions Act (22 U.S.C. 262p–262p-7)

is further amended by adding at the end the following:

‘‘SEC. 1629. ACTION BY THE PRESIDENT.

‘‘If the President determines that a foreign country has taken or has committed

to take actions that either contribute or do not contribute to efforts of the United

States to respond to, deter, or prevent acts of international terrorism, the Secretary

of the Treasury may, consistent with other applicable law, instruct the United

States Executive Director at, or the United States Governor of, the regional multilateral development bank to take the determination into account in considering

whether to approve an application of the country for assistance from the institution.’’.

SEC. 11. SENSE OF THE CONGRESS REGARDING PRIVATIZATION PROJECTS.

Title XVI of the International Financial Institutions Act (22 U.S.C. 262p–262p-7)

is further amended by adding at the end the following:

‘‘SEC. 1630. SENSE OF THE CONGRESS REGARDING PRIVATIZATION PROJECTS.

‘‘The Secretary of the Treasury should instruct the United States Executive Director at the Asian Development Bank, the African Development Bank, the African Development Fund, the International Fund for Agricultural Development, the InterAmerican Development Bank, and the European Bank for Reconstruction and Development, and the United States Governor of the International Fund for Agricultural Development to use the voice and vote of the United States to oppose the provision by the respective institution of assistance for a project that involves privatization of a government-held industry or sector if—

‘‘(1) the privatization transaction is not implemented in a transparent manner;

‘‘(2) the privatization transaction is not implemented in a manner that adequately protects the interests of workers, small investors, and vulnerable groups

6

in society to the extent that they are affected by the privatization transaction;

or‘‘(3) appropriate regulatory regimes have not been established to ensure the

proper function of competitive markets in the industry or sector.’’.

SEC. 12. OPPOSITION OF UNITED STATES TO REDUCTION OF MINIMUM WAGE BELOW INTERNATIONALLY RECOGNIZED LEVEL OF POVERTY.

Title XVI of the International Financial Institutions Act (22 U.S.C. 262p–262p-7)

is further amended by adding at the end the following:

‘‘SEC. 1631. OPPOSITION OF UNITED STATES TO REDUCTION OF MINIMUM WAGE BELOW

INTERNATIONALLY RECOGNIZED LEVEL OF POVERTY.

‘‘The Secretary of the Treasury shall instruct the United States Executive Director

at the African Development Bank, the African Development Fund, the Asian Development Bank, the Asian Development Fund, a special fund of the Asian Development Bank, the Inter-American Development Bank, and the European Bank for Reconstruction and Development, and the United States Governor of the International

Fund for Agricultural Development to oppose any loan, grant, document, or strategy

that is subject to endorsement or approval by the board of directors of any such institution, which includes any provision that would recommend or encourage the reduction of a country’s minimum wage to a level of less than $2.00 per day.’’.

SEC. 13. SUPPORT FOR ASIAN DEVELOPMENT FUND ASSISTANCE FOR PROJECTS THAT ARE

DIRECTED AT ADDRESSING ARSENIC CONTAMINATION IN DRINKING WATER IN

SOUTH ASIA.

Title XVI of the International Financial Institutions Act (22 U.S.C. 262p–262p-7)

is further amended by adding at the end the following:

‘‘SEC. 1632. SUPPORT FOR PROJECTS THAT ARE DIRECTED AT ADDRESSING ARSENIC CONTAMINATION IN DRINKING WATER IN SOUTH ASIA.

‘‘The Secretary of the Treasury shall instruct the United States Executive Director

at the Asian Development Fund, a special fund of the Asian Development Bank, to

use the voice and vote of the United States to support projects that are directed at

addressing arsenic contamination in drinking water in South Asia.’’.

PURPOSE AND SUMMARY

H.R. 2604 authorizes U.S. contributions of $412 million to the

Asian Development Fund and the $30 million to the International

Fund for Agricultural Development for the replenishment of these

two institutions. Additionally, this measure directs the U.S. Executive Directors of the multilateral development banks to use their

voice and votes to address issues relating to transparency, user

fees, HIV/AIDS, projects that include dams, international terrorism, privatization of government-held industries, opposition to

reducing minimum wages below internationally recognized poverty

levels, and arsenic in drinking water in South Asia.

BACKGROUND AND NEED FOR LEGISLATION

The Asian Development Fund (AsDF) is the concessional lending

arm of the Asian Development Bank, the multilateral development

bank for the Asia-Pacific region. The AsDF provides loans on highly concessional terms to those developing member countries

(DMCs) with a low per capita gross national product (GNP), and

limited debt repayment capacity. Therefore, funds are lent at

concessional interest rates with repayment terms of 24 to 38 years.

Established in 1973, AsDF resources have been replenished six

times. Authorization for the seventh replenishment will last until

FY 2005.

The International Fund for Agricultural Development (IFAD)

was established as an international financial institution in 1977 as

a result of the 1974 World Food Conference. Unlike other regional

multilateral development banks (MDBs), which have a broad range

of objectives, the Fund has a specific functional mandate: to combat

7

hunger and rural poverty in developing countries. There have been

four replenishments of IFAD’s resources since its founding. H.R.

2604 addresses, among other things, the U.S. commitment to the

fifth replenishment of IFAD.

In addition to authorizing the replenishments to the AsDF and

IFAD, the bill directs the Secretary of the Treasury to use the influence of the United States to make improvements in the operation of IFAD and the regional multilateral development banks.

These banks include: the Asian Development Bank/Fund; the African Development Bank/Fund; the Inter-American Development

Bank; and the European Bank for Reconstruction and Development. First, the legislation directs the Secretary of the Treasury to

instruct the U.S. Executive Directors (USEDs) to use their voice

and vote in the various multilateral development banks to support

efforts to fight the spread of HIV/AIDS. Second, the USEDs are directed to oppose user fees for primary education and primary

healthcare. Third, the USEDs are encouraged to promote greater

transparency regarding the activities of the multilateral development banks. Finally, the USEDs are directed to focus on poverty

alleviation, economic growth, increased productivity, sustainable

development, environmental protection, labor rights and an increased emphasis on education.

The Committee also sought to explore the initiative proposed by

the Bush Administration to provide grants to developing countries

instead of loans through the multilateral development banks. This

measure mandates a GAO study on this grant proposal to be delivered to the Committee within one year of enactment.

HEARINGS

The Subcommittee on International Monetary Policy and Trade

and the Committee on Financial Services held four hearings relating to the regional MDBs during this legislative session. The first

hearing was held on April 25, 2001, and was entitled, ‘‘U.S. Policy

Towards the African Development Bank and the African Development Fund.’’ At this hearing, the Subcommittee heard from Dr.

Donald Sherk, the former U.S. Executive Director to the African

Development Bank; Dr. Kwesi Botchwey, Director of Africa Research Programs at the Harvard Center for International Development; and Ms. Njoki Njehu, Director of 50 Years is Enough.

The second Subcommittee hearing, entitled ‘‘World Bank and

IMF Activities in Africa: Poverty Alleviation, Debt Relief and HIV/

AIDS,’’ was held on May 15, 2001. Witnesses at this hearing included: Dr. Susan Westin of the GAO; Dr. Nancy Birdsall, Senior

Associate and Director, Economic Reform Project, the Carnegie Endowment for International Peace; Dr. James Sherry from UNAIDS;

Dr. Dyna Arhin-Tenkorang, Senior Economist at the World Health

Organization’s Commission on Macroeconomics and Health; and

Dr. Leon Spencer, Executive Director of the Washington Office on

Africa.

On May 22, 2001, the Honorable Paul O’Neill, Secretary of the

Treasury, testified before the full Committee on the state of the

international financial system, IMF reform, and compliance with

IMF agreements.

A fourth hearing entitled ‘‘FY 2002 Authorization Requests for

the International Financial Institutions and Activities of the AfriVerDate 11-MAY-2000 09:29 Nov 16, 2001 Jkt 099006 PO 00000 Frm 00007 Fmt 6659 Sfmt 6602 E:\HR\OC\HR291.XXX pfrm07 PsN: HR291
8

can Development Bank, the World Bank and the IMF in Africa,’’

was held on June 12, 2001, and featured Mr. William E. Schuerch,

Deputy Assistant Treasury Secretary for International Development, Debt and Environmental Policy.

COMMITTEE CONSIDERATION

On September 21, 2001, the Subcommittee on International Monetary Policy and Trade met in open session and approved H.R.

2604 for full Committee consideration, as amended, by a voice vote.

On October 31, 2001, the Committee met in open session and ordered H.R. 2604 reported to the House with a favorable recommendation, with an amendment, by a voice vote.

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion

to report legislation and amendments thereto. A motion by Mr.

Oxley to report the bill to the House with a favorable recommendation was agreed to by a voice vote.

Record votes were taken on the following amendments. The

names of Members voting for and against follow:

An amendment by Mr. Crowley, no. 2, addressing support for projects that are directed at addressing arsenic

contamination in drinking water in Bangladesh, was not

agreed to by a record vote of 26 yeas and 26 nays (Record

vote no. 11).

YEAS NAYS

Mr. LaFalce Mr. Oxley

Mr. Frank Mr. Leach

Mr. Kanjorski Mr. Bereuter

Ms. Waters Mr. Baker

Mr. Sanders Mr. Castle

Mrs. Maloney of New York Mr. Royce

Mr. Gutierrez Mr. Lucas of Oklahoma

Mr. Watt of North Carolina Mr. Paul

Mr. Ackerman Mr. Gillmor

Mr. Bentsen Mr. Weldon of Florida

Mr. Maloney of Connecticut Mr. Ryun of Kansas

Ms. Hooley of Oregon Mr. LaTourette

Mr. Sandlin Mr. Manzullo

Mr. Meeks of New York Mr. Ose

Ms. Lee Mrs. Biggert

Mr. Inslee Mr. Green of Wisconsin

Ms. Schakowsky Mr. Toomey

Mr. Moore Mr. Shays

Mr. Gonzalez Mr. Fossella

Mr. Capuano Mr. Gary G. Miller of

Mr. Ford California

Mr. Lucas of Kentucky Mr. Cantor

Mr. Crowley Mr. Grucci

Mr. Clay Ms. Hart

Mr. Israel Mrs. Capito

9

Mr. Ross Mr. Rogers of Michigan

Mr. Tiberi

An amendment by Ms. Schakowsky, no. 3, directing

United States opposition to assistance for projects that

would increase the cost of clean drinking water for low-income residential consumers, was not agreed to by a record

vote of 16 yeas and 19 nays (Record vote no. 12).

YEAS NAYS

Mr. LaFalce Mr. Oxley

Mr. Frank Mr. Bereuter

Mr. Kanjorski Mr. Baker

Ms. Waters Mr. Royce

Mr. Sanders Mr. Lucas of Oklahoma

Mrs. Maloney of New York Mr. Barr of Georgia

Mr. Gutierrez Mr. Paul

Mr. Watt of North Carolina Mr. Ryun of Kansas

Mr. Maloney of Connecticut Mr. Manzullo

Ms. Hooley of Oregon Mr. Ose

Ms. Lee Mrs. Biggert

Mr. Inslee Mr. Green of Wisconsin

Ms. Schakowsky Mr. Toomey

Mr. Moore Mr. Shays

Mr. Lucas of Kentucky Mr. Shadegg

Mr. Crowley Mr. Fossella

Mr. Grucci

Ms. Hart

Mr. Rogers of Michigan

The Committee also considered the following amendments:

An amendment by Mr. Oxley, no. 1, making various

changes to the bill, was agreed to by a voice vote.

An amendment by Mr. Gutierrez, no. 4, directing United

States opposition to suggestions that the minimum wage

be reduced below the internationally recognized level of

poverty, was agreed to by a voice vote.

An amendment by Mr. Crowley, no. 5, addressing support for projects that are directed at addressing arsenic

contamination in drinking water in South Asia, was

agreed to by a voice vote.

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House

of Representatives, the Committee held a hearing and made findings that are reflected in this report.

PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the House

of Representatives, the Committee establishes the following performance related goals and objectives for this legislation:

This legislation seeks to promote development and poverty alleviation by authorizing the U.S. contributions to the Asian Development Fund and the International Fund for Agriculture and Development. This measure also seeks to reduce HIV/AIDS, promote

10

transparency and oppose user fees within the multilateral development banks.

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the

House of Representatives, the Committee finds that this legislation

would result in no new budget authority, entitlement authority, or

tax expenditures or revenues.

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by

the Director of the Congressional Budget Office pursuant to section

402 of the Congressional Budget Act of 1974.

CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House

of Representatives, the following is the cost estimate provided by

the Congressional Budget Office pursuant to section 402 of the

Congressional Budget Act of 1974:

U.S. CONGRESS,

CONGRESSIONAL BUDGET OFFICE,

Washington, DC, November 9, 2001.

Hon. MICHAEL G. OXLEY, Chairman, Committee on Financial Services,

House of Representatives, Washington, DC.

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 2604, a bill to authorize

the United States to participate in and contribute to the seventh

replenishment of the resources of the Asian Development Fund and

the fifth replenishment of the resources of the International Fund

for Agriculture Development, and to set forth additional policies of

the United States towards the African Development Bank, the African Development Fund, and Asian Development Bank, the InterAmerican Development Bank, and the European Development

Bank.

If you wish further details on this estimate, we will be pleased

to provide them. The CBO staff contact is Joseph C. Whitehill.

Sincerely,

BARRY B. ANDERSON

(For Dan L. Crippen, Director).

Enclosure.

11

H.R. 2604—A bill to authority the United States to participate in

and contribute to the seventh replenishment of the resources of

the Asian Development Fund and the fifth replenishment of the

resources of the International Fund for Agricultural Development, and to set forth additional policies of the United States

towards the African Development Bank, the African Development Fund, and Asian Development Bank, the International

American Development Bank, and the European Development

Bank

Summary: H.R. 2604 would authorize the appropriations of funds

for the United States’ contribution to the Asian Development Fund

(ADF) and the International Fund for Agricultural Development

(IFAD). The bill also would authorize the appropriation of $10 million in 2002 for grants to the multilateral development banks for

the cost of increasing the transparency of their operations. Finally,

the bill would direct the Secretary of the Treasury to instruct the

U.S. Executive Directors of the multilateral development banks to

work toward certain policy objectives.

Assuming the appropriation of the authorized amounts, CBO estimates that implementing H.R. 2604 would cost $25 million in

2002 and $276 million over the 2002–2006 period. Because H.R.

2604 would not affect direct spending or receipts, pay-as-you-go

procedures would not apply.

H.R. 2604 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA)

and would not affect the budgets of state, local, or tribal governments.

Estimated cost to the Federal Government: The estimated budgetary impact of H.R. 2604 is shown in the following table. The estimate assumes that the authorized amounts will be appropriated

over the next four years and that outlays will follow historical

spending patterns. The costs of this legislation fall within budget

function 150 (international affairs).

By fiscal year, in millions of dollars—

2001 2002 2003 2004 2005 2006

SPENDING SUBJECT TO APPROPRIATION

Spending Under Current Law:

Budget Authority 1 ............................................................... 77 0 0 0 0 0

Estimated Outlays ............................................................... 167 142 117 88 58 12

Proposed Changes:

Estimated Authorization Level ............................................. 0 128 118 103 103 0

Estimated Outlays ............................................................... 0 25 46 60 70 75

Spending Under H.R. 2604:

Estimated Authorization Level 1 .......................................... 77 128 118 103 103 0

Estimated Outlays ............................................................... 167 167 163 148 128 87

1 The 2001 level is the amount appropriated for that year for ADF and IFAD.

Basis of estimate: Sections 1 and 2 of H.R. 2604 would authorize

the appropriation of $412 million for the seventh replenishment of

the ADF and $30 million for the fifth replenishment of the IFAD,

respectively. International agreements to replenish the resources of

multilateral development banks (MDBs) typically cover a number

of years. For the purpose of this estimate, CBO assumes the appropriation of the authorized amounts would follow the schedule of

contributions agreed upon by the United States and other donors.

12

According to Administration documents, the replenishment

agreement for the ADF would cover four years and the replenishment agreement for IFAD would cover two years. CBO assumes the

authorized amount for the ADF would be provided in four installments of $103 million a year over the 2002–2005 period. Similarly,

CBO assumes the $30 million authorization for the IFAD would be

provided in two installments of $15 million a year in 2002 and

2003. Assuming the appropriation of the authorized amounts, CBO

estimates that implementing these provisions would cost $21 million in 2002 and $266 million over the 2002–2006 period.

Section 5 would authorize the appropriation of $10 million in

2002 for the Secretary of the Treasury to make grants to the various MDBs to improve the transparency of their operations. CBO

estimates spending of the authorized amount would follow the pattern of the Treasury Department’s technical assistance program

and cost $10 million over the 2002–2006 period.

The remaining sections of the bill would direct the Secretary of

the Treasury to instruct the U.S. Executive Directors of the MDBs

to work toward certain policy objectives. CBO estimates that implementing these provisions would not affect spending.

Pay-as-you-go considerations: None.

Intergovernmental and private-sector impact: H.R. 2604 contains

no intergovernmental or private-sector mandates as defined in

UMRA and would not affect the budgets of state, local, or tribal

governments.

Estimate prepared by: Federal Costs: Joseph C. Whitehill. Impact on State, Local, and Tribal Governments: Elyse Goldman. Impact on the Private Sector: Paige Piper/Bach.

Estimate approved by: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis.

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office

pursuant to section 423 of the Unfunded Mandates Reform Act.

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the

Federal Advisory Committee Act were created by this legislation.

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House

of Representatives, the Committee finds that the Constitutional

Authority of Congress to enact this legislation is provided by Article 1, section 8, clause 1 (relating to the general welfare of the

United States) and clause 3 (relating to the power to regulate interstate commerce).

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the

terms and conditions of employment or access to public services or

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act.

13

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. United States contribution to the seventh replenishment

of the resources of the Asian Development Fund

This section amends the Asian Development Bank Act by author- izing the United States to contribute $412 million to the Asian Development Fund to meet the U.S. obligation to the 4-year, seventh

replenishment of the Fund.

Section 2. United States contribution to the fifth replenishment of

the resources of the International Fund for Agricultural Development

This section authorizes the United States to contribute $30 million to the International Fund for Agricultural Development (IFAD)

to meet the U.S. commitment to the 2-year, fifth replenishment of

IFAD. It also requires, within 3 months after the date of enactment, that the Secretary of the Treasury submit to Congress a report on the participation of IFAD in the enhanced Highly Indebted

Poor Country Initiative.

Section 3. HIV/AIDS strategic plan

This section amends title XVI of the International Financial Institutions Act by requiring the Secretary of the Treasury to instruct

the respective U.S. Executive Director or U.S. Governor, as appropriate, to support continued efforts to fight the spread of HIV/

AIDS, tuberculosis, malaria, and other infectious diseases by the

Asian Development Bank/Fund, the African Development Bank/

Fund, the International Fund for Agricultural Development, and

the Inter-American Development Bank. These efforts include the

development of a strategic plan, the integration of disease related

activities in existing projects, implementation of HIV/AIDS and

other disease impact criteria in evaluating new projects, and support training for professional staff on HIV/AIDS.

Section 4. User fees

This section amends title XVI of the International Financial Institutions Act by requiring the Secretary of the Treasury to instruct

the U.S. Executive Director or U.S. Governor, as appropriate, at

the Asian Development Bank/Fund, the African Development

Bank/Fund, the International Fund for Agricultural Development,

and the Inter-American Development Bank to oppose any loan,

grant, document, or strategy that is subject to endorsement or approval by the board of directors of any such institution, which includes user fees or service charges in impoverished countries directly or under the guise of community financing, cost-sharing, or

cost recovery mechanisms, for primary education or primary

healthcare, including prevention and treatment efforts for HIV/

AIDS, malaria, tuberculosis, and infant, child, and maternal wellbeing.

Section 5. Transparency

This section amends title XV of the International Financial Institutions Act by requiring the Secretary of Treasury to instruct the

U.S. Executive Director or U.S. Governor, as appropriate, to the

Asian Development Bank/Fund, the African Development Bank/

14

Fund, the International Fund for Agricultural Development, the

Inter-American Development Bank, and the European Bank for Reconstruction and Development to continue to make efforts towards

transparency in these institutions. These efforts include working

towards ensuring the following: (1) meetings of the boards of directors or the board of governors, as appropriate, are open to the public with the exception of the discussion of sensitive matters, such

as individual personnel matters; (2) the transcripts of such meetings are available to the public no later than 60 calendar days after

the meetings, with the exception of the discussion of sensitive matters, such as individual personnel matters; (3) and all key documents that are presented for the endorsement or approval by the

boards of directors or board of governors, as appropriate, will be

made available to the public at least 15 days before consideration

by the board.

This section also requires the relevant U.S. Executive Director or

U.S. Governor, as appropriate, to inform their respective institutions regarding the transparency goals listed in this legislation in

a manner that the Secretary of the Treasury deems appropriate. In

addition, the U.S. Executive Director or U.S. Governor will be required to testify annually at the request of the House Financial

Services Committee and the Senate Foreign Relations Committee

Chairpersons on transparency and other issues. This section also

creates a new FY2002 authorization of $10 million for a transparency grant or grants to be awarded by Treasury to relevant

international institutions that meet the transparency goals of this

section and commit to using the grant for future transparency activities. Under this section, the Secretary of the Treasury must also

submit to the House Financial Services Committee and the Senate

Foreign Relations Committee a written report detailing the steps

that have been taken towards the transparency goals of this section

on an annual basis. Finally, this section requires Congress to pursue transparency goals at all official interparliamentary dialogues

and meetings as appropriate.

Section 6. General objectives

This section amends title XVI of the International Financial Institutions Act by requiring the Secretary of the Treasury to instruct

the U.S. Executive Director or U.S. Governor, as appropriate, at

the Asian Development Bank/Fund, African Development Bank/

Fund, the Inter-American Development Bank, and the International Fund for Agricultural Development to focus on poverty alleviation, economic growth, increased productivity, sustainable development, environmental protection, labor rights, and an increased emphasis on education.

Section 7. Requirements for financial support for dams

This section amends title XVI of the International Financial Institutions Act by requiring the Secretary of the Treasury to instruct

the U.S. Executive Director or U.S. Governor, as appropriate, at

the Asian Development Bank/Fund, African Development Bank/

Fund, the Inter-American Development Bank, and the International Fund for Agricultural Development to oppose any loan

which provides support for any project that includes a dam unless

the project conforms to the enumerated criteria.

15

Section 8. Study by the General Accounting Office

This section requires, within one year after the date of this bill,

GAO to submit to the House Financial Services Committee and the

Senate Foreign Relations Committee a report on the benefits and

costs of the African Development Fund, the Asian Development

Fund, the International Fund for Agricultural Development, and

the Fund for Special Operations of the Inter-American Development Bank, providing grants instead of loans.

Section 9. Commendation

This section finds that the African Development Bank and Fund

President Omar Kabbaj should be commended for his successful reform efforts and encourages his continued efforts at reform.

Section 10. Action by the President

This section amends title XVI of the International Financial Institutions Act by providing that if the President determines that a

foreign country has taken or has committed to take actions that either contribute or do not contribute to efforts of the United States

to deter, or prevent acts of international terrorism, the Secretary

of the Treasury may, consistent with other applicable law, instruct

the United States Executive Director or the United States Governor, as appropriate, of the multilateral banks to take this determination into account in considering whether to approve an application of the country for assistance from the institution.

Section 11. Sense of the Congress regarding privatization projects

This section amends title XVI of the International Financial Institutions Act by making it a sense of Congress that the Secretary

of the Treasury should instruct the U.S. Executive Director or U.S.

Governor, as appropriate, at the Asian Development Bank/Fund,

the African Development Bank/Fund, the International Fund for

Agricultural Development, the Inter-American Development Bank,

and the European Bank for Reconstruction and Development to use

the voice and vote of the United States to oppose the provision by

a respective institution of assistance for a project that involves privatization of a government industry if certain enumerated criteria

are not met.

Section 12. Opposition of United States to reduction of minimum

wage below internationally recognized level of poverty

This section amends title XVI of the International Financial Institutions Act by requiring the Secretary of the Treasury to instruct

the U.S. Executive Director at the African Development Bank/

Fund, the Asian Development Bank/Fund, the Inter-American Development Bank, and the European Bank for Reconstruction and

Development, and the U.S. Governor of the International Fund for

Agricultural Development to oppose any loan, grant, document, or

strategy that is subject to endorsement or approval by the board

of any such institution, which includes any provision that would

recommend or encourage the reduction of a country’s minimum

wage to a level of less than $2 per day.

16

Section 13. Support for projects that are directed at addressing arsenic contamination in drinking water in South Asia

This section amends title XVI of the International Financial Institutions Act by requiring the Secretary of the Treasury to instruct

the U.S. Executive Director at the Asian Development Fund to use

the voice and vote of the United States to support projects that are

directed at arsenic contamination in drinking water in South Asia.

In a Colloquy between the Members it was agreed that this amendment encouraged the USEDs to use the country standard to measure arsenic levels as opposed to the World Health Organization

standard.

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the

House of Representatives, changes in existing law made by the bill,

as reported, are shown as follows (new matter is printed in italic

and existing law in which no change is proposed is shown in

roman):

SECTION 31 OF THE ASIAN DEVELOPMENT BANK ACT

SEC. 31. SEVENTH REPLENISHMENT.

(a) CONTRIBUTION AUTHORITY.—

(1) IN GENERAL.—The United States Governor of the Bank

may contribute on behalf of the United States $412,000,000 to

the Asian Development Fund, a special fund of the Bank.

(2) SUBJECT TO APPROPRIATIONS.—The authority provided by

paragraph (1) shall be effective only to such extent or in such

amounts as are provided in advance in appropriations Acts.

(b) LIMITATIONS ON AUTHORIZATION OF APPROPRIATIONS.—For

contribution authorized by subsection (a), there are authorized to be

appropriated to the Secretary of the Treasury not more than

$412,000,000, without fiscal year limitation.

INTERNATIONAL FINANCIAL INSTITUTIONS ACT

* * * * * * *

TITLE XV—OTHER POLICIES

* * * * * * *

SEC. 1504. TRANSPARENCY.

(a) IN GENERAL.—The Secretary of the Treasury shall instruct the

United States Executive Director at the African Development Bank,

the African Development Fund, the Asian Development Bank, the

Asian Development Fund, a special fund of the Asian Development

Bank, the Inter-American Development Bank, and the European

Bank for Reconstruction and Development, and the United States

Governor of the International Fund for Agricultural Development

to— (1) continue to make efforts to promote greater transparency

regarding the activities of such institutions, including project

design, project monitoring and evaluation, project implementation, resource allocation, and decisionmaking;

17

(2) support continued efforts to allow informed participation

and input by affected communities, including translation of information on proposed projects, providing information through

information technology applications, oral briefings, and outreach to and dialogue with community organizations and institutions in affected areas; and

(3) work toward ensuring that—

(A) meetings of the Boards of Directors (or, in the case of

the International Fund for Agricultural Development, the

Board of Governors) of their respective institutions are open

to the public and the media, except for discussion of sensitive matters such as individual personnel matters;

(B) transcripts of such meetings are available to the public no later than 60 calendar days after the meetings, except

for discussion of sensitive matters such as individual personnel matters; and

(C) all key documents that are presented for endorsement

or approval by the Board of Directors (or, in the case of the

International Fund for Agricultural Development, the

Board of Governors) of their respective institutions will be

made available to the public at least 15 days before consideration by the Board.

(b) STATEMENT OF GOALS.—The Secretary of the Treasury shall

instruct the United States Executive Director at the African Development Bank, the African Development Fund, the Asian Development

Bank, the Asian Development Fund, a special fund of the Asian Development Bank, the Inter-American Development Bank, and the

European Bank for Reconstruction and Development, and the

United States Governor of the International Fund for Agricultural

Development to inform their respective institutions of the goals enumerated in subsection (a), in a manner that the Secretary of the

Treasury deems appropriate.

TITLE XVI—HUMAN WELFARE

* * * * * * *

SEC. 1625. HIV/AIDS STRATEGIC PLAN.

The Secretary of the Treasury shall instruct the United States Executive Directors at the African Development Bank, the African Development Fund, the Asian Development Bank, the Asian Development Fund, a special fund of the Asian Development Bank, and the

Inter-American Development Bank, and the United States Governor

of the International Fund for Agricultural Development to support

continued efforts by such institutions as appropriate in regard to

HIV/AIDS, tuberculosis, malaria, and other infectious diseases,

including—

(1) development and implementation of a strategic plan to

fight against the spread of HIV/AIDS, tuberculosis, malaria,

and other infectious diseases;

(2) integration of HIV/AIDS, tuberculosis, malaria, and other

infectious diseases activities in ongoing projects as appropriate,

development of new dedicated HIV/AIDS, tuberculosis, malaria, and other infectious diseases, projects as appropriate that

take into consideration the institution’s mandate and core

18

strengths, and the building of AIDS-mitigation measures into

other projects;

(3) design and implementation of HIV/AIDS, tuberculosis,

malaria, and other infectious diseases impact assessment criteria into environmental and social assessment processes that

the institution considers when designing and evaluating new

project proposals;

(4) work on disseminating information on best practices and

project design for HIV/AIDS, tuberculosis, malaria, and other

infectious diseases projects; and

(5) support training for professional staff on HIV/AIDS, tuberculosis, malaria, and other infectious disease prevention

issues to ensure that these health-related concerns are integrated into all aspects of the work of the institution.

SEC. 1626. USER FEES.

The Secretary of the Treasury shall instruct the United States Executive Director at the African Development Bank, the African Development Fund, the Asian Development Bank, the Asian Development Fund, a special fund of the Asian Development Bank, and the

Inter-American Development Bank, and the United States Governor

of the International Fund for Agricultural Development to oppose

any loan, grant, document, or strategy that is subject to endorsement or approval by the board of directors of any such institution,

which includes user fees or service charges in impoverished countries directly or under the guise of community financing, cost-sharing, or cost recovery mechanisms, for primary education or primary

health care, including prevention and treatment efforts for HIV/

AIDS, malaria, tuberculosis, and infant, child, and maternal wellbeing.

SEC. 1627. GENERAL OBJECTIVES.

The Secretary of the Treasury shall instruct the United States Executive Director at the African Development Bank, the African Development Fund, the Asian Development Bank, the Asian Development Fund, a special fund of the Asian Development Bank, and the

Inter-American Development Bank, and the United States Governor

of the International Fund for Agricultural Development to focus on

poverty alleviation, economic growth, increased productivity, sustainable development, environmental protection, labor rights, and

an increased focus on education.

SEC. 1628. REQUIREMENTS FOR FINANCIAL SUPPORT FOR DAMS.

The Secretary of the Treasury shall instruct the United States Executive Directors at the African Development Bank, the African Development Fund, the Asian Development Bank, the Asian Development Fund, a special fund of the Asian Development Bank, and the

Inter-American Development Bank, and the United States Governor

of the International Fund for Agricultural Development to oppose

any loan which provides support for any project that includes a

dam unless the project conforms to all of the following terms:

(1) Comprehensive and participatory assessments of the energy, water, and flood management needs to be met and different options for meeting these needs are developed before detailed studies are done on any specific project.

19

(2) Priority is given to demand side management measures

and optimizing the performance of existing infrastructure before

building any new projects.

(3) No dam is built without full consultation with affected

people.

(4) Periodic participatory reviews are done for existing dams

to assess issues including dam safety, and the possibility of

dam decommissioning.

(5) Mechanisms are developed to provide social compensation

for those who are suffering the impacts of dams, and to restore

damaged ecosystems.

SEC. 1629. ACTION BY THE PRESIDENT.

If the President determines that a foreign country has taken or

has committed to take actions that either contribute or do not contribute to efforts of the United States to respond to, deter, or prevent

acts of international terrorism, the Secretary of the Treasury may,

consistent with other applicable law, instruct the United States Executive Director at, or the United States Governor of, the regional

multilateral devlopment bank to take the determination into account

in considering whether to approve an application of the country for

assistance from the institution.

SEC. 1630. SENSE OF THE CONGRESS REGARDING PRIVATIZATION

PROJECTS.

The Secretary of the Treasury should instruct the United States

Executive Director at the Asian Development Bank, the African Development Bank, the African Development Fund, the International

Fund for Agricultural Development, the Inter-American Development Bank, and the European Bank for Reconstruction and Development, and the United States Governor of the International Fund

for Agricultural Development to use the voice and vote of the United

States to oppose the provision by the respective institution of assistance for a project that involves privatization of a government-held

industry or sector if—

(1) the privatization transaction is not implemented in a

transparent manner;

(2) the privatization transaction is not implemented in a

manner that adequately protects the interests of workers, small

investors, and vulnerable groups in society to the extent that

they are affected by the privatization transaction; or

(3) appropriate regulatory regimes have not been established

to ensure the proper function of competitive markets in the industry or sector.

SEC. 1631. OPPOSITION OF UNITED STATES TO REDUCTION OF MINIMUM WAGE BELOW INTERNATIONALLY RECOGNIZED

LEVEL OF POVERTY.

The Secretary of the Treasury shall instruct the United States Executive Director at the African Development Bank, the African Development Fund, the Asian Development Bank, the Asian Development Fund, a special fund of the Asian Development Bank, the

Inter-American Development Bank, and the European Bank for Reconstruction and Development, and the United States Governor of

the International Fund for Agricultural Development to oppose any

loan, grant, document, or strategy that is subject to endorsement or

approval by the board of directors of any such institution, which inVerDate 11-MAY-2000 09:29 Nov 16, 2001 Jkt 099006 PO 00000 Frm 00019 Fmt 6659 Sfmt 6603 E:\HR\OC\HR291.XXX pfrm07 PsN: HR291
20

cludes any provision that would recommend or encourage the reduction of a country’s minimum wage to a level of less than $2.00 per

day.

SEC. 1632. SUPPORT FOR PROJECTS THAT ARE DIRECTED AT ADDRESSING ARSENIC CONTAMINATION IN DRINKING

WATER IN SOUTH ASIA.

The Secretary of the Treasury shall instruct the United States Executive Director at the Asian Development Fund, a special fund of

the Asian Development Bank, to use the voice and vote of the United

States to support projects that are directed at addressing arsenic

contamination in drinking water in South Asia.

* * * * * * *

(21)

DISSENTING VIEWS

Congress can do a great service to the American taxpayer, as

well as citizens in developing countries, by rejecting HR 2604,

which reauthorizes two multilateral development banks, the International Fund for Agricultural Development (IFAD) and the Asian

Development Fund (AsDF).

Congress has no constitutional authority to take money from

American taxpayers and send that money overseas for any reason.

Furthermore, such foreign aid undermines the recipient countries

long-term economic progress by breeding a culture of dependency.

Ironically, foreign aid also undermines long-term United States foreign policy goals by breeding resentment among recipients of the

aid which may manifest itself in a foreign policy hostile to the

United States.

If Congress lacks authority to fund an international food aid program, then Congress certainly lacks authority to use taxpayer

funds to promote economic development in foreign lands. Programs

such as the AsDF are not only unconstitutional, but, by removing

resources from the control of consumers and placing them under

the control of bureaucrats and politically powerful special interests,

these programs actually retard economic development in the countries receiving this ‘‘aid!’’ This is because funds received from programs like the AsDFD are all-to-often wasted on political boondoggles which benefit the political elites in the recipient countries,

but are of little benefit to the individual citizens of those countries.

In conclusion, HR 604 authorizes the continued taking of taxpayer funds for unconstitutional and economically destructive programs. I therefore urge my colleagues to reject this bill, return the

money to the American taxpayers, and show the world that the

United States Congress is embracing the greatest means of generating prosperity: the free market.

RON PAUL.

Æ