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THE WORLD BANK AND MULTILATERAL 

DEVELOPMENT BANKS’ AUTHORIZATION 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

INTERNATIONAL MONETARY 

POLICY AND TRADE 

OF THE

COMMITTEE ON FINANCIAL SERVICES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

OCTOBER 4, 2011 

Printed for the use of the Committee on Financial Services 

Serial No. 112–68 

( 

(II) 

HOUSE COMMITTEE ON FINANCIAL SERVICES 

SPENCER BACHUS, Alabama, Chairman 

JEB HENSARLING, Texas, Vice Chairman 

PETER T. KING, New York 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

RON PAUL, Texas 

DONALD A. MANZULLO, Illinois 

WALTER B. JONES, North Carolina 

JUDY BIGGERT, Illinois 

GARY G. MILLER, California 

SHELLEY MOORE CAPITO, West Virginia 

SCOTT GARRETT, New Jersey 

RANDY NEUGEBAUER, Texas 

PATRICK T. MCHENRY, North Carolina 

JOHN CAMPBELL, California 

MICHELE BACHMANN, Minnesota 

THADDEUS G. McCOTTER, Michigan 

KEVIN McCARTHY, California 

STEVAN PEARCE, New Mexico 

BILL POSEY, Florida 

MICHAEL G. FITZPATRICK, Pennsylvania 

LYNN A. WESTMORELAND, Georgia 

BLAINE LUETKEMEYER, Missouri 

BILL HUIZENGA, Michigan 

SEAN P. DUFFY, Wisconsin 

NAN A. S. HAYWORTH, New York 

JAMES B. RENACCI, Ohio 

ROBERT HURT, Virginia 

ROBERT J. DOLD, Illinois 

DAVID SCHWEIKERT, Arizona 

MICHAEL G. GRIMM, New York 

FRANCISCO ‘‘QUICO’’ CANSECO, Texas 

STEVE STIVERS, Ohio 

STEPHEN LEE FINCHER, Tennessee 

BARNEY FRANK, Massachusetts, Ranking 

Member 

MAXINE WATERS, California 

CAROLYN B. MALONEY, New York 

LUIS V. GUTIERREZ, Illinois 

NYDIA M. VELA ́ ZQUEZ, New York 

MELVIN L. WATT, North Carolina 

GARY L. ACKERMAN, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

MICHAEL E. CAPUANO, Massachusetts 

RUBE ́ N HINOJOSA, Texas 

WM. LACY CLAY, Missouri 

CAROLYN MCCARTHY, New York 

JOE BACA, California 

STEPHEN F. LYNCH, Massachusetts 

BRAD MILLER, North Carolina 

DAVID SCOTT, Georgia 

AL GREEN, Texas 

EMANUEL CLEAVER, Missouri 

GWEN MOORE, Wisconsin 

KEITH ELLISON, Minnesota 

ED PERLMUTTER, Colorado 

JOE DONNELLY, Indiana 

ANDRE ́ CARSON, Indiana 

JAMES A. HIMES, Connecticut 

GARY C. PETERS, Michigan 

JOHN C. CARNEY, JR., Delaware 

LARRY C. LAVENDER, Chief of Staff 

(III) 

SUBCOMMITTEE ON INTERNATIONAL MONETARY POLICY AND TRADE

GARY G. MILLER, California, Chairman 

ROBERT J. DOLD, Illinois, Vice Chairman 

RON PAUL, Texas 

DONALD A. MANZULLO, Illinois 

JOHN CAMPBELL, California 

MICHELE BACHMANN, Minnesota 

THADDEUS G. McCOTTER, Michigan 

BILL HUIZENGA, Michigan 

CAROLYN MCCARTHY, New York, Ranking 

Member 

GWEN MOORE, Wisconsin 

ANDRE ́ CARSON, Indiana 

DAVID SCOTT, Georgia 

ED PERLMUTTER, Colorado 

JOE DONNELLY, Indiana 

(V) 

C O N T E N T S 

Page 

Hearing held on: 

October 4, 2011 ................................................................................................. 1 

Appendix: 

October 4, 2011 ................................................................................................. 29 

WITNESSES 

TUESDAY, OCTOBER 4, 2011 

Debevoise, Hon. Eli Whitney II, former U.S. Executive Director, The World 

Bank Group; and Senior Partner, Arnold & Porter LLP .................................. 10 

Green, Hon. Mark, former U.S. Ambassador to Tanzania; former U.S. Representative (R–WI); and Senior Director, U.S. Global Leadership Coalition 

(USGLC) ................................................................................................................ 8 

Murphy, John, Vice President for International Affairs, U.S. Chamber of 

Commerce ............................................................................................................. 15 

Runde, Daniel F., Schreyer Chair in Global Analysis; and Co-Director of 

the Project on U.S. Leadership in Development, Center for Strategic and 

International Studies (CSIS) ............................................................................... 12 

APPENDIX 

Prepared statements: 

Debevoise, Hon. Eli Whitney II ....................................................................... 30 

Green, Hon. Mark ............................................................................................. 37 

Murphy, John .................................................................................................... 44 

Runde, Daniel F. ............................................................................................... 50 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Miller, Hon. Gary: 

Letter from the Bretton Woods Committee to Speaker Boehner and Majority Leader Reid, dated October 4, 2011 .................................................. 57 

(1) 

THE WORLD BANK AND MULTILATERAL 

DEVELOPMENT BANKS’ AUTHORIZATION 

Tuesday, October 4, 2011 

U.S. HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON INTERNATIONAL

MONETARY POLICY AND TRADE, COMMITTEE ON FINANCIAL SERVICES, Washington, D.C. 

The subcommittee met, pursuant to notice, at 2:27 p.m., in room 

2128, Rayburn House Office Building, Hon. Gary Miller [chairman 

of the subcommittee] presiding. 

Members present: Representatives Miller of California, Dold, 

McCotter, Huizenga; McCarthy of New York, Moore, Carson, and 

Scott. 

Ex officio present: Representative Frank. 

Also present: Representative Al Green of Texas. 

Chairman MILLER OF CALIFORNIA. The committee is called to 

order. 

Today’s hearing will be on the World Bank and multilateral development banks’ authorization. 

We are going to limit each side to 10 minutes, as agreed to with 

the ranking member previously. At this point, I yield myself as 

much time as I may consume. 

We meet today to examine a discussion draft legislation to authorize general capital increases for the International Bank for Reconstruction and Development (IBRD), the Inter-American Development Bank (IDB), the African Development Bank (AfDB), and 

the European Bank of Reconstruction and Development (EBRD). 

The Treasury Department has requested authorization for the 

United States to make capital increase payments in order to maintain American leadership at these multilateral development banks 

(MDBs), which is important to U.S economic and national security. 

However, if the United States does not increase its capital stock at 

the banks, then the United States could lose its leadership position. 

This is the fourth hearing in our subcommittee’s consideration of 

these authorization requests. At our first hearing, we looked at the 

leadership role of the United States at the MDBs. Under Secretary 

Brainard testified that having a leadership position at the MDBs 

can influence bank policy decisions and, in some cases, can provide 

veto power over the decisions. If we do not authorize and fund 

these requests, the U.S. share will diminish, impacting our leadership and influence at these institutions. 

Our second hearing focused on the impact of MDBs on U.S. job 

creation. We learned about the ways in which MDBs’ financing 

2 

helped open developing markets, which can spur private-sector economic growth and employment in the United States. 

Our third hearing focused on how the World Bank and MDBs’ assistance to middle-income and poor countries around the world contributes to U.S. national security. We learned about how MDBs’ assistance helped developing countries become stable nations that 

can counteract the proliferation of terrorism and other threats to 

the United States. 

Today’s hearing considers a discussion draft of the Administration’s request for authorization for the general capital increases. As 

we review this discussion draft today, our focus will be on the consequence of any reduction or delay in meeting the U.S. commitment to the MDBs; the impact of U.S. leadership at the MDBs, ensuring that investment help to safeguard national and economic security; and specific policy directives or conditions that should be included or amended in the authorization legislation to ensure U.S. 

national and economic security. 

This hearing process has been an important one so that our subcommittee fully understands the role and impact of the MDBs on 

U.S. economic and national security. While the hearing leaves little 

doubt about how critical it is for the United States to move forward 

on schedule with the capital increases, I know the discussion draft 

causes some of my colleagues pause, because these authorizations 

come at a time when we are all focused on getting our own massive 

debt under control. 

These are the first capital increases we have had to consider in 

almost 2 decades. Our series of hearings on the Administration’s 

request were intended to help Members assess the benefit of the 

MDBs, given the current fiscal challenges that are facing Congress. 

This hearing illustrates that U.S leadership at these institutions 

is of critical importance. The MDBs are vital to addressing the 

world’s most pressing economic and national security challenges. At 

a time when we are worried about fiscal constraints, I would argue 

that the ability of these institutions to leverage limited resources 

is exactly what we need to do. 

Bilateral foreign assistance is under significant strain right now. 

The MDBs can alleviate this strain by pooling our resources with 

others to fund the most pressing development and national security 

needs. For example, every $1 the U.S. contributes to the IBRD as 

a part of the general capital increase will result in $30 in development lending. At the African Development Bank, every U.S. dollar 

yields more than $70 in lending. 

This approach makes financial sense. And with U.S. leadership 

at these institutions, we can ensure that their development support 

is aligned with U.S. interests. So while we are considering a discussion draft that contains authorization for spending, I would argue 

that this is a fiscally responsible approach to meeting our Nation’s 

economic and national security interests. 

This discussion draft contains a funding authorization as requested by the Administration. Prior to the subcommittee markup, 

we intend to include policy directives for the U.S. executive directors at these banks to ensure that these institutions have strong 

safety and soundness measures, procurement and anti-corruption 

safeguards, and transparent processes. 

3 

I look forward to working with the subcommittee members as we 

formulate these directives so that we can ensure that banks are 

well-managed, effective, and focused on priorities that will lead to 

security and economic stability around the globe. 

If the United States does not make these capital increases, the 

implications are serious. This is a difficult issue because a critical 

mission that the MDBs perform—promoting peace and stability— 

is not at the forefront of our constituents’ minds. The MDBs help 

foster U.S. national and economic security because we have a leadership role at these institutions. 

While we face critical fiscal choices right now, we cannot cede 

ground to other countries like China who are eager to replace us 

as leaders in all these institutions. If we do not lead, others will. 

They will set the agenda and priorities at the MDBs. I know our 

witnesses today plan to discuss these consequences, and I look forward to the hearing. 

At this point, I have 5 minutes to yield, and the ranking member 

has yielded that to former Chairman Frank. 

Mr. FRANK. Thank you, Mr. Chairman. I won’t take the whole 5 

minutes. 

I appreciate the way in which you and the gentlewoman from 

New York, the ranking member, have worked together here. This 

should not be—there are matters that are legitimately partisan 

where the parties and the ideologies legitimately differ. I don’t believe this is one of them. This is a matter of clear national interest 

that has had a strong bipartisan element. The president of the 

World Bank is, of course, a former high-ranking official of several 

Republican Administrations, Mr. Zoellick. And it is one of the 

areas, I think, in which there has been the greatest continuity in 

American foreign policy, which is very important. You can’t do economic development like a yo-yo. 

This is about the most cost-effective way we can spend our dollars. CBO does a very good job of pointing out that while we vote 

what looks like large sums, if you look at the actual budgetary impact on the United States, they are really quite small. It also gives 

us a way to have, frankly, a lot of influence with a little bit of 

cover. There is often resentment of America’s role in the world— 

often unfair, generally unfair, in my view. In this case, we get a 

multilateral set of clothes to wear while we are still able to pursue 

goals that we would probably have pursued otherwise, and I don’t 

think there is anything illegitimate about that. 

Much of what needs to be done here is to tell countries what to 

do when they might not want to do it. And if the United States 

were to do that unilaterally, that would be a problem. Doing it in 

the role of a multilateral institution is helpful. 

There was a time when that was being abused. I do think some 

of the multilateral institutions, 20 years ago and more, had an excessively rigid view, a one-size-fits-all approach to economies. That 

has been replaced by a great deal of flexibility. I think we now 

have instruments that are important, that help implement reasonable policies, that show flexibility. 

And there is more, I think, of an understanding that you can discredit democracy. In many of these cases over the years, we were 

trying both to promote economic development and democracy, as 

4 

people evolved from non-democratic regimes. And in too many 

cases, I think people were given the idea in some of these countries 

that democracy meant pain, it meant paying more for your water, 

it meant a whole lot of things that they weren’t necessarily crazy 

about, and that didn’t do democracy any good. That doesn’t mean 

you retreat from these rational proposals, but you do them in a better way. 

So I again say that you, Mr. Chairman, and the ranking member 

have worked very well on this. I know there have been conversations with our colleagues on the Appropriations Committee. I would 

hope this committee could go forward. And, as I said, I have been 

here since 1980. I can’t remember a President, a Secretary of State, 

or a Secretary of the Treasury of any party who was not an enthusiastic supporter of our participation in this. And I would hope that 

would carry over today. 

Thank you. 

Chairman MILLER OF CALIFORNIA. I yield the balance of our time 

to Vice Chairman Dold. 

Mr. DOLD. Thank you, Mr. Chairman. I want to thank you for 

holding this important hearing on authorizing general capital increases for the multilateral development banks as well as for holding our previous hearings on the MDBs. And I certainly echo the 

ranking member of the full committee’s thoughts with regard to a 

bipartisan approach. I think this is certainly an important task. 

The Obama Administration has asked Congress to maintain 

America’s MDB leadership by authorizing the multilateral development banks’ general capital increases. And, in response, we have 

held several hearings to explore MDB funding requirements, necessary MDB improvements, the benefits of America’s MDB leadership, and the costs that we would incur if we were to abdicate the 

MDB leadership to countries like China or other countries that 

might not share all of our national interests. 

Those earlier hearings demonstrated that America’s MDB leadership gives the United States meaningful influence over the multilateral development banks’ policies and practices while also improving clear domestic economic benefits and national security benefits. 

As many of our business leaders have told us, our MDB leadership promotes domestic economic prosperity and domestic job 

growth by contributing to political and economic stability around 

the world and by helping to open foreign markets to United States 

companies. By doing so, the MDBs are contributing to the next 

generation of consumer market countries, to their benefit and to 

America’s benefit as well. In fact, over the last decade, U.S. businesses and individuals received nearly 2,500 procurement contracts 

with the World Bank Group, totaling over $1.6 billion. 

In addition to our business leaders explaining the domestic economic benefits, many of our military and national security leaders 

have testified or written in support of fully funding our MDB contributions. According to those leaders, the MDBs are a critical component of our national security strategies. By helping stabilize vulnerable nations, our MDBs help them to counteract terrorism and 

weapons proliferation and other threats to the United States, while 

5 

also influencing their policies in ways that have a positive impact 

on our own national security interest. 

And we receive all of these economic and national security benefits at a very small contribution, while also leveraging multiples of 

that cost in the form of contributions from other countries, privatesector investments, and loan repayments. 

As I have said many times before, all of us can do a better job 

of communicating how little we are actually paying for these substantial economic and national security benefits. The reality is that 

we cannot have meaningful impact on our deficits or national debt 

by abdicating our MDB leadership to China and other nations that 

don’t necessarily share our national interest. 

While I support maintaining our MDB leadership, we all understand that the MDBs aren’t always perfect and that there are always opportunities for improvement. I am pleased that the appropriate Administration officials have been responsive to improvement suggestions. For example, I was pleased to hear that Assistant Treasury Secretary Lago announced at our last hearing that 

the United States would generally vote against Argentina projects 

until Argentina begins to comply with its international agreements 

and obligations. 

I know I have gone over my time, Mr. Chairman, so I yield back. 

Chairman MILLER OF CALIFORNIA. No, you actually have—you 

had 2 minutes that wasn’t recognized on the clock. There was a 

mistake. You have time. 

Mr. DOLD. Oh, fantastic. Thank you. I am going to continue then, 

if I may. 

I believe that we also must ensure that we have strong anti-corruption policies and systems, sound financing practices, strong procurement safeguards, thoughtful environmental considerations, and 

general transparency. 

So I look forward to hearing from our witnesses today about all 

of these topics and about the discussion draft that has resulted 

from our previous hearings. I do believe that this is an important 

topic. It is of vital national security interest as well as economic interest for our country. It is one of those things that, I am pleased 

to say, has broad bipartisan support, and I certainly look forward 

to working with my colleagues on the other side of the aisle to 

move this forward swiftly. 

And with that, Mr. Chairman, I yield back. 

Chairman MILLER OF CALIFORNIA. Thank you. 

Mr. Carson is recognized for 2 minutes. 

Mr. CARSON. Thank you, Mr. Chairman, for holding this very important hearing. 

Multilateral development banks provide the assistance needed in 

developing countries that helps sustain and further promote economic and social development. This hearing is timely. We will be 

discussing the authorization and appropriation of measures for capital increases for MDBs, including the World Bank, at a time when 

our Nation is facing huge economic challenges. And as we make 

difficult funding choices, it is very critical that we not forgot how 

international aid is closely linked to our own economic development. This funding shores up export markets, promotes economic 

6 

development and good governance, and it is a critical tool in our 

national security. 

I agree, it is important to examine the effects of total foreign aid 

provided to developing countries, including both bilateral aid and 

multilateral aid. We should continue to change our focus from getting money out the door to developing countries to delivering services to developing countries. We also need to engage in long-term 

activities, like the evaluation of projects after they are completed. 

We should continue to focus on building transparency of operating 

costs and how aid money is spent. 

This aid does serve vital economic and political functions. With one in four people in the developing world living on less than $1.25 

a day, rescinding assistance is simply not an option. 

Thank you, Mr. Chairman. I yield back the balance of my time. 

Chairman MILLER OF CALIFORNIA. Thank you. 

Mr. Scott, you are recognized for 3 minutes. 

Mr. SCOTT. Thank you very much, Mr. Chairman. 

This is indeed a very, very important hearing, and I am delighted that our chairman has chosen to hold it. 

I think a fundamental question we have to ask ourselves up 

front, though, is, how effective would this debt relief be in helping 

to alleviate poverty and promoting growth long-term in the developing countries where ruling governments are believed to be suffering from rampant corruption and nepotism, which is very real? 

So I think as we approach this, we have to examine, what impact 

does this corruption, does all of this have? And, in those cases, 

what would be an effective solution as we go forward? 

And as we continue to discuss the importance of multilateral development banks, we have to ensure that the critical needs of certain nations are met in order to better guarantee economic development and, thus, to give some stability to these societies and their 

communities. Greater access to capital will certainly allow certain 

countries to improve the quality of life of its citizens by means of 

improvement or even the initial establishment of some very, very 

simple cases—in infrastructure systems, like electricity, running 

water, things we basically take for granted in our country. 

The general capital increases as proposed in the discussion draft 

before this subcommittee today are certainly a good start. And 

since the MDBs significantly increased their lending following the 

2008 financial crisis, many of these organizations are in need of 

new funding. The discussion draft would satisfy this requirement 

to fill emptied accounts and would enable developing countries to 

take full advantage of the opportunities provided them. 

However, we should view the authorization and appropriation of 

the MDBs as an opportunity to promote reform for these institutions and have some understanding of the depth of the corruption 

and the nepotism that is rampant in many of these countries. 

Many developing countries have accumulated debt as a result of irresponsible borrowing and lending practices and, at times, caused 

by leaders’ pursuit of political influence, often—very often—at the 

expense of the nation’s very own citizens. 

To avoid such consequences, guidelines are very much needed to 

ensure the approval of responsible loans, namely accountability 

and transparency and appropriate evaluations of financial impact. 

7 

But this type of oversight would resemble very much what our full 

committee passed in the form of the Dodd-Frank financial reform 

last year. And it is needed to ensure that nations actually benefit 

from any degree of debt relief. That is critical and should be the 

bottom line. 

So I look forward to our discussion, Mr. Chairman. Thank you 

very much. 

Chairman MILLER OF CALIFORNIA. Thank you. 

I would like to welcome our panel today. We are going to introduce you a little out of order. Ms. Moore would like to introduce 

Mr. Mark Green. 

First, the Honorable Eli Whitney Debevoise was the U.S. executive director of the World Bank Group from 2007 to 2009 and is 

currently a partner at the law firm Arnold & Porter. While serving 

as the U.S. executive director, Mr. Debevoise had a leading role in 

capital increases and share realignment negotiations and participated in preparation for G8 and G20 summits. He is also the great 

grandson of Eli Whitney, the inventor of the cotton gin. 

Welcome. 

Mr. Daniel F. Runde holds the William A. Schreyer Chair in 

Global Analysis and is co-director of the Project on Prosperity and 

Development at the Center for Strategic and International Studies, 

CSIS. Prior to joining CSIS, Mr. Runde was the head of the foundation unit at the International Finance Corporation of the World 

Bank Group. Before that, he served at USAID as the director of the 

Office of Global Development Alliance. In September 2010, Mr. 

Runde was named as one of 40 under 40 in international development in Washington, D.C., by Devex Group. 

Mr. John Murphy is the vice president of the International Division of the U.S. Chamber of Commerce. Mr. Murphy played a key 

role in the Chamber’s work relating to protection of intellectual 

property, global regulatory cooperation, trade facilitation, and the 

World Trade Organization’s Doha development agenda negotiations. 

Mr. Murphy, we are glad you are here today to represent the 

Chamber. 

At this point, I will turn it over to Ms. Moore. 

Ms. MOORE. Thank you so much, Mr. Chairman. And I want to 

join my other colleagues in thanking you for calling this hearing 

today on this very important subject. 

It is really my pleasure to introduce our former colleague, Ambassador Mark Green, who served in the House of Representatives 

from 1999 to 2007. But I also served with him in the Wisconsin 

State legislature. He served in the House, and I had moved on to 

the Senate. And he had a very keen, sterling understanding of economics at that time. So, at a time when we were making strategic 

investments in Wisconsin, I would offer legislation in the State 

Senate and call him up and beg him to, please, don’t let the Democrats mess up my legislation and to baby-sit it for me. So I really, 

really appreciated working with him on a bipartisan basis back 

then. 

He came along to Congress and served from 1999 to 2007. And 

he served on the Judiciary Committee and the International RelaVerDate Nov 24 2008 18:28 Mar 13, 2012 Jkt 072609 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 K:\DOCS\72609.TXT TERRIE
8 

tions Committee. He does have a J.D. from the University of Wisconsin-Madison, so he is a well-educated lawyer. 

At that time, he really, Mr. Chairman, I am reflecting on your 

opening comments where you talked about the security component 

in this legislation, the economic stability and promoting peace and 

stability and not being preempted by other countries. And he certainly developed an expertise in international affairs during his 

tenure here in the House of Representatives. He put together innovative foreign policy initiatives, helped craft the Millennium Challenge Act; the Global Access to HIV–AIDS Prevention, Awareness, 

and Treatment Act of 2001; and the U.S. Leadership Against HIV– 

AIDS, Tuberculosis, and Malaria Act. 

After his service here, he became the Ambassador to Tanzania, 

overseeing the largest Millennium Challenge compact that we have 

had and significant PEPFAR programs. He has been the managing 

director of the Malaria No More Policy Center in Washington and 

is on the current board of the Millennium Challenge Corporation. 

He is a family man, married with kids. And he certainly does get 

it, the importance of this initiative. And I do welcome Ambassador 

Mark Green here today. 

Chairman MILLER OF CALIFORNIA. I would like to welcome each 

of you. 

Without objection, your written statements will be made a part 

of the record. You will each be recognized for a 5-minute summary. 

And, Ambassador Green, you and I were classmates in 1998, and 

it is good to have you back. You are recognized, Mr. Green. 

STATEMENT OF THE HONORABLE MARK GREEN, FORMER U.S. 

AMBASSADOR TO TANZANIA; FORMER U.S. REPRESENTATIVE (R-WI); AND SENIOR DIRECTOR, U.S. GLOBAL LEADERSHIP COALITION (USGLC) 

Mr. MARK GREEN. Thank you, Mr. Chairman, Ranking Member 

McCarthy, my friend and former colleague, Congresswoman Moore, 

and all the members of the subcommittee. It is an honor to appear 

before you here today to discuss the importance of the multilateral 

development banks and America’s international affairs programs 

from a national security perspective. 

I am here today in my capacity as a former ambassador and as 

senior director with the U.S. Global Leadership Coalition. USGLC 

is often called the ‘‘strange bedfellows coalition’’ because it is comprised of both American businesses like Boeing, Caterpillar, WalMart, Land O’Lakes, and the U.S. Chamber of Commerce, but also 

leading humanitarian NGOs—CARE, World Vision, Catholic Relief, 

and Bread for the World. We bring together bipartisan military, 

business, faith-based, and community leaders from all across the 

country who are united in the belief that even though all of these 

programs only constitute about 1 percent of our Federal budget, 

these programs are vitally important for America’s national security and economic growth, as well as our values. 

It goes without saying that our Nation is facing lots of fiscal 

challenges. As a former member of this committee, I know very 

well that you have tough choices to make in coming months. I also 

know that most Americans aren’t really aware of the critical mission that the World Bank and other MDBs perform, and this puts 

9 

even more political pressure on all of you for the funding requests 

and the legislative requests that you receive. 

My view, respectfully, is that support for these institutions is 

simply part of our Nation’s leadership obligations. These obligations help so many of our friends and allies in need and, as I hope 

this hearing will show, they help us, the United States, the American people. 

The world has changed dramatically, obviously, over these last 

few decades. Cold war threats have now been replaced by terrorism, pandemics, weak and failing states, and a number of growing strategic challenges, strategic competitors to America in the 

global arena. Our national security today is not only dependent 

upon the strong deterrent effect of a robust military but, quite 

frankly, also in a wide range of investments in our diplomatic and 

development tools. In addition to important programs that the 

United States oversees through USAID and other agencies, the 

MDBs provide a source of funding that aids in economic growth, 

and that, in turn, helps with stability and with peace. 

Investing in development enhances our national security by preventing conflicts before they require costly military action. As 

former Secretary of State Condoleezza Rice has said, ‘‘We must 

now use our foreign assistance to help prevent future Afghanistans 

and to make America and the world safer.’’ 

Former Secretary of Defense Bob Gates commented last year, 

‘‘Development contributes to stability. It contributes to better governance. And if you are able to do those things and do them in a 

focused and sustainable way, then it just may be unnecessary for 

us to send in soldiers.’’ He summed it up best by adding, simply, 

‘‘Development is a lot cheaper than sending soldiers.’’ 

My personal view and the view of the USGLC membership is 

that security in these challenging, ever-changing times means that 

our leaders must have all of the tools of power—hard power and 

soft power, military and civilian. And that includes important tools 

of development and diplomacy, bilateral and multilateral. The programs of the World Bank and the MDBs are a crucial tool in that 

toolbox. 

Withholding or cutting back U.S. contributions would not only 

limit the amount of capital available to them for carrying out their 

key missions, but it would risk diminishing our influence around 

the world. It risks ceding leadership to other countries, including 

rising powers like China that offer alternative funding sources for 

development. 

I think it is very important to realize that, as developing nations 

emerge, history shows they tend to reflect the values, the structures, the institutions, and the cultures of those that helped them. 

You don’t have to go back very far in history. You can look at 

South Korea and the extraordinary challenges that nation was facing 50 years ago, and the support that they received through the 

World Bank, which they have largely repaid. They have now become not only one of our crucial trading partners but one of our 

great military partners. And the work that they have done to help 

us make sure that the world is safe and more stable, particularly 

in that part of the world, quite frankly, it is invaluable, it is irreplaceable. 

10 

So we face lots of challenges. We face lots of fiscal challenges. We 

all know that they are there. And every agency, every institution 

must tighten its belt and scrutinize every program. But I think the 

great risk that we all see out there is, if the United States were 

to walk away from these institutions, there would be no way the 

world could be a better place. Clearly, we would be diminishing our 

own influence. And the world, simply put, is a better place when 

America is engaged, when America is strong, and when our leaders—past Administrations, current Administration, and future Administration—have all the tools in the toolbox. 

Thank you, Mr. Chairman. 

[The prepared statement of Mr. Mark Green can be found on 

page 37 of the appendix.] 

Chairman MILLER OF CALIFORNIA. Thank you, Mr. Green. 

I am going to be generous on time. We only have one panel 

today, and I think the testimony is very important to us. 

Mr. Debevoise, you are recognized for 5 minutes. 

STATEMENT OF THE HONORABLE ELI WHITNEY DEBEVOISE II, 

FORMER U.S. EXECUTIVE DIRECTOR, THE WORLD BANK 

GROUP; AND SENIOR PARTNER, ARNOLD & PORTER LLP 

Mr. DEBEVOISE. I thank you, Mr. Chairman. 

Chairman Miller, Ranking Member McCarthy, and distinguished 

members of the subcommittee, it is an honor to appear before the 

House Financial Services Committee’s Subcommittee on International Monetary Policy and Trade regarding the authorization of 

capital increases for the World Bank and the other multilateral development banks. 

I would like to pause here for a minute just to emphasize that 

we are talking about banks, albeit development banks. And, certainly, they produce very tangible development results. The World 

Bank has just published a so-called ‘‘Corporate Scorecard’’ where 

you can see some of the concrete results, results that help us 

achieve the Millennium Development Goals, and specific results in 

countries, results in terms of teachers recruited and trained, children immunized, pregnant women receiving antenatal care, roads 

constructed, people provided with access to improved sanitation, 

transmission and distribution lines constructed or rehabilitated, 

areas with irrigation services. So this is a key development instrument we are talking about. 

But we are talking about replenishing the capital of the hardloan windows of these banks. That is different from the soft-loan 

windows or IDA or the African Development Fund, which operate 

on the basis of triennial negotiations and annual appropriations. 

We are talking here about the hard-loan windows. And as has been 

mentioned already, requests for general capital are infrequent 

when we are talking about the hard-loan windows for these banks. 

Yet, we should also remember that 70 percent of the planet’s 

poor, defined as living on $1.25 a day or less, live in the countries 

that are eligible for borrowing from the hard-loan windows. To give 

you an example, in one country in South Asia today, there are 500 

million people living without electricity—more people than the entire population of the United States living without electricity. And 

this is a country which is in transition from the soft-loan to the 

11 

hard-loan area. So we need to keep the focus on what we are talking about with this specific legislation which is before you today. 

We also need to remember that we have been through a financial 

crisis. And I must say that, given the announcements that came 

out of last weekend’s meetings right here in Washington, things 

aren’t looking so good as we look over the horizon. 

The MDBs were asked to respond to the financial crisis the last 

time, and respond they did very strongly. The G20 asked them to 

find $250 billion so that, as we saved our banks and our population, the Europeans saved theirs, the poor people in the world 

were not forgotten. And the MDBs responded strongly, and that is, 

in fact, why we are here today. Because of the strength of that response, the capital of these institutions is depleted. And in the case 

of IBRD, for example, they will not be able to return to pre-crisis 

lending levels without more capital. 

We have heard a lot today about U.S. leadership. I think it is important to understand that our leadership manifests itself, in part, 

through our financial support. It also manifests itself through the 

quality of the ideas that we present for pursuit of the MDBs’ economic growth and poverty-reduction mission. We do not possess 50 

percent of the votes in any of the MDBs, so we cannot unilaterally 

block any particular loan or impose any particular policy. Although 

the MDBs have a strong American presence, they are not U.S. Government agencies or U.S.-controlled entities, so we must use our 

diplomatic voice to secure the outcomes we desire. And I might say, 

we have a very good track record of success at doing that. 

But if we do not subscribe to these general capital increases, our 

ability to persuade others will be reduced. You can imagine the 

conversation with the executive director from one of the African 

constituencies when Burundi and Rwanda have contributed to this 

capital increase and we have not. I don’t think the conversation 

would go very well. So we should not forfeit the position that we 

have. 

I am sure that Members will be curious to know what process 

was used to determine the need for the capital contributions and 

the level of their contributions. I have tried to describe this process 

in my written testimony. 

The key thing to understand is that these institutions are managed financially in a very conservative manner. And the United 

States is the strongest voice for that. We get tremendous leverage 

out of these capital investments. To give you an example, for the 

IBRD, the Administration request is for $117 million per year for 

the next 5 years, and we will get 30, 40, 50 times leverage out of 

that money. There are countries for whom we give bilateral assistance annually that is multiples of the $117 million which is being 

requested for the IBRD. 

Finally, I should say that there are reforms accompanying these 

requests for capital increases, reforms that the United States has 

pushed hard for throughout the negotiation process, reforms in 

terms of greater focus on development results, a subject which was 

addressed in some detail in IDA negotiations in the past and is 

now going to be used in the hard-loan windows as well. 

Disclosure policy: There is a new disclosure policy where the presumption has been reserved. The presumption is now in favor of 

12 

disclosure of documents, and only a short list of documents as exceptions, not the other way around. 

The institutional integrity units have been strengthened, and 

their performance is dramatically better. The inspection panel, 

which was an institution created at the instigation of the United 

States, the insistence of the United States, is now strong and vigorous. And the United States has been a stalwart defender of its 

independence. 

So these are just some examples of the reforms. There are others 

I could talk about. 

In conclusion, I would respectfully submit to this committee that 

it is time to move this authorization legislation for the World Bank 

and MDB capital increases, and it is the right decision for U.S. national and economic security. And we need to act now, as well, because inaction will result in forfeiture of our rights. 

So I commend these capital increases to you and thank you for 

your attention. I stand ready to answer any questions you may 

have. Thank you. 

[The prepared statement of Mr. Debevoise can be found on page 

30 of the appendix.] 

Chairman MILLER OF CALIFORNIA. Thank you very much. 

Mr. Runde, you are recognized for 5 minutes. 

STATEMENT OF DANIEL F. RUNDE, SCHREYER CHAIR IN 

GLOBAL ANALYSIS; AND CO-DIRECTOR OF THE PROJECT ON 

U.S. LEADERSHIP IN DEVELOPMENT, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES (CSIS) 

Mr. RUNDE. Thank you, Chairman Miller, Ranking Member 

McCarthy, and members of the subcommittee. 

Chairman MILLER OF CALIFORNIA. You might want to pull the 

microphone closer to you. We can’t hear you. 

Mr. RUNDE. Okay. Thank you. Thank you very much. I have a 

loud voice, but this helps. Thank you. 

Thank you, Chairman Miller, Ranking Member McCarthy, and 

members of the subcommittee. I am honored to appear here today 

and to have the opportunity to testify on the general capital increase for the multilateral development banks and U.S. leadership 

in them. 

The bottom line is, walking away from the general capital increase is a downpayment on American decline. 

The Obama Administration has made a request to Congress for 

an extraordinary contribution to a number of the MDBs, the multilateral development banks. It is critical that Congress act on this 

request so that the United States can maintain its overwhelming 

influence over these institutions, ensure that we have strong multilateral funding partners for the many challenges we face, and also 

invest in our national security. 

I recognize that making this request for the so-called general 

capital increases comes at a very difficult time, but the costs of 

walking away are very high. Maintaining our de facto control over 

the MDBs through this contribution is a critical investment in 

America’s national security because these institutions provide 

money and advice that, in fundamental ways, support our allies 

and U.S. national security objectives in places such as Afghanistan, 

13 

Libya, Iraq, Haiti, Colombia, Tunisia, and Southern Sudan. They 

are our set of funders of a U.S. version of globalization. We are in 

competition with other powers offering their darker version of 

globalization. 

A strong set of MDBs under U.S. leadership is also a critical instrument for achieving victory in the long war. The MDBs offer an 

American operating system for countries who want to plug into the 

positive aspects of globalization, including free-market principles, a 

more open trade regime, and the rule of law. 

In order to maintain our current level of leadership and influence 

in these MDBs, the United States will need to continue to retain 

its own ownership stake. We are going to have to pay to play. If 

not, other countries will fill the void and step in to take these institutions in directions that we will not like. 

The MDBs export, as I said, an American operating system of 

globalization. These institutions are heavily influenced by the 

United States. All or most of the business is conducted in English. 

All or most of the senior leadership and leading technical experts 

have studied, worked, or lived here in the United States. The 

MDBs almost always conduct agreements under U.S. or U.K. law. 

And the export performance standards and practices perfected or 

used in the United States. 

Washington policymakers often overlook the fact that the MDBs 

enjoy a level of credibility in many country contexts that the 

United States simply does not enjoy. If the MDBs are recommending the same course of action that we are recommending, in 

some contexts it is more palatable and the policymaker in a foreign 

country is more willing to accept the advice from an MDB. They 

are an instrument of our economic and national security interests 

worldwide. 

If we do not authorize the recapitalization and replenishment of 

the MDBs, a number of very negative consequences will likely 

occur. 

First, at the World Bank, we risk losing our unique veto power. 

At the African Development Bank, we risk decreasing our 

shareholdings by two-thirds, which would jeopardize our only seat 

on the board of directors. 

Of particular concern is the Inter-American Development Bank. 

At the IDB, all funding from other states is contingent on whether 

or not the United States pays its contribution, as to whether or not 

the United States ponies up its contribution. If the United States 

does not authorize recapitalization of the IDB, all other donors 

would cut back, sending an incredibly negative signal to Latin 

America and creating a far less effective IDB. Specifically, the IDB 

lending will shrink from its current and target levels of approximately $10 billion to $12 billion to pre-crisis levels of $6 billion to 

$7 billion a year. 

Recovery and reconstruction efforts in Haiti would be directly impacted, with the real potential to destabilize a very fragile democracy, with significant national security implications to the United 

States. Approximately $2 billion of development funding for Haiti 

is at risk because the IDB has agreed to use $2 billion of its income 

for Haiti over the next decade. 

14 

Shareholding in the various MDBs is distributed to reflect country contributions over many years. Shares that the United States 

does not pay for will ultimately be made available to other countries. And there is little doubt that they will be eaten up by countries with a different world view than us. 

In addition, because of our financial contributions in the past, we 

have enjoyed a preponderant role in these institutions by maintaining critical leadership posts: the World Bank presidency and other 

pivotal vice presidential posts at other institutions. In recent years, 

U.S. control of these roles has come under increased attack. By not 

participating fully in the general capital increase, we strengthen 

those who would like to see the United States lose these critical 

personnel posts. 

During the 2008–2009 financial crisis, the MDBs were asked by 

their shareholders, including the United States, to fire all their bullets as part of the crisis response. As a result, the recovery in developing countries was—the MDB softened the effects of the economic crisis and helped clear a path for the global economic recovery in developing countries. 

The way these institutions work is that they have a certain 

amount of shareholder capital from governments, including the 

United States, and the MDBs lend money against the shareholder 

capital. As you have heard from others, for every dollar provided 

by the United States, the World Bank lends $25 to developing 

countries. However, as a result of the financial crisis, most of the 

current shareholder capital is already spoken for through the loans 

that these institutions have made. If we want these institutions to 

continue to play a significant role in shaping the world around us 

in ways favorable to us, we need to ensure that they are able to 

lend at current levels. 

At the same time, U.S. foreign assistance, as well as that delivered by other donor countries, is coming under significant strain. 

As a consequence of the inevitable cuts in our bilateral foreign assistance budget, it is likely that the United States will stop providing foreign assistance bilaterally, primarily through USAID, to 

a large number of middle-income and lower-middle-income countries as we focus our limited dollars on the most pressing development and national-security-focused countries. Well-financed MDBs 

under U.S. leadership need to be a part of a U.S. graduation strategy, filling in the gaps for the United States in middle-income 

countries. 

Just a couple of observations about the national security implications and why the United States is safer with strong MDBs. 

First, in situations where there is a conflict, such as Libya and 

Afghanistan, the United States needs to build up and support local 

institutions as quickly as possible and do so in a way where we 

burden-share with other donors. And the MBDs allow to us do that. 

Second, in situations where we are supporting newly formed governments, policymakers need expert advice to manage public 

money, set up health systems, regulate banking systems, and set 

up the rules of the game for basic services like electricity and 

water. The MDBs often have the best technical experts in the 

world on a wide range of issues, ensuring that a government actually functions. 

15 

These institutions are far from perfect. In zones of conflict, they 

need to improve their flexibility, and they need to be willing to develop specialized cadres who can be deployed in some of the world’s 

worst contexts. These institutions can be very slow, and these institutions need to change. But we minimize the chances that these institutions will improve the right way if we do not have a leading 

seat at the table. As I said earlier, walking away from the general 

capital increase is a downpayment on American decline. 

I thank you for the opportunity to testify before you today, and 

I welcome any questions you may have. 

[The prepared statement of Mr. Runde can be found on page 50 

of the appendix.] 

Chairman MILLER OF CALIFORNIA. Thank you. 

Mr. Murphy, you are recognized for 5 minutes. 

STATEMENT OF JOHN MURPHY, VICE PRESIDENT FOR 

INTERNATIONAL AFFAIRS, U.S. CHAMBER OF COMMERCE 

Mr. MURPHY. Thank you, Chairman Miller, Ranking Member 

McCarthy, and distinguished members of the subcommittee. On behalf of the U.S. Chamber of Commerce, I am pleased to speak 

today about the importance of founding a robust international affairs budget in general and supporting the general capital increase 

for the World Bank and the other multilateral development banks 

in particular. 

No priority facing our Nation today is more important than putting Americans back to work. The biggest policy challenge we face 

is to create the 20 million jobs needed in this decade to replace the 

jobs lost in the recession and to meet the needs of our growing 

workforce. World trade and expanding U.S. access to global markets will play a vital role in reaching this goal. 

After all, outside our borders are markets that represent 73 percent of the world’s purchasing power, 87 percent of its economic 

growth, and 95 percent of it consumers. The resulting opportunities 

are immense. Already, one in three manufacturing jobs depends on 

exports, and one in three acres on American farms is planted for 

hungry consumers overseas. 

Nor is trade just for big companies. More than 97 percent of the 

quarter-million U.S. companies that export are small and midsized 

firms. And last year, more than half of all U.S. exports went to developing countries for the first time in a number of years. 

The international affairs budget plays a vital enabling role for 

U.S. companies to tap foreign markets and create jobs and prosperity at home. Although it represents less than 1.5 percent of the 

total Federal budget, the international affairs budget is critical to 

creating jobs, saving lives, and protecting our national security. 

Within that, the Chamber strongly supports authorizing and appropriation measures for capital increases for the multilateral development banks. 

American businesses understand these institutions’ vital role in 

fostering prosperity. The banks’ loans and expertise help developing countries to become reliable trading partners and open up 

their markets for U.S. goods and services. These loans come with 

conditions, such as strengthening transparency, promoting good 

governance, and improving the investment climate. 

16 

For example, in Ghana, a World Bank-funded project helped 

build a flyover bridge and a network of roads linking the country’s 

economic hubs with existing routes, creating a multipurpose industrial park. The results included over 3,000 investment projects valued at more than $12 billion and more than 300,000 new jobs. 

These investments and the accelerating pace of economic growth 

and development in Ghana powered a tripling in U.S. exports to 

Ghana over just the past 4 years. That sum sustains thousands of 

American jobs. 

Also, to facilitate cross-border trade, the World Bank has supported border modernization and trade facilitation initiatives with 

very favorable results. For example, a project covering Kenya, 

Uganda, and Rwanda has employed the one-stop border concept. 

The project has reduced the border clearance time for cargo at one 

post on the Kenya-Uganda border from an average of almost 2 

days, 5 years ago, to an average of only 7 hours today. 

It is also worth mentioning the critical role that the multilateral 

development banks played in addressing the shortage of trade finance that accompanied the recent financial crisis. That shortage 

of trade finance threatened to greatly add to the decline in world 

trade at the time and to exacerbate the recession that struck the 

United States and many other countries. 

In all of these cases, the United States plays a significant role 

in helping to shape these policies as the largest shareholder at the 

World Bank and the IDB and one of the largest at the others. As 

you have heard here today, failure to support the capital increase 

would undermine U.S. leadership and the ability to shape development priorities. 

I will skip over some of the things you have already heard. 

In addition, MDB loans generate many contract opportunities for 

U.S. firms and thousands of jobs here at home. The U.S. Chamber 

is mindful of the difficult financial circumstances facing our country. As the Chamber and more than 150 other business organizations wrote in a joint letter to Congress last week, the United 

States must find a way to stabilize its debt, reform entitlement programs, and comprehensively restructure the U.S. Tax Code. 

Achieving the necessary fiscal adjustment cannot be accomplished by abandoning more than a half a century of leadership in 

the multilateral development banks. Indeed, the capital increase 

for the banks is a small fraction of the international affairs budget, 

which, as I have said, is, itself, less than 1.5 percent of the total 

Federal budget. 

The United States cannot afford to sit on the sidelines while others seize leadership in the world economy, including at the multilateral development banks. We need to support this capital increase. At stake is the standing of the United States as the world’s 

leading power, our ability to exert positive influence around the 

world, our reputation and our brand overseas, and our best hopes 

of escaping high unemployment here at home. 

The U.S. Chamber of Commerce looks forward to working with 

members of the subcommittee to secure approval of the general 

capital increases for the multilateral development banks. 

Thank you very much. 

17 

[The prepared statement of Mr. Murphy can be found on page 44 

of the appendix.] 

Chairman MILLER OF CALIFORNIA. I thank each of you for your 

testimony. It was very, very informative. 

Mr. Debevoise, some people mistakenly think capital increases, 

or GCIs, are foreign aid. Can you explain the difference between 

these GCIs and foreign aid? And what happens to the profits 

earned from these loans? Does that help offset what the United 

States has to spend on foreign aid? 

Mr. DEBEVOISE. I thank you, Mr. Chairman. 

As I emphasized in my opening remarks, we are talking about 

the hard-loan windows of banks. So these are institutions that 

make loans at roughly market rates and they do generate profits. 

Annually, in each of the institutions, there is discussion about what 

to do with the profits. As in the management of any prudent bank, 

you set some aside for reserves; you put some in retained earnings 

so that the business could increase; and if there are things left 

over—in the case of the MDBs, money is currently being transferred to soft-loan windows. 

So, at the IBRD this last year, $520 million was allocated for 

transfer to IDA, which is the soft-loan window, thereby directly reducing the call on IDA contributors in that amount. There also can 

be transfers to special windows for crisis response situations, as 

well. 

Chairman MILLER OF CALIFORNIA. So a normal call would be the 

amount being transferred, so it is really an offset; it is a benefit 

to us on that side? 

Mr. DEBEVOISE. Right. The amount being transferred, if you will, 

reduces the amount that the United States and other donors to 

IDA would otherwise be asked to contribute on an annual basis. 

Chairman MILLER OF CALIFORNIA. Great. Thank you. 

Mr. Green, if the United States does not contribute to the GCIs, 

what are the potential risks to our national security? And how do 

MDBs break the cycle of conflict and insecurity in unstable countries? 

Mr. MARK GREEN. I think the best way of thinking about it—can 

I harken back to my opening testimony about the challenges and 

the threats that we face these days? As I mentioned, I served, obviously, in a part of the world where those challenges were very evident. Tanzania is a country that knew terrorism all too painfully. 

One of the things that was very clear is that poverty does not 

cause terrorism. That is something that we need to repeat over and 

over again. However, destitution, abject poverty can lead to despair. And despair is a condition, sadly, that all too often extremists know how to exploit. 

Where we can be part of institutions and initiatives that are 

working to create opportunity, to address those conditions that can 

lead to despair, we are most definitely enhancing our national security, we are most definitely involving ourselves in poverty relief, so 

that we are not only addressing the conditions but that we are 

being seen as doing so, which is very good for our image around 

the world and the alliances that we seek to build. 

When we step back from these multilateral institutions, which, 

as Congressman Frank pointed out, are sometimes able to operate 

18 

in parts of the world where, for a variety of political reasons, it 

may be more difficult for to us operate, we are seen as being less 

engaged in taking on those challenges. And there is, simply put, no 

way that that enhances our security. Removing ourselves creates a 

void in a vacuum for players, state players and non-state players, 

to be more engaged. And I think history shows us that can be a 

dangerous situation for us. 

So we are talking about preventing conflict, we are talking about 

addressing conditions that can lead to conflict. To me, that is as 

smart a national security investment as we can make. 

Chairman MILLER OF CALIFORNIA. Thank you. 

Mr. Runde, if we don’t fund the GCIs, what would the impact be 

to the various banks? And the comment by Mr. Green, the consequence of losing our leadership position in the banks, how would 

that—do you agree with that? 

Mr. RUNDE. There will be very negative consequences for the 

United States if we don’t participate. We are going to, as I said, 

lose de facto control over these institutions. We are exploiting an 

American form of globalization through these institutions. And to 

the extent that we lose control over these institutions, the kinds of 

messaging, the kinds of policies that these institutions export are 

going to change. We are going to move from a Texas Hold ’Em 

rules of the game to, perhaps, Chinese Mahjong rules of the game, 

in terms of the sorts of rule sets that are going to be exported from 

these multilateral development banks over time—not immediately, 

but over time. 

So I think we have to be very cognizant of the fact that we are 

on the knife-edge of control of a lot of these institutions. We do 

have to use our diplomatic voice, we have to persuade, but, overall, 

we continue to have control over these institutions. 

In the case of the Inter-American Development Bank, we spend 

a lot of time in the United States worrying about how we should 

engage with Latin America and how we can be constructive. To the 

extent that we are cutting back 50 percent on the lending that the 

IDB is going to do as a result of us not participating, it is an extremely bad signal. People really follow the goings-on of the InterAmerican Development Bank in Latin America, and so to the extent—we may not hear about it here, but they will certainly hear 

about it there, and it will have a very negative impact on our personal brand, in addition to what I described in terms of the implications for situations like Haiti. 

In the case of the African Development Bank and in the World 

Bank, those shares are going to come up for sale. There are willing 

buyers to buy those shares, and the negative impacts that I described earlier. And I think we will lose control over the World 

Bank presidency if we are not careful. 

Chairman MILLER OF CALIFORNIA. I don’t have time to ask Mr. 

Murphy a question, but maybe later. Mrs. McCarthy for 5 minutes. 

Mrs. MCCARTHY OF NEW YORK. Thank you, Mr. Chairman, Mr. 

Runde and Mr. Murphy also. Each one of you has talked about 

what the consequences would be if we do not pay our fair share 

and to stay ahead of it, and yet no one really mentions outlays. 

What countries are you talking about that might take over? 

19 

Mr. RUNDE. I think that certainly China has expressed interest 

in buying shares of the African Development Bank, that basically 

they have been— 

Mrs. MCCARTHY OF NEW YORK. So let’s give it a—what would 

you think is an example if China took over that would be different 

than the way we run the banks? I will open that up to everybody. 

Mr. RUNDE. I will take a stab at that. I think the things that we 

have pushed, for example, labor and environmental standards that 

we have exported through the World Bank and other multilateral 

development banks, that we have helped perfect here in the United 

States and that are exported through these institutions, I think we 

could expect that those sorts of standards would get a lot less emphasis. 

I also think the sorts of safeguards around corruption or around 

laying the groundwork for better governance or responsiveness to 

public—I am not saying democracy building per se, but sort of setting the table for democratic reforms and being responsive to— 

being more responsive to the societies that a government serves, I 

think those sorts of reforms that the multilateral development 

banks export would be certainly a lot less emphasized. 

Mrs. MCCARTHY OF NEW YORK. Mr. Murphy, what would the atmosphere be for our American businesses that are exporting if we 

lost our leadership with the banks? 

Mr. MURPHY. I think Mr. Runde’s comment about the InterAmerican Development Bank is very appropriate. If you look at the 

profile of American exports today, Latin America last year purchased 3 times as much goods as China. This is an incredibly important market for us. The Inter-American Development Bank is 

by far the most effective Pan-American institution. It is respected 

across the hemisphere. It does things that really matter, and at a 

time when in the past decade, U.S. exports to South America grew 

twice as fast in the past decade as our exports to Asia did, we need 

to be seen as leading the way within that institution and funding 

its efforts which are still incredibly important in terms of investments in infrastructure and education and in other programs. 

Mrs. MCCARTHY OF NEW YORK. One of the things I think we as 

Members of Congress struggle with is how to explain to our constituents why this is so important, especially with the economy 

problems that we are seeing here in our country. So, in everyday 

language, not Washington language, how would you give the best 

argument on why this is important to the United States, why it is 

important for jobs and for our workers, and why it is important 

that we pay our dues, because it is very hard to explain to people 

why many of us support these issues? 

Mr. DEBEVOISE. Thank you, Congresswoman, for that question. I 

will try and do it in three or four short sentences for you. 

Jobs depend on U.S. economic growth. U.S. economic growth is 

tied to exports. Increased exports need stable markets. These institutions contribute to the establishment of stable markets for U.S. 

exports that create jobs. 

Mr. MARK GREEN. Thank you, Ranking Member McCarthy. I 

guess I will try to take it a step further. As I harkened to earlier, 

history shows us the developing countries, as they emerge, reflect 

the values and institutions of those that assisted them along the 

20 

way. The World Bank, the MDBs, as well as our own bilateral assistance, economic assistance, is vital in helping many of these nations develop the kinds of institutions that are friendly to American 

involvement, including business investment. 

On top of that, we talk a great deal about the importance of 

trade and exports in keeping our economy growing. We need to remember that a large percentage of the projected export opportunities, growth opportunities, in this world for American businesses 

are in the developing world. In many parts of the developing world, 

they do not yet have the fully developed rules and institutions that 

would protect the kinds of things that American entrepreneurs are 

looking for in terms of their investments: private property ownership, well established; greater transparency; capitalist values in 

terms of bids for business; and rule of law and predictability. All 

of those things are vitally important if American capital, American 

business, is going to make investments in those markets. These institutions, and our support for these institutions, can facilitate 

that, which will lead to job creation. 

Mrs. MCCARTHY OF NEW YORK. Thank you very much. I yield 

back. 

Chairman MILLER OF CALIFORNIA. Mr. Dold, for 5 minutes. 

Mr. DOLD. Thank you, Mr. Chairman. 

As all of you probably know, Argentina has completely disregarded international agreements and obligations with respect to 

the World Bank’s international arbitration decisions, and Argentina has also not shown any improvements in counterterrorism and 

counternarcotics cooperation. For many of us in Congress, these are 

major problems that would seem to warrant American opposition 

to any MDB projects for Argentina. I am pleased that during our 

last hearing, the Administration announced that they would not be 

supporting Argentina, and has done so. But more generally, I think 

many of us are concerned not just with Argentina, but with any 

country that violates its international obligations, actually receiving MDB funding. 

So the question I have for the panel: Do any of you have any suggestions about how we here in Congress can legislatively ensure 

that we are not violating or not voting in favor of MDB funding for 

countries like Argentina who violate their international agreements? 

Mr. MURPHY. If I may, thank you very much for that question. 

Over the past 40 years, the United States has negotiated bilateral investment treaties to protect U.S. investment abroad with 

more than 40 countries, and in that time, governments have respected arbitral awards under those treaties in virtually every instance, until recently in the case of several cases relating to Argentina. It is very worrying and it calls into question the respect globally for these kinds of rules which, in fact, are embedded in more 

than 2,000 treaties worldwide. 

So from the perspective of the business community, we are 

pleased that the Administration has taken this step that you have 

mentioned, that they are using this lever of influence to convey 

that concern, and we would encourage that to continue in the future. 

21 

Mr. DOLD. Okay. Specifically, first of all, Mr. Debevoise, thank 

you so much for your answer to the ranking member. Very concise, 

and certainly one that we can use back at home when we are talking at town hall meetings as to why in the world we are spending 

money abroad. 

But if I can ask you, Mr. Debevoise and Mr. Runde, to comment, 

what can the MDBs do to ensure that environmental and social 

safeguards and transparency remain part of the MDB philosophy, 

and what would you say to those who say that the MDBs aren’t 

doing enough to promote environmental and social safeguards in 

those countries in which they operate? 

Mr. DEBEVOISE. Thank you for that question, Congressman. 

On the transparency front, I think that the World Bank has advanced hugely with the new disclosure policy. It is a difference of 

night and day, and I think that is a development that should not 

go unnoticed. We had an earlier question about what happens if we 

forfeit our leadership. I can tell you that the transparency policy 

that was adopted at the World Bank would not have happened 

under a situation with other strong voices on that board. 

And in the environmental and social safeguards area, I think the 

Bank today really is a leader, both in the private sector and in the 

public sector sides of the Bank. Commercial banks around the 

world do not make loans to sensitive, natural resource projects 

today without applying something called the equator principles 

which were developed at the IFC, part of the World Bank Group. 

We also have now very vigorous oversight in this area through the 

inspection panel mechanism, another mechanism that was strongly 

promoted by the United States and for whose independence we 

stand up regularly. 

So there are always going to be constituencies who feel aggrieved 

by particular projects, but I believe that the standards that are 

being developed and applied now are, in fact, quite robust and are 

the world leaders. 

Mr. RUNDE. I would just echo what Mr. Debevoise said about the 

standards. I think—I was going to mention the equator principles 

which, as Mr. Debevoise mentioned, were devised at the International Finance Corporation, and which if you want to do any sort 

of project finance investments in developing countries, they require 

meeting these equator principles, and so there are dozens and dozens of international banks that are signatories to these standards. 

And then if you want to do any sort of significant infrastructure 

investments, say, hydroelectric dams or other sorts of infrastructure, there are all sorts of significant environmental and other 

sorts of social hurdles that have to be looked at before those sorts 

of projects go through. I think that has been a direct result of U.S. 

leadership in asking hard questions. So I think having U.S. leadership has been very important, seeing those sorts of standards be 

put in place and enforced. 

Mr. DOLD. Thank you very much. Mr. Chairman, I yield back. 

Chairman MILLER OF CALIFORNIA. Thank you. Ms. Moore is recognized for 5 minutes. 

Ms. MOORE. Thank you so much, Mr. Chairman. 

A big concern that this committee has raised is about the current 

debt situation and expenditure, the unwillingness on the part of 

22 

many of our colleagues to make the 1 percent expenditure for these 

foreign investments. So, given that, I guess I want to ask, and I 

will start out by asking Mr. Runde, I was looking at your—I am 

sorry, Mr. Murphy—from the statement of the U.S. Chamber of 

Commerce, to share with us what the multiplier effect is for the investment in these MDBs with respect to the small amounts that 

we invest? 

And also, I wanted to ask Ambassador Green, who has been a 

member of this body, what we could say to the Majority party, who 

are Republicans right now, about the scoring of these investments 

and tell us a little bit about—and anyone else on the panel who 

might want to share in this—the difference in the callable capital, 

which is not scored and the paid-in authorization request. For example, the World Bank International Bank for Reconstruction and 

Development, the callable capital investment, the U.S. share would 

be $9.78 billion, and then the callable capital, which is not scored, 

is $9.19 billion, and then the paid-in authorization request is $587 

million over 5 years, $587 million over 5 years which is a little— 

it is about $115-or-so million a year in 5 years. That would be the 

investment. 

So I guess I want you guys to comment on whether or not this 

is a bang for the buck we might be able to sell to our colleagues 

in the Majority with respect to the investment opportunities this 

presents. 

Mr. MURPHY. Thank you for the question. 

With regard to the multiplier effect in my written testimony, I 

was referring—I was reflecting on how the World Bank Group, 

since its creation in the aftermath of World War II, has been able 

to provide nearly half a trillion dollars in financing for development 

projects around the world and was able to do this with a U.S. investment of just $2 billion in its capital base. That is a remarkable 

accomplishment, if you do the math. That is $25 in additional contributions from around the world for every one U.S. taxpayer dollar 

that went into it. We consider that an excellent investment. 

And if you consider how the Bank’s work has helped cut the mortality rate of young children in half in developing countries, reduce 

by half the proportion of people living in poverty, it is a remarkable 

record, and that is absolutely an investment in markets that are 

helping to drive American exports today. 

Ms. MOORE. Ambassador Green? 

Mr. MARK GREEN. Thank you. And I may not be the best qualified to go over the details of the scoring and break it down for you, 

but what I can say is, as we all know, we are sometimes victims 

of our own scoring rules. And I think one of the things that we 

have to remind ourselves is that regardless of which party we are 

talking about, and where our leaders come from, everyone agrees 

that a growing economy is the most important single goal that we 

can pursue in terms of providing the revenues and the good-paying 

jobs. Every economist will tell you that increasing exports is a vitally important part—in fact, it is an absolutely necessary part— 

of any growth strategy that the United States will undertake. 

These contributions help us in two ways. First off, they, for a 

modest investment, allow us to receive a much greater benefit beVerDate Nov 24 2008 18:28 Mar 13, 2012 Jkt 072609 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 K:\DOCS\72609.TXT TERRIE
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cause of the burden-sharing, the fact that we pay only in a portion 

for the benefits that are put out. 

But secondly, and I come back to it, for our job creators to be 

able to invest overseas, to export overseas, to be able to be involved 

overseas, there are certain foundational needs that they have. Investment in the World Bank facilitates those conditions that all of 

our entrepreneurs need in order to make any of the export opportunities meaningful. 

When you ask exporters why they aren’t able to go into certain 

countries in Africa, they will tell you it is because of a lack of a 

rule of law, unpredictability, insufficient transparency. The rules 

that the World Bank fosters, facilitates, and in some cases makes 

an absolute precondition of any loans that they make, are absolutely in our interest, in our governmental interest, but more importantly, in the interest of our job creators. 

Ms. MOORE. Thank you, Ambassador. Just a follow-up. Do you all 

agree that—I think that the example I gave was World Bank’s 

International Bank for Reconstruction and Development, where the 

U.S. share is $9.78 billion, and the callable capital is $9.19 billion. 

Has there ever been an instance that any of you know of where 

that callable capital has had to be paid? 

Mr. DEBEVOISE. Congresswoman, the answer to that question is 

no, not since 1945 has there ever been a call on the callable capital. 

I referred earlier today to the prudent financial management of 

these institutions, and this is an example of that. There is 6 percent that is actually paid in, in this capital increase and 94 percent 

which is callable capital; yet we are able to leverage. I know there 

are times in this committee where the word ‘‘leverage’’ might be a 

bad word, but this is leverage that is very prudently managed, and 

one of the consequences of dipping below 15 percent voting power 

in the World Bank would be that we would lose the ability to veto 

amendments to the articles. 

One of the key articles is the article that says that the callable 

capital is only available to pay bondholders if the bank defaults. 

The callable capital cannot be called just because the bank wakes 

up one day and says we want some more money. If we lose that 

15 percent, the credibility in Wall Street and the capital markets 

of the world will be at risk. 

Ms. MOORE. Thank you so much. And thank you, Mr. Chairman, 

for your indulgence. 

Chairman MILLER OF CALIFORNIA. Mr. Huizenga for 5 minutes. 

Mr. HUIZENGA. Thank you, Mr. Chairman, I appreciate it. Ambassador Green, it is good to see you again, and I just want to start 

off by saying thank you. I appreciate your leadership on some of 

these issues, and I know you had a chance to travel extensively 

with my predecessor into Africa and other places as well. I am a 

firm believer, though, that every garden party needs a skunk, and 

I just want to kind of pursue a few things. 

I am one of those people who is concerned about the outlay, the 

exposure that the American taxpayer has, and I understand some 

of my colleagues haven’t met a spending program they haven’t 

liked in the past, but these are uncharted territories that we are 

in, not just here in the United States but with the world economy. 

And it strikes me that we are trying to do two things here, or at 

24 

least the explanation seems to be doing two things: one, deal with 

aid; but two, talking about business investments. 

And I am just—I am concerned with the world economy as it is. 

Can we really expect that there are not going to be any defaults? 

I know you had just said that there have not been, I believe you 

said, since 1945 at least, a callable situation where those loans 

could be called. This $7.5 billion direct investment is about $36 billion, according to my math and numbers that I have, in potential 

exposure for this government and for our taxpayers. 

And going back to my colleague from Illinois, his question to Mr. 

Murphy, it seemed to me he didn’t really answer the question 

about how can we be assured that our tax dollars are not supporting governments that are problematic to us as we are moving 

forward. And, again, these tend to be nonbankable projects, right? 

That is, they can’t go out and get traditional bankable paper. They 

can’t get traditional backers. What is the assurance that these really are positive projects that we need to be involved in? 

So I open it up to any of you for a quick follow-up. And Mr. Murphy, I would like to hear specifically from the Chamber on that, 

too. 

Mr. DEBEVOISE. Thank you, Mr. Huizenga. It is a skunk’s question, but fortunately, I don’t sense the odor, because the answer is 

quite positive in that regard. 

The Bank has a long history of lending. It started lending to 

France after the Second World War and now lends in other countries. At the moment, there is one country in default to the World 

Bank: Zimbabwe. Argentina has paid everything, all of the other 

countries that you might think of that have had difficulty. That is 

because the Bank has a preferred creditor status, and it is recognized as such. Now, that is a de facto recognition. It is not a formal 

legal seniority, but it works. 

When I sat on the World Bank board and looked at the financials 

every year, I was always asking, is the loan loss reserve large 

enough? And the experience has been stellar. The defaults have 

been limited to cases where countries have literally been destroyed 

by civil war or things like that. But this institution, and the others 

as well, have very strong reserves to cover that type of situation, 

and it is something that is looked at very closely by the rating 

agencies which continue to rate the institution as AAA. 

Mr. HUIZENGA. I have 1 minute here, and I know I want to get 

a couple of other answers, but have we not redefined that debt in 

the past? Have we not restructured that? 

Mr. DEBEVOISE. I think what you are referring to is debts that 

were incurred by IDA countries, not by IBRD countries. That is 

what MDRI, the Multilateral Debt Relief Initiative, is all about. 

Those are the poorest of the poor countries, with per capita income 

below $1,300 a year of GNI; but IBRD countries, it is a completely 

different situation. There has never been any debt relief for an 

IBRD borrower. 

Mr. HUIZENGA. Mr. Murphy? 

Mr. MURPHY. My response is perhaps not as satisfactory as I 

would like it to be, but if the United States does not make these 

investments, then we lose the ability to be influential in the councils of how these decisions are made within the multilateral develVerDate Nov 24 2008 18:28 Mar 13, 2012 Jkt 072609 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 K:\DOCS\72609.TXT TERRIE
25 

opment banks. If you look around the world today, particularly in 

Africa, you see that Chinese investment and direct assistance is increasingly important. It is often tied to the development of natural 

resources in that country. The alternative to our investments and 

increasing the ability of the multilateral development banks to be 

influential in the developing world is most likely to see more activism on a direct bilateral basis by rising powers such as China. 

Mr. HUIZENGA. I appreciate the chairman’s charitable clock time 

here, but I guess I need to leave with this: Have there really been 

any successes in changing these corrupt governments? I think it 

was Mr. Runde earlier who talked about Haiti. One of the problems 

with Haiti as I have been reading—I have not visited there, but it 

is one of the things I have been reading—is the rampant corruption 

that is continuing to go on there, and how is that not an exposure 

that we should be afraid may come back and haunt us? 

Mr. RUNDE. Thank you for that. I do think that in some context, 

there is a national security component to what we are trying to do. 

I think in the case of Haiti, which is unique I think for a number 

of reasons, I think we have to think about the counter factuals. If 

we don’t prop up that government, do we really want several hundred thousand people getting on boats and coming to Miami? I 

think that is the cost. We have to choose what sort of an outcome 

we want. So I would say that in the case of Haiti, that is sort of 

in the background. 

I think in the case of other countries, have we seen countries reform over time? Absolutely. I think about countries like Chile or 

South Korea or Ghana or France that were all recipients of World 

Bank loans over time and participated in reforms that were American-influenced. And so, yes, absolutely, we see countries graduating from foreign assistance over the last 20 or 30 years. South 

Korea is now a donor. Chile is about to become a donor. Brazil is 

about to become a donor. So these are examples. 

Not all countries are doomed to failure, but I do think it is very 

hard to go back home—when I come home for Thanksgiving, I talk 

to my parents around the dining table, who don’t follow foreign assistance and aren’t really that interested in it and are kind of skeptical about it. I think there are sort of four arguments that we have 

to make for why we have to be a participant in this. 

One is, this is about stable and growing markets. This is about 

who buys our goods and services. The second is national security. 

In many country contacts, we are fighting insurgents where we 

need our host country partners to demonstrate that they can provide public goods and services, and the MDBs play a crucial role 

in that. So places like Iraq and Afghanistan or places like Haiti, 

where we have failed governments, we are helping to prop them 

up, and these institutions stay longer than sometimes the American people have the stomach for staying. And so they are built to 

last. They are built to stay beyond our ability to stay or sort of help 

the local process, willing to let them stay. If we don’t do this, someone else will is the third argument. It is not as if we take our bat 

and ball and go home. There are other folks waiting in the wings 

to offer an alternate vision of globalization which isn’t one that is 

favorable to the United States of America. And then if we want to 

26 

be leaders of the free world, we have to pay to play, and if we don’t 

do this, this is a downpayment on American decline. 

Chairman MILLER OF CALIFORNIA. Mr. Huizenga, I would like to 

show you a testimony by the Admiral, sent by the Joint Chiefs of 

Staff, very informative, and that is the first time the Joint Chiefs 

have ever sent a witness to this committee. On national security 

issues that they have been really involved with and benefit from, 

it is very informative. 

I had expressed and apologize for mispronouncing your name, 

but I corrected it. 

Mr. HUIZENGA. That is all right, Mr. Chairman. 

Chairman MILLER OF CALIFORNIA. Mr. Green, you are recognized 

for 5 minutes. 

Mr. AL GREEN OF TEXAS. Thank you, Mr. Chairman, and thank 

you for allowing me to be a part of this hearing. I thank you and 

the ranking member because this has been very informative and I 

think very beneficial. 

I would like to thank all the witnesses for your testimony. I tried 

to follow it. I had to step away for a moment, so my question may 

be repetitive in that it has already been addressed, but I would like 

to speak for just a moment to you about the foreign markets for 

U.S. companies. I have intelligence indicating that half of the global growth is expected in developing countries, and that we are talking about $3 trillion in infrastructure spending. 

Would one of you kindly elaborate and give some indication as 

to how this will impact the ability of U.S. companies to do business 

and how that business will impact the U.S. economy? 

Mr. MURPHY. Thank you very much for that thoughtful question. 

Last year, over half of U.S. exports went to developing countries for 

the first time in a number of years. I think this is a reflection of 

the fact that you just pointed out, that developing countries are 

growing more rapidly than the developed markets. You see a situation where countries such as Brazil have literally tens of millions 

of people making a transition from a level of income where they are 

shopping in a local market to where they can go to a supermarket 

and buy processed goods. They can buy shampoo. They are joining 

a consumer culture to a degree that is raising their living standard, 

and these are markets where U.S. companies and their products, 

their goods and services, are very much in demand. 

What we at the U.S. Chamber hear from our members is an incredible level of interest in some of these large emerging markets 

such as Brazil and India, Indonesia, and very much so in Africa as 

well, and a number of African countries are graduating from being 

so-called frontier markets to countries that are growing, in some 

cases, by double digits, double-digit income growth, and at a time 

when demand is slack here in the United States, the housing crisis 

has kept the U.S. consumer in a, shall we say charitably, restrained mode, this is very welcome to American companies, and it 

is going to be crucial to our recovery. 

Mr. AL GREEN OF TEXAS. Thank you. Let me move to another 

area that is somewhat esoteric. I would like for you to address the 

currency of choice for the MDBs. Is it the American dollar? Is that 

the currency of choice, generally speaking? 

Mr. DEBEVOISE. Congressman, thank you for that question. 

27 

Mr. AL GREEN OF TEXAS. May I just share that the reason I ask 

is because many people are not aware of the currency challenges 

that are out there in terms of a desire to move into new currency. 

There is currencies of choice, ‘‘competition’’ is a better word with 

the euro, competition with the yuan. That is why I am asking, because I want to know how our currency is faring in terms of being 

promoted. The American dollar is important to the American economy as a currency of choice. 

Mr. DEBEVOISE. Thank you, Congressman Green. 

The answer to your question is that at the World Bank, the U.S. 

dollar is the currency of account, and all of the accounts are maintained in U.S. dollars in terms of the formal reporting, and most 

of the borrowing is hedged back into U.S. dollars. That portion 

which is not is because there might be a disbursement in some 

local currency, but for the most part, it is a dollar-oriented institution. 

Mr. AL GREEN OF TEXAS. And the second part of this question 

deals with our lack of voting privileges. Would that then put us in 

a position such that we cannot continue to influence our model as 

a currency of choice for the Bank? Do we lose something if we are 

not—I hate to use the terminology that has been used—but we are 

not playing by contributing, if I may say so? 

Mr. DEBEVOISE. Congressman Green, I think the question has 

been asked, and the influence of the United States is very important for maintaining something like that in the institution, in all 

the institutions, frankly. 

Mr. AL GREEN OF TEXAS. Finally, with the few seconds left, you 

mentioned the hard-loan window versus the soft-loan window, and 

for a neophyte, those are terms that I can draw some conclusions 

about. But could you just for a moment explain a little bit more 

about the hard loans versus the soft loans in terms of how they 

benefit countries? 

Mr. DEBEVOISE. What we are talking about is categories of countries. Countries with per capita GNI, gross national income, above 

approximately $1,300, borrow from the hard-loan window, and they 

pay interest at a roughly market rate. Countries with per capita 

GNIs below that level deal with the soft-loan window. In the case 

of the World Bank Group, that is called IDA. In the African development group, that is called the African Development Fund, and 

similarly in Asia. 

And the terms that they get are a mixture of outright grants and 

loans which— 

Mr. AL GREEN OF TEXAS. Let me interrupt you to say, I will ask 

you to explain it to me afterwards. We are over my time, and I am 

an interloper. Mr. Chairman, thank you. I will get my answer. 

Chairman MILLER OF CALIFORNIA. Thank you. I want to thank 

the panel. You have been excellent. Your testimony is very, very 

good. I want to thank Ambassador Green and Mr. Runde for their 

patience. They came for the last hearing, and they were here ready 

to go, but it was canceled at the last moment. So I thank you for 

coming back again today and giving us your time and all of your 

talents. 

Without objection, I submit the following for the record: a letter 

from the Bretton Woods Committee urging strong support for the 

28 

Administration’s request for general capital increases for the 

MDBs. The committee writes: ‘‘It is important to sustain global 

leadership and influence in the MDBs in order to promote U.S. national security interests and advance U.S. business opportunities 

abroad. Former Presidents George Bush, Jimmy Carter, honorary 

co-chairs of Bretton Wood Committee.’’ 

This letter is signed by 14 of the committee’s members including 

Nicholas Brady, Henry Kissinger, Lee Hamilton, Paul O’Neill, Jim 

Kolbe, and Brent Scowcroft. 

With that, the hearing is adjourned. The Chair notes that some 

members may have additional questions for the panel which they 

may wish to submit in writing. Without objection, the hearing 

record will remain open for 30 days for members to submit written 

questions to these witnesses and to place their responses in the 

record. 

This committee is adjourned. 

[Whereupon, at 3:57 p.m., the hearing was adjourned.] 

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