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REPORT TO CONGRESS FROM THE 

CHAIRMAN OF THE NATIONAL ADVISORY COUNCIL 

ON INTERNATIONAL MONETARY AND FINANCIAL POLICIES

A Report to Congress

consistent with

Section 1701 of the

International Financial Institutions Act, 

as amended by the Omnibus Appropriations Act, 1999

and

Section 9006 of the

Consolidated Appropriations Act, 2016

United States Department of the Treasury

June 2018
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INTRODUCTION1

To support our national interests and promote global growth, the United States continues to play 

an active role in the policies and lending of the international financial institutions (IFIs). The 

IFIs further U.S. and global security interests and encourage open markets and financial stability. 

The IFIs help to fight poverty, support robust global growth, enhance food security, and respond 

to emerging crises and emergency situations, including natural disasters, pandemics, and the 

protracted displacement of refugees. 

U.S. leadership was instrumental in founding and designing most of these institutions, and the 

United States remains the largest or joint largest shareholder in them – except in the African 

Development Bank, where the United States is the most significant non-African shareholder. 

The United States uses its shareholding, voice on the governing bodies, and convening power to 

proactively shape IFI policies and activities in support of U.S. national security, economic 

interests, and values.

The United States seeks to maintain its leadership position in the IFIs with the goal of building 

vehicles for supporting U.S. interests and responding to U.S. calls for reform. Throughout 2017, 

the United States promoted policy reforms across the IFIs to improve their governance, focus 

them on the core mission of higher median income, make better use of their financial resources, 

and improve their efficiency while maintaining high fiduciary, social, and environmental 

standards. 

This report covers the period from January 2017 through January 2018 and looks at prospects 

for the remainder of 2018 for the International Monetary Fund (IMF) and the multilateral 

development banks (MDBs), including the World Bank, African Development Bank, Asian 

Development Bank, European Bank for Reconstruction and Development, Inter-American 

Development Bank, International Fund for Agricultural Development, and North American 

Development Bank. It also includes the Report to Congress on the International Development 

Association’s Contributions to Graduation.

INTERNATIONAL MONETARY FUND (IMF)

The IMF has been operating within an improving global economic context, with more robust 

global growth and high availability of private capital. To this end, U.S. engagement with the 

IMF has emphasized the importance of delivering on its core mandate. The United States has 

 1 Section 1701 of the International Financial Institutions Act, as amended by section 583 of the Omnibus

Consolidated and Emergency Supplemental Appropriations Act, 1999 (P.L. 105-277), requires the 

Chairman of the National Advisory Council on International Monetary and Financial Policies (the Secretary of the

Treasury, as designated pursuant to Executive Order 11269 of February 14, 1966, as amended) to report

annually to Congress on the participation of the United States in the international financial institutions (IFIs). 

Section 9006 of the 2016 Consoldiated Appropriations Act, 2016 (P.L 114-113) requires the Secretary of the 

Treasury to report annually on changes in the IMF’s lending, surveillance, and technical assistance policies. 

22 USC 262r-6(b)(2) directs the Secretary of the Treasury to report to Congress on how the World Bank’s 

International Development Association-financed projects contribute to the eventual graduation of countries from 

concessional financial assistance.
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pressed for the IMF lending programs to focus on reforms that will boost real median incomes 

and promote more sustainable, private-sector led growth. The United States continues to press

the IMF to more forcefully advocate policies to reduce global imbalances and enhance external 

stability. As with any public institution, the IMF should continue to evaluate ways to enhance 

the efficiency and effectiveness of its operations and maintain budget discipline. 

Major Issues Affecting U.S. Participation in the IMF

The United States plays a key role in shaping IMF policy and institutional issues through its role 

as the IMF’s largest shareholder, and has participated in the IMF financially through a quota 

subscription2 and a contribution to the IMF’s primary financial backstop, the New Arrangements 

to Borrow (NAB). The IMF’s fifteenth general review of its overall quota resources is scheduled 

to conclude by the 2019 IMF-World Bank Spring Meetings in April and no later than the Annual 

Meetings in October 2019. As part of this review, the IMF Executive Board will examine the 

adequacy of the IMF’s current resources and will determine whether adjustments should be made 

to the formula used to determine members’ quota shares. Treasury will work with IMF 

management and other shareholders to achieve a satisfactory outcome for the U.S. in the 

fifteenth review. 

The NAB, which entered into effect in 1998, is a set of standing borrowing arrangements with 38 

financially strong members, including the United States. It provides an important supplement to 

the IMF’s core quota resources in times of global stress. In November 2016, the IMF’s 

Executive Board approved the renewal of the NAB for another five years starting in November 

2017. Due to its voting share of 16.5 percent, the United States is the only IMF member country 

with the ability to veto major institutional decisions, including activation of the NAB. 

Congressional authorization for U.S. participation in the NAB expires in December 2022, unless 

renewed. 

IMF Financing and Policy Developments in 2017

The IMF plays an important role in safeguarding the international financial system and 

promoting financial stability through its principal activities of surveillance, financing, and 

technical assistance. The IMF’s bilateral and multilateral surveillance is aimed at encouraging 

policies that contribute to global growth and financial stability and discouraging policies that are 

not sustainable or have harmful spillover effects on other countries. As part of the global 

financial safety net, IMF financing plays an important role in supporting the global economy –

and the prosperity of American workers, households, and businesses – during the destabilizing 

effects of crises abroad. The IMF complements its financing with expert analysis and technical 

advice, and helps governments build capacity to manage their activities more effectively. 

At the end of 2017, the IMF had 18 financing arrangements in place using its general resources 

for a total of $151 billion, including two precautionary arrangements totaling $104 billion. New 

 2 Quotas are the metric used by the IMF to assign voting rights, to determine contributions to the IMF’s general 

resources and to determine access to IMF financing.
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financing arrangements executed during 2017 include Gabon, Georgia, and Mongolia. The IMF

also renewed its precautionary arrangement with the government of Mexico. As of January 

2018, Ukraine was the only country with an exceptional access program.

3

 (In June 2018, the 

IMF approved an exceptional access program for Argentina.) For additional information on 

exceptional access programs, please see Annex on IMF Exceptional Access Programs. 

With regard to the IMF’s concessional resources for low-income countries, at the end of 2017 the 

IMF had 20 financing arrangements in place for a total of $5.1 billion. During 2017, the IMF 

agreed on new concessional financing arrangements with Benin, Cameroon, Chad, Guinea, 

Mauritania, Niger, Sierra Leone, and Togo. 

The IMF employs approximately 2,700 people and has an annual administrative budget of $1.1 

billion. With consistent pressure from the United States, the IMF has maintained a flat real 

administrative budget for the past 7 years. The IMF has also proposed a flat real budget for the 

next two years, based on continued reprioritization and increased efficiency.

The IMF reviewed and reformed a number of key policies during 2017 in the areas of lending 

and surveillance:

• Review of the Adequacy of the Global Financial Safety Net. During 2017, the IMF 

reviewed the adequacy of the Global Financial Safety Net, which is composed of the IMF 

and the multilateral development banks (at the global level), Regional Financing 

Arrangements (at the regional level), central bank currency swap arrangements (bilateral 

level), and foreign exchange reserves (individual country level). Specifically, the IMF 

reviewed its Flexible Credit Line and Precautionary Liquidity Line facilities and 

enhanced their qualification criteria and framework to ensure greater transparency. In 

July 2017, the IMF created a new Policy Coordination Instrument (PCI), which is a nonfinancing tool that enables members to signal commitment to reforms and catalyze 

financing from other sources. The PCI is available to all members that can satisfy the 

policy requirements, including the ability to meet upper credit tranche conditionality, the 

absence of the need for Fund financing at the time of the PCI approval, and no overdue 

General Resource Account or Poverty Reduction and Growth Trust obligations. Because 

the PCI enables a close policy dialogue between the IMF and a member country, it can

help countries formulate and implement a macroeconomic policy agenda to prevent 

crises, enhance macroeconomic stability, and address macroeconomic imbalances, 

without tapping into IMF resources. Finally, the IMF strengthened the framework for its

coordination with Regional Financing Arrangements (RFAs) by developing principles for 

coordination, agreeing to conduct additional joint test runs with RFAs, and establishing a 

forum for regular dialogue between the IMF and RFAs.

• Low Income Countries Debt Sustainability Framework. The joint IMF-World Bank Low 

Income Countries Debt Sustainability Framework (LIC-DSF) has played an important 

role in promoting sound debt management practices and avoiding unsustainable build-up 

 3 Under normal access limits, total program financing is limited to no more than 435 percent of quota, and 

disbursements in any one year may not exceed 145 percent of quota. Financing amounts that exceed normal IMF 

lending limits are referred to as “exceptional access” programs.
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of debt in low income countries since 2005. The IMF Executive Board approved several 

technical changes to the LIC-DSF in 2017, responding to developments such as rising 

debt loads and debt service in LICs, increased non-concessional lending, and greater 

market access. For countries where debt is determined to be at “moderate” risk of debt 

distress, the new framework will provide a secondary assessment of their capacity to 

absorb shocks, to help evaluate their potential for slipping into the “high” risk category.

• Programs in Currency Unions. In February 2018, the IMF Executive Board formalized a 

set of guidelines for policy assurances the IMF will now require from currency unionlevel institutions when their cooperation is critical to the success of a program. These 

will be limited to actions affecting the specific member’s adjustment program, but may 

involve adjustments in union-wide policy that affect all currency union members if a 

union-wide policy contributed to the balance of payments problem affecting the program 

country, or a critical mass of the member countries are facing balance of payments 

problems. The assurances will be voluntary, endorsed by the Board, and published as 

part of the program documents. The United States had long advocated this change as 

monetary and financial sector policy are macro-critical and often necessary for program 

success, whether or not a country has outsourced those functions to a regional institution.

• External Sector Report. In July 2017, the IMF discussed the annual External Sector 

Report (ESR), which analyzes global external developments and provides IMF staff 

assessments of 28 of the world’s largest economies’ external positions, including current 

account balances, real exchange rates, external balance sheets, capital flows, and 

international reserves. The 2017 report included a discussion of persistent current 

account surpluses. The United States pushed for more symmetric policy advice between 

surplus and deficit countries to construct a global adjustment process that works more 

effectively to prevent the build-up of excessive imbalances and uneven global 

demand. In 2018, IMF staff plan to enhance their methodology for assessing external 

balances.

• Focus on Governance and Corruption. In April 2018, the IMF adopted a new 

Framework for Enhanced IMF Engagement in Addressing Governance Vulnerabilities. 

Staff designed the framework in response to Board pressure, in particular from the United 

States, for more direct and consistent engagement on governance and corruption issues, 

particularly in countries where these problems hamper private sector development and 

growth. Through the framework we expect the IMF to apply a more consistent focus on 

governance and corruption issues in surveillance, programs, and technical assistance. 

• Capital Flows and Macroprudential Measures. In June 2017, the IMF published a policy 

paper describing the benefits and risks from capital flows and the role of macroprudential 

measures in increasing resilience to volatile capital flows. It outlined the IMF’s approach 

for classifying measures as capital flow measures, macroprudential measures, or joint 

capital flow/macroprudential measures in order to ensure consistent, well-tailored advice 

across jurisdictions. The IMF determines a measure’s classification based on several

factors, including its intent to limit capital flows, the design of the measure, and country-
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specific circumstances. Moreover, the paper stressed that neither capital flow measures 

nor macroprudential measures should substitute for warranted macro adjustment. 

• Technical Assistance. At the urging of the U.S. Executive Director, the IMF began 

providing additional capacity development assistance for Anti-Money 

Laundering/Countering the Finance of Terrorism (AML/CFT). In 2018, the IMF 

Executive Board will formally review the IMF’s capacity development programs and 

policies and the role of the IMF on AML/CFT issues.

IMF Priorities in 2018

The United States has engaged with the IMF on a number of key policy priorities for 2018, 

including:

• Review of Facilities for Low Income Countries. In November 2017, the IMF began a 

comprehensive review of the facilities available for low income countries (LICs). Staff 

will first conduct a stocktaking of usage patterns, demand, and policies, including a 

comparison of Poverty Reduction and Growth Trust policies with General Resources 

Account policies. That analysis will inform discussion of possible refinements to access 

policies and financing terms, precautionary support availability, support for noneconomic shocks and fragile states, non-financial program structure, and areas for 

simplification of procedures. The IMF staff will recommend policy adjustments in late 

2018 for consideration by the Executive Board.

• IMF Conditionality Review. In May 2018, the IMF began a periodic review of program 

conditionality. IMF staff intend to review all aspects of program design including 

program length, performance criteria, structural benchmarks, staff forecasts, and program 

outcomes – with the goal of improving design ahead of a future crisis. The United States 

is engaging with staff to press for reforms to enhance the effectiveness of conditionality

in promoting growth, market liberalization and higher median income. 

• Debt Transparency and Sustainability. The IMF and the World Bank are jointly 

developing a multi-pronged work program to tackle rising debt levels in low-income 

countries. This work program will highlight growing debt vulnerabilities, tackle 

shortcomings in debt data coverage and transparency, and address challenges from the 

changing creditor landscape. 

• Capacity Development Review. In 2018, the IMF will undertake a Capacity Development 

Review. Capacity development, which includes technical assistance and training, is a 

core IMF function. Through the review, the IMF hopes to increase capacity development 

impact and efficiency, and improve integration of capacity development and surveillance 

activities. 
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Conclusion

The IMF has taken steps over the past year that aim to safeguard IMF resources and modernize 

program access. Adjustments to the qualification criteria and framework for precautionary 

lending help to protect the IMF from incurring losses and protect the United States’ financial 

commitment to the IMF. Other activities, such as the External Sector Report, are aimed at 

promoting sound policies among member countries and thereby safeguarding IMF resources. 

MULTILATERAL DEVELOPMENT BANKS (MDBS)

This section addresses key U.S. policy goals advanced by the MDBs and details developments in 

institutional reforms, priorities, performance, and effectiveness at the MDBs since the previous 

NAC Report was issued. 

U.S. participation in the MDBs can: (1) foster U.S. national security by supporting MDB 

engagement with fragile and conflict-affected states (e.g., Ukraine, Iraq, and Afghanistan) and 

providing assistance that addresses the root causes of instability; (2) promote U.S. economic 

growth through exports by helping the MDBs boost growth in emerging markets; (3) help 

respond to global crises, such as the refugee crisis in the Middle East and North Africa and 

natural disasters, and build countries’ resilience to future crises; and (4) address global priorities, 

such as energy security, food security, and environmental degradation.

The MDBs seek to support broad-based and robust economic growth and job creation through 

investments in areas such as infrastructure, health, and education. They also encourage private 

sector development and entrepreneurship. MDB concessional lending and grants are an 

important source of financing for the development needs of fragile and post-conflict states and 

for combating extreme poverty and hunger. MDB projects can promote global stability, 

prosperity, infrastructure development, good governance, and private sector growth.

The United States is the largest or joint largest shareholder at all of the MDBs in which it is a 

member, except the African Development Bank, where the United States is the largest nonAfrican shareholder. This status allows the United States to press MDB management for 

institutional reforms, financial and political support for major U.S. priorities, and higher 

standards in the international financial architecture. U.S. contributions to the MDBs leverage 

additional contributions from other shareholders and the MDBs themselves, providing a level of 

assistance that is significantly higher than what the United States could achieve bilaterally.

Over the past year, the United States worked to improve performance by driving reforms across 

all of the MDBs. These efforts included urging the MDBs to make better use of their existing 

financial resources and to better focus their support on poorer countries with less access to 

private capital. In addition, we advocated for the MDBs to implement better frameworks to 

ensure financial discipline, and we are working closely with the MDBs to update policies and 

practices on evaluation to build a stronger culture of results and accountability. 

The United States also continued to encourage stronger attention to fiduciary, environmental, and 

social standards, and to the necessary resourcing to implement these safeguards so that MDBs set 
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the standard for high quality projects. This increases the likelihood of project success, positions 

U.S. companies and contractors well to compete, and creates an attractive alternative to the lower 

standards offered by competing institutions. As the United States carries out its duties to review, 

comment, and vote on MDB projects, it applies relevant legislative mandates and requirements 

from Congress. Treasury looks forward to engaging with Congress on how to ensure all 

mandates advance U.S. national interests and ensure U.S. leadership in the MDBs. 

Below are the major developments for the World Bank, African Development Bank, Asian 

Development Bank, European Bank for Reconstruction and Development, Inter-American 

Development Bank, International Fund for Agricultural Development, and North American 

Development Bank. 

World Bank

Performance in 2017: During the World Bank’s fiscal year 2017 (covering July 2016 to June 

2017), the World Bank committed $61.7 billion in loans, technical assistance, concessional 

credits, grants, equity investments, and guarantees. 

• The International Bank for Reconstruction and Development (IBRD) approved $22.6 

billion in loans and technical assistance to middle-income countries (i.e. countries with 

per capita gross national income above $1,165 for the fiscal year 2018). Latin America 

and the Caribbean (23 percent) and Middle East and North Africa (21 percent) received 

the largest portion of the IBRD’s new commitments, followed by Europe and Central 

Asia (20 percent) and East Asia and Pacific (19 percent). 

• The International Development Association (IDA) approved $19.4 billion in highly 

concessional credits and grants to the 75 poorest countries. More than half of IDA’s 

annual commitments ($10.6 billion) went to countries in Sub-Saharan Africa, followed 

by South Asia (19 percent) and East Asia and Pacific (13 percent). 

• The International Finance Corporation (IFC), the private sector arm of the World Bank, 

approved $11.9 billion in long-term investments from its own resources. The IFC 

mobilized an additional $7.5 billion from other investors for development

projects. Roughly 24 percent of the IFC’s projects, accounting for $4.6 billion in longterm investments, went to the world’s poorest countries. 

• The Multilateral Investment Guarantee Agency (MIGA) provided a record $4.8 billion in 

guarantees for political risk insurance and credit enhancement. Of MIGA’s FY 2017

projects, 45 percent were in the poorest countries, with 21 percent of new guarantees 

supporting fragile and conflict-affected countries. 

• For IBRD and IDA, public administration, law, and justice (15 percent) and energy and 

mining (15 percent) were the two sectors that received the largest commitments. 

Key Institutional Reforms: In 2017, the World Bank implemented several key initiatives, in 

addition to carrying out its regular lending activities. 
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• World Bank Capital Review. The World Bank began a review of its capital adequacy and 

financial capacity to support development priorities, with the aim of having shareholders 

decide on a reform and capital package in 2018. The World Bank examined reforms 

related to financial discipline and shifting resources to poorer countries.

• The Accountability Agenda and the Implementation of the Environmental and Social 

Framework. The World Bank’s environmental and social safeguards are an essential tool 

for avoiding or mitigating risks and impacts in World Bank-financed projects. In 2016, 

the World Bank approved a new set of safeguards, the Environmental and Social 

Framework, in order to increase the efficiency and effectiveness of safeguards through 

updated policies and improved implementation. The new framework expands the World 

Bank’s safeguards into several new important areas and strengthens its approach to social 

assessments. The World Bank has been working to develop guidance notes for World 

Bank staff and government officials in client countries as it prepares to begin using the 

new policies beginning in 2018. 

 

• Women Entrepreneurs Finance Initiative (We-Fi). The World Bank launched a new 

facility dedicated to expanding access to financial services for women entrepreneurs and 

women-led small and medium enterprises (SMEs) in developing countries. The multidonor facility currently has $348 million in donor commitments provided by 14 

countries, including the United States. The World Bank serves as Trustee and Secretariat 

of the facility and projects are implemented by the World Bank and other MDBs. The 

facility incorporates many of the principles of the World Bank’s Gender Equality 

Strategy, which was approved in 2015, and aims to reduce disparities in access to 

professional opportunities and ownership of assets and increase women’s voice and 

agency. The We-Fi governing committee, chaired by the United States, recently 

approved the first round of proposals for $120 million in funding. This initial round of 

grant allocations is expected to mobilize over $1.6 billion in additional funding, 

exceeding the original target for the entire facility of mobilizing $1 billion over five 

years.

• IDA-18 Replenishment. In 2016, IDA donors and Management negotiated the IDA-18 

replenishment, which covers the period from July 2017 to June 2020. To implement 

commitments made for IDA-18, IDA Management has begun to double resources for 

fragile and conflict-affected (FCV) states (including increasing staffing in FCV 

countries), determine the countries eligible for a $2 billion set-aside for projects that 

benefit refugees and their host communities in IDA countries, and prepare its first 

issuance of debt backed by its equity (e.g., reflows and investments). The ability to 

borrow from the market will increase IDA’s overall commitment authority by more than 

40 percent to approximately $75 billion at the same or lower cost to donors. 

• “IFC 3.0” Strategic Approach. IFC launched a new strategic approach that seeks to 

develop and expand private markets, with an increased focus on low-income countries 

and fragile and conflict-affected states. Under its new strategy, IFC will conduct more 

sophisticated diagnostics to identify obstacles to private investment, and collaborate more 

closely with the World Bank to address these obstacles. Other elements of the strategy 
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include ramping up the mobilization of third party private sector resources, improving 

development impact, and increasing support to IDA countries via de-risking, such as 

through the recently established IFC-MIGA Private Sector Window in IDA.

2018 Priorities: The United States has been engaged with World Bank Group management and 

shareholders to improve the development effectiveness and ensure the long-term financial 

discipline of the World Bank Group in the context of negotiations for an increase in shareholder 

capital at the IBRD and the IFC (the United States does not plan to contribute to any IFC capital 

increase). In April 2018, the World Bank Board of Governors welcomed a series of 

transformational reforms that reflect U.S. priorities. Treasury will be engaging with others in the 

Administration and with Congress to discuss the merits of the proposed package. Should the 

United States and other shareholders ultimately approve the proposed capital and reform 

package, Treasury’s priority will be to ensure that the IBRD implements the following reforms in 

a timely manner:

• Establish a sustainable annual lending level for each year and a crisis buffer to be used in 

response to extraordinary, large crises. This will help constrain growth in IBRD lending 

levels and limit future requests for additional shareholder capital;

• Introduce an allocation framework that shifts more IBRD resources toward poorer, less 

creditworthy borrowers that have less access to other sources of finance;

• Apply increased loan prices to wealthier, more creditworthy borrowing countries; 

• Instill stronger restraint on World Bank staff compensation; and

• Apply the IBRD’s graduation policy more meaningfully.

Other key U.S. priorities for 2018 are: (1) continuing to advocate for our national security 

strategic priorities, including support for fragile and conflict affected states; (2) overseeing the 

application of the IFC’s cascade approach and commitments of greater engagement in lowincome countries; (3) reviewing the prudent implementation of policy commitments made in the 

current IDA replenishment period, including the IFC-MIGA Private Sector Window and the 

IDA-18 special development themes, with a mid-term review of IDA-18 in November; (4) 

ensuring the implementation of high-quality environmental and social safeguards through robust 

and substantive guidance notes; and (5) modernizing the independent accountability mechanism 

for the World Bank to ensure that communities have a strong voice if the World Bank does not 

follow its own rules and causes harm.

African Development Bank (AfDB)

Performance in 2017:

• AfDB financing approvals totaled $8.4 billion. Approvals from the AfDB’s nonconcessional window were $6.4 billion. Approvals from the concessional window, the 

African Development Fund (AfDF), were $2.0 billion. 
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• Of the total AfDB non-concessional window approvals, sovereign loans and grants 

accounted for $4.0 billion (62 percent) and private sector loans, investments, and 

guarantees accounted for $2.5 billion (38 percent). Over forty percent of new AfDB

financing was for infrastructure projects (primarily transportation, energy, and water 

supply and sanitation). Other key sectors include finance (e.g., microcredits to small 

businesses) and agriculture. 

• Distribution of total AfDB approvals by sub-region: West Africa (20 percent); Central 

Africa (18 percent); East Africa (17 percent); North Africa (15 percent); Southern Africa 

(15 percent); and multiple sub-regions (15 percent). 

• The AfDB provided financing to strengthen governance, create jobs, and develop a robust 

private sector in U.S. strategic priority countries in Africa, supporting stability and 

helping address the root causes of humanitarian crises and migration flows. This 

included $1.1 billion in financing to Tunisia, Morocco, and Egypt in North Africa, and 

$1.3 billion in financing to fragile and conflict-affected states. 

Key Institutional Reforms: The AfDB is currently working to implement a set of institutional 

reforms designed to improve its efficiency and effectiveness. This reform agenda has three 

components: (1) realigning the Bank’s organizational structure around its five strategic priorities 

(energy, agriculture, industrialization, regional integration, and quality of life); (2) decentralizing 

staff and business operations to the field to improve project coordination and oversight; and (3) 

streamlining institutional policies and processes and placing an increased emphasis on results. 

The AfDB has made limited progress implementing the reforms, including instituting a new 

organizational structure and developing a new institutional results management framework, 

which includes approximately 100 indicators measuring development impact (e.g., jobs created) 

and institutional performance (e.g., efficiency ratios). The United States is working closely with 

AfDB Management on reform implementation, with particular attention to ensuring robust 

institutional oversight and accountability mechanisms. 

2018 Priorities: Key U.S. priorities for the AfDB in 2018 include: (1) supporting effective 

implementation of critical elements of the Bank’s reform agenda, including improved 

implementation of audit and evaluation recommendations and strengthening project quality; (2) 

promoting financial sustainability through highly selective lending, with a particular focus on 

infrastructure; (3) identifying an initial set of priorities for AfDB capital negotiations, which may 

commence in late 2018; (4) overseeing delivery of resources under the fourteenth replenishment 

of the African Development Fund (AfDF-14) through the upcoming mid-term review in late 

2018; (5) enhancing collaboration between the AfDB and U.S. agencies such as USAID and 

MCC; and (6) encouraging the AfDB to continue building its capacity to promote African private 

sector growth.
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Asian Development Bank (AsDB)

Performance in 2017:

• Total AsDB financing approvals were $19.1 billion. Sovereign approvals from AsDB’s 

non-concessional Ordinary Capital Resources (OCR) were $13.6 billion. Approvals for 

non-sovereign loans, guarantees, and investments totaled $3.2 billion. Approvals for 

grants, concessional loans, and technical assistance from the Asian Development Fund 

(AsDF) and concessional OCR totaled $2.3 billion.

• Top recipients of AsDB funding were China (14 percent), India (14 percent), Pakistan 

(11 percent), Bangladesh (10 percent), and Indonesia (10 percent).

• The AsDB’s 2017 approvals largely focused on infrastructure, particularly for energy and 

transport (55 percent). The remaining approvals included financing for financial sector 

development (14 percent), water and urban infrastructure (9 percent), public sector 

management (6 percent), agriculture (5 percent), and education (4 percent).

• The AsDB provided notable support in the following areas: $1.7 billion supporting water 

projects like water supply, sanitation, irrigation, and flood management throughout Asia; 

$150 million to enhance the capacity and efficiency of Nepal’s power distribution and 

transmission networks; and $330 million to support the completion of Afghanistan’s 

national ring roads, which will create jobs and boost trade.

Key Institutional Reforms: The United States focused on several areas of institutional reform at 

the AsDB in 2017. The U.S. closely monitored AsDB’s capital adequacy models to ensure that 

the ramp-up in assistance as a result of the merger of the OCR and AsDF lending resources will 

remain financially sustainable. In particular, the United States has focused on ensuring that 

AsDB’s lending levels remain in line with the projections that AsDB Management presented to 

shareholders at the time the merger was approved. 

The AsDB also undertook significant procurement reform to include the addition of “quality” 

and “value for money” as procurement principles, as well as explicit support for the procurement 

of high-level technologies. This will help ensure that developing member countries receive highquality products and services while improving the longevity of projects. Firms that provide a 

level of quality and innovation, such as those from the United States, voiced strong approval for 

these changes. AsDB’s procurement reforms are also designed to streamline internal 

bureaucratic processes to accelerate project implementation. 

Reforms in the areas of recruitment, staff mobility, performance management, and gender 

equality continued in 2017. Recruitment and mobility efforts centered on increasing flexibility 

in existing processes to streamline recruitment and broadened existing staff’s skills, experiences, 

and opportunities. AsDB undertook several actions to improve institutional gender equality, 

particularly among international staff, including the creation of a Respectful Workplace Unit, 

increased workplace flexibility and work-from-home programs, and the initiation of a salary 

study to assess if any institutional pay gaps between men and women exist at AsDB.
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2018 Priorities: Key U.S. priorities for the AsDB in 2018 include: (1) shaping the development 

and approval of Strategy 2030, which we anticipate will be finalized later this year; (2) 

promoting adoption of reforms to loan pricing and resource allocation to boost AsDB’s focus on 

supporting countries with less access to other sources of finance; (3) deepening institutional 

capacity to ensure that AsDB can effectively utilize its greater financial capacity following the 

merger of OCR and AsDF lending resources; (4) continuing to ensure that lending volumes do 

not outstrip the projections that Management provided when shareholders approved the merger; 

(5) tracking implementation of the commitments from the Asian Development Fund’s latest 

replenishment (AsDF-12), including strengthening the approach to fragile states and small island 

countries and setting aside resources to assist countries with disaster risk management; and (6) 

undertaking human resources reforms to boost staff morale, strengthen merit-based hiring and 

promotion, build private sector expertise, and attract and retain more female staff.

European Bank for Reconstruction and Development (EBRD)

Performance in 2017:

• EBRD investments in 2017 reached $11.6 billion. 

• The top recipients of investments were Turkey (16 percent), Egypt (15 percent), Ukraine 

(8 percent), Poland (7 percent), and Greece (6 percent). The EBRD also continued to 

increase investments in the early (less advanced) transition countries (ETCs), such as 

Armenia, Georgia, and Moldova. EBRD business volume for the ETCs reached $1.7 

billion in 2017, representing a 75 percent increase from 2016. 

• EBRD business volume in 2017 was concentrated in the following sectors: financial 

institutions (30 percent), infrastructure (25 percent), industry, commerce, and 

agribusiness (23 percent), and energy (21 percent).

• The EBRD provided notable support in the following areas: more than $880 million in 

commitments for Ukraine to support the government’s reform efforts; more than $2.6 

billion in investments to support transition in Jordan, Egypt, Morocco, and Tunisia; and 

continued assistance to Jordan and Turkey to address the Syrian refugee crisis. 

• In response to strong guidance from the United States and other key shareholders, EBRD 

management has not brought forward any new projects for Russia since July 2014. 

Key Institutional Reforms: In 2017 the United States and other shareholders approved a new 

Economic Inclusion Strategy for the EBRD, focused on its private sector-based model that 

combines investments and policy activities to advance economic inclusion and increase 

opportunities for women and girls, young labor market entrants, and populations in less 

advanced regions. The Board of Directors approved a new EBRD Extractive Mining Industries 

Strategy, which emphasizes the importance of transparency of contracts and licenses, and 

adherence to the EBRD’s Environmental and Social Policy. In 2017 EBRD Governors approved 

Lebanon as a new recipient country. The EBRD also continued implementation of its 
14

Operational Effectiveness and Efficiency program to improve internal processes and reduce 

costs. 

2018 Priorities: Key U.S. priorities for the EBRD in 2018 include: (1) helping the EBRD 

develop a workable graduation framework for countries that are advanced in their transitions to 

sustainable market economies; (2) pushing EBRD Management to strengthen measures around 

the EBRD’s cost/income ratio, making use of the full range of measures, including limiting 

growth in staff compensation, to control costs; (3) ensuring that U.S. objectives are incorporated 

in the 2018 review of the EBRD’s energy strategy; (4) pursuing strong U.S. governance 

objectives in the preliminary work undertaken in 2018, for decision in 2019, on reviews of the 

EBRD’s Environmental and Social Policy, Public Complaint Mechanism, and Public 

Information Policy; (5) providing continued assistance to Ukraine in support of its reform 

efforts; and (6) continuing support for refugee populations and host communities in Jordan, 

Lebanon, and Turkey.

Inter-American Development Bank (IDB)

Performance in 2017: 

• The IDB approved $11.4 billion in loans and grants in 2017 to its 26 borrowing member 

countries in Latin American and the Caribbean. 

• IDB Invest, the arm of the IDB Group that solely focuses on the private sector, originated 

$3.2 billion in loans and equity investments in 2017.4 The investments were 

concentrated in the following areas: infrastructure (36 percent), trade finance (23 

percent), and financial institutions (22 percent). Almost a quarter of the investments 

went to the region’s small and vulnerable countries. 

• The Multilateral Investment Fund (MIF) approved $85 million in grants, loans, and 

equity to strengthen the business environment and benefit poor and low income 

populations by working directly with businesses, farms, households, non-governmental 

organizations, and public sector partners.

• Top recipients of IDB lending in 2017 were Argentina (18 percent), Mexico (17 percent), 

Brazil (17 percent), and Colombia (9 percent). Small and vulnerable borrowing countries 

received 34 percent of new loan approvals.

• IDB lending was spread across many sectors, with the largest amounts going to 

infrastructure and energy (38 percent), reform/modernization of the state (17 percent), 

financial markets development (10 percent), and social sector (8 percent). 

• The IDB provided notable support in the following areas: $423 million in approvals for 

the Northern Triangle countries (El Salvador, Guatemala, and Honduras), coupled with 

 4 Of this $3.2 billion, $1.1 billion was financed by IDB Invest’s balance sheet and $2.1 billion financed by the IDB’s 

balance sheet. IDB Invest originates and manages all IDB Group private sector investments; however, some of 

these investments are currently financed by the IDB’s balance sheet during a transition period running through 2022.
15

advice for the governments on the design of reform programs to address the root causes 

of migration; $285 million in approvals to Jamaica to help it rationalize public spending, 

improve homicide investigations, provide government identification, and use energy 

more efficiently; and $128 million in approvals to support economic growth and poverty 

reduction in Haiti, including a $65 million project to enhance water and sanitation 

services. The IDB also partnered with the Caribbean Development Bank to help the 

region recover from Hurricanes Irma and Maria. 

Key Institutional Reforms: The merger of the IDB’s concessional window (the FSO) with its 

ordinary capital took effect at the beginning of 2017. The merger has enhanced the IDB’s ability 

to provide concessional lending to the region’s poorest countries while substantially 

strengthening its key capital adequacy ratios. This should allow the IDB to remain financially 

sustainable in the years ahead.

In 2017, IDB Invest and the MIF executed significant institutional reforms to improve efficiency 

and impact. In 2016, the IDB Group’s private sector operations were consolidated under IDB 

Invest, and IDB Invest initiated a significant reform agenda. IDB Invest advanced 

implementation of these reforms in 2017 – including further expanding its field presence and 

introducing new tools to enhance selectivity and a new risk management framework – and was 

able to increase investments by almost 50 percent and double mobilization of private finance 

from 2016. In 2017, donors agreed to the third replenishment of the MIF, providing resources 

for 2019-2023. The U.S. did not participate in the replenishment. Critically, the region’s 

borrowing countries will provide more than half of the resources for the MIF replenishment. 

Concurrently, the MIF commenced a substantial restructuring to streamline activities, operations 

and staffing, which allowed it to reduce its 2018 operating budget by 14 percent. 

2018 Priorities: Key U.S. priorities for the IDB include: (1) continuing to enhance and refine the 

IDB’s approach to facilitate private sector growth and catalyze private investment in the region, 

including infrastructure investment; (2) overseeing implementation of the remaining elements of 

IDB Invest’s reform agenda; (3) collaborating closely with the IDB and other partners to support 

reforms and deliver assistance in the Northern Triangle countries of Guatemala, Honduras, and 

El Salvador; and (4) taking the opportunity provided by a new director for the IDB’s independent 

evaluation office (OVE) to further strengthen the role of evaluation and learning at the IDB.

International Fund for Agricultural Development (IFAD) 

Performance in 2017: 

• In 2017, IFAD approved $1.25 billion for new projects and $51 million for grants under 

IFAD’s global, regional, and country grant program. 

• The regional distribution of IFAD approvals in 2017 was: Asia and the Pacific (36 percent); 

Eastern and Southern Africa (21 percent); Western and Central Africa (15.2 percent); Latin 

America and the Caribbean (6.6 percent); and Near East, North Africa, and Europe (21.2 

percent). 
16

• IFAD’s ongoing portfolio covered a range of sectors at end-2017, including agriculture and 

natural resource management (33 percent of IFAD financing), market and related 

infrastructure (16 percent), rural financial services (13 percent), community-driven and 

human development (10 percent), policy and institutional support (8 percent), and support for 

small and micro enterprises (8 percent). A variety of other efforts, including disaster 

mitigation and monitoring and evaluation, accounted for about 13 percent of IFAD funding.

Key Institutional Reforms: IFAD’s new president—Gilbert Houngbo, the former Prime Minister

of Togo—assumed office in April, 2017, and has taken positive steps to enhance IFAD’s 

efficiency and impact. In particular, a new “Operational Excellence” (OpEx) initiative aims to 

prepare IFAD for more effective delivery of a larger work program. Through the OpEx, IFAD 

will accelerate its decentralization of operations to the field, and implement new processes to 

shorten project delivery time, speed up disbursements, and improve overall results. IFAD 

anticipates that the OpEx reforms will enhance IFAD’s value for money proposition so as to 

maximize the impact of each dollar spent and/or invested.

IFAD’s membership conducted consultations for the IFAD-11 replenishment over the course of 

2017, and concluded negotiations in December 2017. Management committed that IFAD will 

allocate 90 percent of its core resources to low income and lower-middle income countries 

during the IFAD-11 period (2019-2021), which was a U.S. priority. Members and management 

will also work to develop a transition framework that will delineate how IFAD will tailor its 

support to different countries based on their income levels and specific conditions. Finally, 

IFAD will continue to explore the feasibility and tradeoffs of potentially borrowing from the 

market in the future, but IFAD will not borrow from the market during the IFAD-11 period.

In its 2017 report, IFAD’s Office of Independent Evaluation (IOE) highlighted solid project 

performance along with some areas for improvement. The IOE noted that IFAD’s performance

has shown a positive trend since 2009, although overall performance has begun to plateau. Still, 

IFAD’s project performance in all regions continues to be comparable to that of the agricultural 

sector portfolio of the World Bank even though IFAD tends to work in remote rural areas. From 

2013-2015, 81 percent of operations rated moderately satisfactory or better in overall 

achievement. The IOE also highlighted the need for IFAD to strengthen its operations to address 

performance bottlenecks, adopt new approaches to address the root causes of gender inequality, 

systematize the use of non-lending activities in country programs, and improve data granularity 

to better monitor performance.

2018 Priorities: Key U.S. priorities for IFAD in 2018 include: (1) supporting measures, projects, 

and programs that will further U.S. food security priorities, and engaging with IFAD in a manner 

that enhances U.S. national interests and delivers results; and (2) working with other member 

states to continue preparing IFAD to deliver a higher and more impactful work program over the 

IFAD-11 period that focuses on alleviating rural poverty in the poorest countries. 
17

North American Development Bank (NADB)

Performance in 2017:

• NADB approved $280.6 million in financing in 2017. This included $273.1 million in 

loans, $6.2 million in grants, and $1.2 million in technical assistance.

• The sectoral breakdown of NADB’s outstanding portfolio (by volume) at the end of 2017 

was wind energy (48 percent), solar energy (23 percent), water and wastewater (13 

percent), air quality (7 percent), storm drainage (4 percent), and basic urban infrastructure 

(3 percent).

• At the end of 2017, 63 percent (52 projects) of NADB’s outstanding portfolio was in 

Mexico, and 37 percent (19 projects) was in the United States.

Key Institutional Reforms: In 2017, NADB continued steps to carefully manage available 

capital to protect its credit rating, including mitigating risk by limiting concentration in specific 

project sectors and decreasing average loan size, while still maintaining technical assistance and 

advisory services to communities in need. NADB also strengthened its financial capacity by 

boosting non-interest income such as commitment, advisory, trust, and administrative fees.

In November 2017, the NADB and the Border Environment Cooperation Commission (BECC) 

formally completed the merger of the two institutions, which the NADB/BECC Board of 

Directors recommended in a resolution passed in December 2014. The merger marks a 

significant milestone in the evolution of NADB and BECC and will enable the joint entity to 

improve efficiencies, offer improved services to borrowers, and better fulfill NADB and BECC’s 

mission to preserve, protect, and enhance the environment of the border region in order to 

advance the well-being of the people of the United States and Mexico. NADB recruited its first 

Chief Environmental Officer (CEVO), a position created as a result of the merger to ensure the 

environmental integrity of NADB’s operations and the continuation of core BECC functions.

NADB also enhanced its results measurement by compiling, for the first time, an aggregate 

report summarizing all completed project close-out reports. The aggregate report provides a 

comprehensive overview of indicators for each sector where it operates, project achievements, 

and lessons learned and areas for improvement.

2018 Priorities: In 2018, key priorities for NADB are: (1) continued efforts to strengthen the 

NADB’s capital position; (2) developing a strategic plan for the NADB’s core and emerging 

sectors in coming years, including continuing to build results measurement and evaluation 

capabilities and focusing on more economically impactful projects that fit NADB’s mission and 

require NADB resources to catalyze private investment; (3) monitoring the performance of the 

merged NADB/BECC; and (4) integrating the new Chief Environmental Officer position, created 

following the merger, into the institution’s management and operations. 
18

Report on IDA Contribution to Graduation

The U.S. Department of the Treasury presents this report consistent with 22 U.S.C. § 262r6(b)(2). That section directs the Secretary of the Treasury to report to Congress on how the 

World Bank’s International Development Association (IDA)-financed projects “contribute to the 

eventual graduation of a representative sample of countries from reliance on financing on 

concessionary terms and international development assistance.”

IDA provides highly concessional loans and grants to the poorest countries, with the aspiration 

that countries achieve levels of growth and institutional capacity that allow them to finance their 

development needs from a mix of non-concessional resources from the public sector, market 

borrowing, private investment, and their own domestic resources, facilitating graduation from 

IDA. The United States believes that IDA should direct its scarce concessional resources to the 

poorest countries that have the most limited access to other sources of finance. Reviewing the 

process by which IDA helps its richer, more creditworthy clients sustainably graduate from 

reliance on concessional resources was an important priority for the IDA-18 replenishment 

negotiations that occurred in 2016.

The IDA graduation process is normally triggered when a country’s per capita gross national 

income exceeds the “operational” graduation threshold ($1,185 for World Bank fiscal year 2018) 

for at least two consecutive years and the country is deemed creditworthy enough to receive 

loans from the World Bank’s IBRD. The process involves phasing out IDA lending and phasing 

in IBRD lending. Before a country fully graduates, there is typically a transitional stage of 

undetermined length, known as “blend” status, during which countries can access both IDA and 

IBRD resources. There are currently 16 blend countries: Cabo Verde, Cameroon, Republic of 

Congo, Dominica, Grenada, Kenya, Moldova, Mongolia, Nigeria, Pakistan, Papua New Guinea, 

St. Lucia, St. Vincent and the Grenadines, Timor-Leste, Uzbekistan, and Zimbabwe. While 

eligible, Zimbabwe does not currently receive IDA or IBRD financing due to protracted nonaccrual status.

To date, 35 countries have graduated from IDA. Bolivia, Sri Lanka, and Vietnam graduated in 

July 2017 at the beginning of the IDA-18 period. However, since there is a constraint on the 

amount of IBRD lending they can access, these countries remain eligible for a limited amount of 

transitional assistance from IDA during IDA-18 to avoid a precipitous drop in development

resources. India completed this transition period and is no longer eligible for IDA transition 

assistance as of the beginning of IDA-18. 

As part of the IDA-18 replenishment negotiations, IDA Management committed to make 

recommendations to improve the management of the “blend” period so as to better prepare 

countries for graduation from IDA, which it will begin presenting at the IDA-18 Mid-Term 

Review in November 2018. 
19

Annex on IMF Exceptional Access Programs

Under normal access limits, total IMF program financing is limited to no more than 435 percent 

of quota, and disbursements in any one year may not exceed 145 percent of quota. Financing 

amounts that exceed normal lending limits are referred to as “exceptional access” programs. As 

of June 2018, Ukraine and Argentina are the only countries with exceptional access programs. 

In the event that a new exceptional access program comes to the IMF Executive Board, Treasury 

is required to submit a report to Congress in accordance with section 9004 of the Consolidated 

Appropriations Act, 2016. (In June 2018, Treasury submitted a report on Argentina’s 

exceptional access program describing the size and tenor of the program as well as a debt 

sustainability analysis.) 

Ukraine

In March 2015, the IMF Executive Board approved a 4-year Extended Fund Facility (EFF)

arrangement for Ukraine in the amount of SDR 12.35 billion or approximately $17.5 billion (614 

percent of Ukraine’s quota). At the time of program approval, the conflict in Eastern Ukraine 

had taken a significant toll on the industrial base and exports, undermining confidence and 

putting pressure on the financial system. The program aims to support Ukrainian efforts to 

stabilize economic conditions, strengthen fiscal sustainability, restore banking system health, 

reform the energy sector, and strengthen the business investment climate, particularly by tackling 

corruption. The IMF has disbursed roughly $8 billion to Ukraine under the current program.

Ukraine has made progress on economic reforms, including reducing large deficits at stateowned enterprises and taking significant steps to clean up and strengthen the financial sector. 

However, the IMF’s fourth review has been ongoing since April 2017 and has proven to be the 

most politically challenging to date. It requires passing legislation establishing an independent 

anti-corruption court (ACC), privatization, utilizing an automatic gas price adjustment 

mechanism (under a formula developed by the current Ukrainian government in consultation 

with the IMF), and pension reform. Ukraine’s parliament has passed a pension reform law and 

privatization legislation, but both require further changes to become fully compliant with the 

IMF program.

Ukraine will need to implement key structural reforms, including land reform, price 

liberalization and de-monopolization to achieve sustainable economic growth. Fulfilling the 

IMF program conditions will be critical to help provide resources and improve Ukraine’s ability 

to service its debt – which includes $3 billion in U.S. loan guarantees, the first of which comes 

due in May 2019 – and maintain market access.

Argentina

In June 2018, the IMF Executive Board approved a three-year Stand-By Arrangement (SBA) for 

Argentina in the amount of SDR 35.379 billion or approximately $50 billion (1,110 percent of 

Argentina’s quota). In early 2018, Argentina began to experience exceptional capital account 

pressure due to the tightening of global financial conditions and the shift of portfolio preferences 

away from peso assets. The program’s objectives are to bolster market confidence and reduce 

Argentina’s balance of payments vulnerabilities to allow for greater economic growth and 

investment. The program is focused on fiscal adjustments combined with protections for 
20

vulnerable populations, reducing inflation, increasing the independence of the central bank to 

improve credibility, and a flexible exchange rate regime with intervention to limit market 

disruption. The Board’s decision allowed the IMF to immediately disburse $15 billion to 

Argentina under the new program. Argentine authorities intend to treat the remainder of the 

arrangement as precautionary.