T R E A S U R Y I N T E R N A T I O N A L P R O G R A M S

TREASURY INTERNATIONAL PROGRAMS • TABLE OF CONTENTS

 TAB LE OF CONTE NTS

TREASURY INTERNATIONAL PROGRAMS

Justification for Appropriations 

FY2007 Budget Request

TABLE OF CONTENTS

Introduction

Letter from Treasury Under Secretary Timothy D. Adams............................................................................................................................................................................v

Section 1: Treasury International Assistance Programs: 

 FY2007 Budget Request...............................................................................................................................................................................................................................................1 

Summary Table: Appropriations and Requests.................................................................................................................................................................................................................................1 

Summary Table: Arrears.............................................................................................................................................................................................................................................................................................................................................2

Summary of Accounts and Authorization Requests.........................................................................................................................................................................................................3

Section 2: Support for the Multilateral Development Banks............................................................................................................5

U.S. MDB Reform Agenda

Making Assistance Effective......................................................................................................................................................................................................................................................................................................................9

Private Sector-led Economic Growth and Trade....................................................................................................................................................................................................................13

Good Governance, Greater Transparency, and Fighting Corruption.........................................................................................................................20

Supporting U.S. Foreign Policy Objectives.................................................................................................................................................................................................................................................24

Section 3: Support for Debt Restructuring Programs............................................................................................................................................27

Enhanced HIPC Initiative..................................................................................................................................................................................................................................................................................................................................28

Tropical Forest Conservation Act (TFCA)......................................................................................................................................................................................................................................................31

Section 4: Support for Treasury Technical Assistance Programs.............................................................................33

Program Mandate......................................................................................................................................................................................................................................................................................................................................................................34

FY2005 Program Success Highlights....................................................................................................................................................................................................................................................................35

Post-conflict Countries/Failed-states Initiatives......................................................................................................................................................................................................................36
TREASURY INTERNATIONAL PROGRAMS • TABLE OF CONTENTS

T R E A S U R Y I N T E R N A T I O N A L P R O G R A M S

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Annex A: MDB Fact Sheets............................................................................................................................................................................................................................................................................................39

World Bank Group

International Development Association (IDA)......................................................................................................................................................................................................................................39

International Bank for Reconstruction and Development (IBRD).......................................................................................................................................41

Multilateral Investment Guarantee Agency (MIGA)...........................................................................................................................................................................................................43

International Finance Corporation (IFC)................................................................................................................................................................................................................................................................45

Global Environment Facility (GEF)..............................................................................................................................................................................................................................................................................47

Inter-American Development Bank Group

Inter-American Development Bank (IDB)........................................................................................................................................................................................................................................................49

Fund for Special Operations (FSO)......................................................................................................................................................................................................................................................................................49

Multilateral Investment Fund (MIF)........................................................................................................................................................................................................................................................................................51

Inter-American Investment Corporation (IIC).........................................................................................................................................................................................................................................53

Asian Development Bank Group 

Asian Development Bank (AsDB).............................................................................................................................................................................................................................................................................................55

Asian Development Fund (AsDF)...............................................................................................................................................................................................................................................................................................57

African Development Bank Group

African Development Bank (AfDB).......................................................................................................................................................................................................................................................................................59

African Development Fund (AfDF).........................................................................................................................................................................................................................................................................................61

European Bank for Reconstruction and Development (EBRD)..........................................................................................................................63

International Fund for Agricultural Development (IFAD)..............................................................................................................................................................65

North American Development Bank (NADB)........................................................................................................................................................................................................................67

Annex B: Summary Tables (in $)..................................................................................................................................................................................................................69

Summary Table: Appropriations and Requests (in $)...................................................................................................................................................................................................69 

Summary Table: Arrears (in $)...............................................................................................................................................................................................................................................................................................................70
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Boxes

Multilateral Debt Relief Initiative.....................................................................................................................................................................................................................................................................................................7

U.S. MDB Reform Agenda...............................................................................................................................................................................................................................................................................................................................9

Indicators Introduced Under IDA-14’s Results Measurement System...............................................................................................................10

Measuring Results in Projects..............................................................................................................................................................................................................................................................................................................11 

World Bank/IFC Doing Business Project........................................................................................................................................................................................................................................................15

World Bank and Inter-American Development Bank Give Strong Support to the Central 

 American Free Trade Agreement – Dominican Republic (CAFTA-DR)............................................................................................17

Transparency and Accountability: Advancing the Policy Goals of Legislation 

 (Section 581 and Section 599B)...............................................................................................................................................................................................................................................................................21

World Bank Takes Strong Action Against Corruption in Borrowing Member Countries.............................22

Figures

MDB Annual Funding Requests and Appropriations....................................................................................................................................................................................................8

Declining U.S. Share in Replenishments..............................................................................................................................................................................................................................................................8 

U.S. Arrears to the MDBs.....................................................................................................................................................................................................................................................................................................................................9

Increasing Grants in IDA, AfDF & AsDF...............................................................................................................................................................................................................................................................13

Financial Flows from the Big 5 Multilateral Development Banks, IMF, 

 and Private Sources...............................................................................................................................................................................................................................................................................................................................................14 

Access to Infrastructure............................................................................................................................................................................................................................................................................................................................................18 

Poverty-Reducing Expenditures and External Debt Service.................................................................................................................................................................29

Tables

Summary of Appropriations and Requests....................................................................................................................................................................................................................................................1

Summary of Arrears................................................................................................................................................................................................................................................................................................................................................................2

Over the Next 10 Years Growth is Expected to Rise and Poverty Fall Around the World......................5

MDB Voting Shares (%)...........................................................................................................................................................................................................................................................................................................................................8

Policy and Poverty Selectivity of Official Development Assistance 

 Net of Emergency Aid.....................................................................................................................................................................................................................................................................................................................................12

MDB Commitments by Sector..............................................................................................................................................................................................................................................................................................................19

Debt Relief under the HIPC Initiative.............................................................................................................................................................................................................................................................................30

Tropical Forest Conservation Act (TFCA) Agreements..........................................................................................................................................................................................31

Summary of Appropriations and Requests (in $)......................................................................................................................................................................................................................69

Summary of Arrears (in $)..................................................................................................................................................................................................................................................................................................................................70

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TREASURY INTERNATIONAL PROGRAMS • INTRODUCTION

 I NTRODUCTION

“To overcome dangers in our world, we must also take the offensive by encouraging economic 

progress, and fighting disease, and spreading hope in hopeless lands. Isolationism would not 

only tie our hands in fighting enemies, it would keep us from helping our friends in desperate 

need. We show compassion abroad because Americans believe in the God-given dignity and 

worth of a villager with HIV/AIDS, or an infant with malaria, or a refugee fleeing genocide, or 

a young girl sold into slavery. We also show compassion abroad because regions overwhelmed 

by poverty, corruption, and despair are sources of terrorism, and organized crime, and human 

trafficking, and the drug trade.”

— President George W. Bush, January 31, 2006

DEPARTMENT OF THE TREASURY

WASHINGTON

A major goal of U.S. international economic policy is to increase economic growth and stability around the 

world. The multilateral development banks, debt restructuring programs, and Treasury’s technical 

assistance play key roles in the effort to increase global economic growth and reduce poverty, which is 

closely and invariably linked to U.S. foreign policy objectives of sustaining peace, promoting security, and 

combatting terrorism. 

Under President Bush’s leadership, the Administration has embarked on the most ambitious development 

agenda since the Marshall Plan. The new development agenda includes the Millennium Challenge 

Account, the President’s Emergency Plan for AIDS Relief, an ambitious debt cancellation initiative, and 

funding for the international financial institutions that is linked to reforms and measurable performance. 

The United States has nearly doubled overall development assistance, while at the same time 

transforming the development agenda to get economic development right and use aid more effectively. 

The Bush Administration has pursued an aggressive reform agenda in the multilateral development banks 

to deliver measurable results, to break the lend-and-forgive cycle by increasing grants to the poorest 

countries, to allocate funds based on countries’ performance and commitment to pro-growth policies, and 

to increase transparency, improve governance, and combat corruption. 

In the last several years, the United States has taken unprecedented steps to ensure that the burden of debt 

does not leave the poorest and most debt vulnerable countries mired in poverty. The United States, 

working with the other G-8 countries, secured a landmark multilateral debt cancellation and grants 

initiative in the World Bank, African Development Bank, and International Monetary Fund (IMF) to end 

the destabilizing lend-and-forgive cycle of development assistance to the poorest countries and free up 

funds for more effective growth and poverty reduction programs. As Treasury Secretary John Snow stated, 

“President Bush’s commitment to lift the crushing debt burden on the world’s poorest countries has been 

achieved. This is an achievement of historic proportions.” 
TREASURY INTERNATIONAL PROGRAMS • INTRODUCTION

T R E A S U R Y I N T E R N A T I O N A L P R O G R A M S

vi I NTRODUCTI

I am pleased to present the FY2007 Justification for Appropriations of Treasury International Programs. In 

the past year, Treasury International Affairs has worked hard to advance the President’s international policy 

agenda. Among other achievements, Treasury: 

brokered the historic multilateral debt relief initiative (MDRI); 

initiated, reinforced, and extended key policy reforms in the multilateral development banks to make 

assistance more effective and deliver results; 

achieved an unprecedented level of debt relief in the Paris Club for Iraq; 

devised an innovative debt reduction and debt buyback treatment for Nigeria; and

provided Treasury technical advisors on 72 individual projects in 49 countries to promote economic 

policy reforms and combat corruption, money-laundering, and the financing of terrorism. 

We must continue to build on these successes. Your continued support for our collective efforts will have a 

concrete and lasting impact on the ability of the poorest countries to increase economic growth and reduce 

poverty, which underpins the overarching goals of economic stability, security, and peace. 

I ask for Congress’s support for the President’s FY2007 request of $1.535 billion for Treasury International 

Programs, which seeks to:

provide the resources and expertise needed to achieve the above goals over the next year;

lock in hard-won reforms at the multilateral development banks to reduce corruption, increase 

effectiveness, and ensure accountability;

incentivize further institutional reforms to ensure that taxpayer dollars are well spent; and

relieve the crushing burden of unsustainable debt for countries with sound, pro-growth economic 

policies.

We have developed a new format for our FY2007 Justification for Appropriations. I hope you will find it 

helpful. If you would like any additional information, we, of course, stand ready to provide it. 

 

Timothy D. Adams

Under Secretary for International Affairs •••••••••
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(Table 1) Summary of Appropriations and Requests 

Treasury International Programs

FY2005-FY2007 ($ millions)

FY2005 FY2006 FY2007

Appropriations Total

Request

Appropriations 1Annual

Commitments

Total

Request

Multilateral Development 

Banks (MDBs):

World Bank Group

 IBRD 0.0 0.0 0.0 0.0 0.0

 IDA 843.2 950.0 940.5 950.0 950.0

 MIGA 0.0 1.7 1.3 0.0 0.0

 IFC 0.0 0.0 0.0 0.0 0.0

Global Environment Facility 106.6 107.5 79.2 56.3 56.33

Inter-American Development 

Bank 

 IDB 0.0 0.0 0.0 0.0 0.0

 IDB/FSO 0.0 0.0 0.0 0.0 0.0

 IIC 0.0 1.7 1.7 0.0 0.0

 MIF 10.9 1.7 1.7 25.0 25.0

Asian Development Bank

 AsDB 0.0 0.0 0.0 23.8 23.83

 AsDF 99.2 115.3 99.0 115.3 115.3

African Development Ba

 AfDB 4.1 5.6 3.6 5.0 5.0

 AfDF 105.2 135.7 134.3 135.7 135.7

European Bank for Reconstruction and Development 35.1 1.0 1.0 0.0 0.0

North American Development 

Bank 0.0 0.0 0.0 0.0 0.0

Int’l Fund for Agricultural 

Development 14.9 15.0 14.9 18.0 18.0

Total MDBs 1,219.2 1,335.3 1,277.2 1,329.0 1,329.0

Debt Restructuring:

HIPC TOTAL, of which: 79.4 44.62

 Bilateral Debt Reduction 79.4

 HIPC Trust Fund 0.0

Tropical Forest Conservation Act 

(TFCA) 19.8 19.8

Total Debt Restructuring 99.2 99.8 64.4 182.8

Other Accounts:

Technical Assistance 18.8 20.0 19.8 23

TOTAL TREASURY 

INTERNATIONAL ACCOUNTS 1337.2 1,455.1 1,361.4 1,535.5

} 99.8 182.8 } 2

Totals may not add due to rounding. 

1Includes an across the board rescission of 1.0% (.01) applied to each line item, as required by P.L. 109-148, 12/30/05.

2The amounts allocated to each category of debt restructuring are determined according to relative program urgency and need.

3While the GEF and the AsDB combined FY2007 request is $80,000,000, the balance of funding between these two institutions will be 

decided after the conclusion of the GEF-4 replenishment negotiations. 
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(Table 2) Summary of Arrears

Treasury International Programs

FY2000-FY2006

($ millions)

ARREARS

endFY2000endFY2001endFY2002endFY2003endFY2004endFY2005endFY2006

Multilateral Development Banks (MDBs)

International Bank for Reconstruction and 

Development

International Development Association 32.1 62.3 73.0 78.5 120.7 327.5 337.0

Multilateral Investment Guarantee Agency 6.0 6.0 10.9 9.3 8.2 8.2 6.9

International Finance Corporation

Global Environment Facility 204.2 203.9 210.9 171.6 140.7 141.5 169.8

Inter-American Development Bank

IDB Fund for Special Operations

Inter-American Investment Corporation 9.0 9.1 16.1 22.8 47.8 47.8 46.1

Multilateral Investment Fund 98.8 88.8 88.8 64.3 39.5 28.6 26.9

Asian Development Bank

Asian Development Fund 100.0 128.2 133.2 138.9 98.3 102.1 118.4

African Development Bank 1.0 0.0 0.0 0.0 0.1 0.6 2.0

African Development Fund 0.2 0.2 10.8 16.8 29.6 31.0

European Bank for Reconstruction and 

Development 0.2 0.4 0.7 * North American Development Bank

International Fund for Agricultural Development 0.0 0.0 0.1 0.2 0.3 0.5

TOTAL BUDGET AUTHORITY 451.1 498.5 533.1 496.7 472.7 687.0 738.6

* Less than $11,000 • Totals may not add due to rounding.
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Treasury International Assistance 

Programs: FY2007 Request

International Development Association (IDA): $950.0 million request for the second of three payments to 

the fourteenth replenishment of IDA (IDA-14). U.S. leadership secured a number of key objectives including a debt sustainability framework that will significantly increase grant financing, an expanded and robust 

results measurement system, improved transparency and anti-corruption measures, including a commitment to conduct an independent assessment of IDA’s internal controls framework. 

Global Environment Facility (GEF): $56.25 million request for the initial contribution to the fourth replenishment of the GEF (GEF-4). The replenishment negotiations are ongoing, and there is not yet agreement on the policy reforms needed to improve project quality, portfolio management, resource allocations, 

transparency, anti-corruption efforts, and the overall effectiveness of the GEF. The level of the request is an 

estimate based on progress in the negotiations to date and is contingent upon eventual satisfactory agreement on these outstanding policy issues. The final number for this initial contribution to GEF-4 could be 

higher or lower. 

Asian Development Bank (AsDB): $23.75 million request for a new regional environment program at 

the AsDB to achieve the aims of the Asia-Pacific Partnership on Clean Development and the Climate. The 

amount of this request is contingent upon the eventual outcome of the GEF-4 replenishment negotiations, 

where changes in the anticipated agreement on the outstanding policy issues than is currently anticipated 

could affect the eventual balance of funding between the two requests (GEF and AsDB).

Asian Development Fund (AsDF): $115.25 million request for the second of four payments to the eighth 

replenishment of the AsDF (AsDF-9). The United States secured a number of important policy reforms, 

including creation of a grants window, increased weight on a country’s governance and economic performance in the allocation of resources, new offices to strengthen internal oversight and implement a results 

measurement system, and increased transparency and anti-corruption measures. 

African Development Bank (AfDB): $5.02 million request for the eighth of eight payments to the AfDB’s 

fifth general capital increase (GCI-5). The U.S. payment leverages other donors’ commitments under GCI-5 

of more than $900 million per year.

African Development Fund (AfDF): $135.7 million request for the second of three payments to the tenth 

replenishment of the AfDF (AfDF-10). U.S. leadership secured key objectives, including a substantial increase in grant funding under a debt sustainability framework, strengthened measurable results system to 

improve effectiveness, improved transparency, increased activities to fight corruption, and greater support 

to post-conflict countries.

Summary of Accounts
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Multilateral Investment Fund (MIF): $25.0 million request for the first of six payments to the first replenishment of the MIF (MIF-II). The United States achieved its key objectives in the replenishment negotiations including a strengthened commitment to measurable results, increasing efficiency, maintaining the 

focus on grants, allocation of resources to maximize innovation, and reforming the Inter-American Development Bank procurement guidelines.

International Fund for Agricultural Development (IFAD): $18.0 million request for the first of three payments to the seventh replenishment of IFAD (IFAD-7). The United States achieved its key objectives in the 

replenishment negotiations, including a time-bound and measurable plan to increase IFAD’s effectiveness, 

improved implementation of the performance-based allocation system, a debt sustainability framework that 

will result in an increase in grant funding, and increased transparency and anti-corruption measures. 

Debt Restructuring: $182.8 million request supports bilateral Heavily Indebted Poor Countries (HIPC) and 

poorest country debt reduction programs and the Tropical Forest Conservation Act (TFCA) debt reduction 

program. Under the enhanced HIPC initiative, at least $175 million of the requested funding is required to 

complete U.S. bilateral debt reduction for the Democratic Republic of the Congo (DRC) in FY2007, when 

the DRC is expected to receive final stock of debt reduction. The remainder of the request will be used for 

TFCA debt programs or for other potential HIPC-related debt reduction costs (for countries such as Liberia 

and Sudan). 

Treasury International Affairs Technical Assistance Programs: $23.7 million request supports programs 

that provide financial advisors to countries seeking assistance in implementing significant economic reforms, focusing on the functional areas of budget, taxation, government debt, financial institutions, and 

financial crimes law enforcement. It is estimated that $5.47 million (23%) of the request will fund resident 

and short-term advisor projects with countries combatting terrorist finance activity. A large portion of the 

request (32%) will be used for assistance programs in sub-Saharan Africa, supporting economic and financial reforms in countries receiving HIPC debt relief. Over a quarter of the request (25.7%) will be used to 

carry out projects in the Greater Middle East, including Afghanistan, Iraq, and Jordan.

FY2007 Authorization Requests

Enterprise for the Americas Multilateral Investment Fund (MIF-II) 

For FY2007, the Administration is requesting authorization for the United States contribution of $150,000,000 

to the first replenishment of the resources of the Enterprise for the Americas Multilateral Investment Fund 

(MIF-II), subject to obtaining the necessary appropriations. 

Heavily Indebted Poor Countries (HIPC) Initiative

The Administration is also requesting extensions of two existing authorities related to the Heavily Indebted 

Poor Countries (HIPC) initiative which both expire at the end of FY 2006: (1) authority to engage in bilateral 

HIPC debt reduction; and (2) authority to make contributions to the HIPC Trust Fund. HIPC debt reduction authority is contained in Section 501(i) of title V of H.R. 3425 as enacted into law by section 1000(a)(5) 

of Public Law 106-113, as amended. HIPC Trust Fund authority is contained in Section 801(b)(1)(ii) of 

Public Law 106-429, as amended.
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(Table 3) Over the Next 10 Years Growth is Expected to 

Rise and Poverty Fall Around the World (percent unless overwise indicated)

Population Living on Less than $1 a Day

Average 

Annual Growth Rate, 

2005-15

Headcount Index Number of People 

(millions)

Region Per capita GDP GDP 1990 2001 2015 1990 2001 2015

East Asia and Pacific 5.5 6.3 29.6 14.9 0.9 472 271 19

China 6.0 6.7 33.0 16.6 1.2 375 212 16

Europe and Central Asia 3.6 3.7 0.5 3.6 0.4 2 17 2

Latin America and the 

Caribbean 2.4 3.6 11.3 9.5 6.9 49 50 43

Middle East and North Africa 2.4 4.2 2.3 2.4 0.9 6 7 4

South Asia 4.2 5.6 41.3 31.3 12.8 462 431 216

Sub-Saharan Africa 1.7 3.6 44.6 46.4 38.4 227 313 340

Average/Total 3.6 4.8 27.9 21.1 10.2 1,219 1,089 622

Excluding China 2.8 4.2 26.1 22.5 12.9 844 877 606

Source: World Bank Staff Estimates; Global Monitoring Report 2005

Support for the 

Multilateral Development Banks

“People around the world deserve to live free of poverty and hunger, and real prosperity is the 

work of many years. To spread opportunity to every corner of the world, we must build on our 

current efforts.”

 — President George W. Bush • September 20, 2004

President Bush has charted a new course for international development. His groundbreaking approach, 

which gained international consensus in Monterrey in 2002 by developing and developed counties alike, focuses on results achieved, not on resources spent. It recognizes that developing countries must take primary 

responsibility for their development by encouraging the sources that produce wealth: economic freedom, 

political liberty, the rule of law, and human rights. Development assistance plays an important role, particularly in the fight against hunger and disease and in reinforcing political and economic reform. The new 

course affirms private sector activity as the primary engine of poverty-reducing growth, and accordingly 

supports reforms and policies that promote trade and investment, which stimulates real and lasting growth 

and thus provides the vast majority of resources for development. 
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Economic Growth, Led by the Private Sector, is the Key 

to Reducing Poverty

Creating jobs and reducing poverty throughout the world are essential to promoting stability and security. 

Growth in developing countries has improved in recent years, averaging 6.7% in 2004, the highest level in 

decades. If current growth projections hold, the worldwide extreme poverty headcount index will fall from 

28% in 1990 to 10% in 2015, exceeding the goal set out in the 2000 Millennium Declaration. 

There remain, however, many challenges to improving the standards of living in the developing world. The 

AIDS epidemic continues to have a devastating impact in many developing countries, particularly in Africa 

where life expectancy rates have actually dropped. Almost 11 million children under the age of five die every year, the vast majority of whom live in developing countries. Two billion people lack adequate sanitation 

or have no electricity. And a billion do not have safe water to drink. 

Growth prospects are uneven across and within regions. These disparities are largely explained by differences in governments’ commitment to pro-growth policies and in the institutions responsible for implementing 

them. While economic growth holds the key to reducing poverty, experience shows that it is considerably 

more difficult to sustain growth than it is merely to initiate it. The power of the private sector must be 

unleashed, particularly in sub-Saharan Africa, to realize the sustained growth necessary for poverty reduction. 

As President Bush stated in his September 14, 2005 address to the United Nations, eliminating trade barriers 

is the key to overcoming poverty in the world’s poorest nations. Successful completion of the WTO Doha 

negotiation round is critical to the reduction of poverty and the ability of developing countries to grow their 

economies and provide the private and public resources critical to their development. The elimination of 

barriers to trade in goods and services, including financial services, could lift millions of people out of poverty over the next 15 years. 

Getting Economic Development Right — Delivering Results 

From the outset, the Bush Administration has pursued an aggressive reform agenda in the multilateral development banks (MDBs) to get economic development right by:

insisting that allocation of resources be linked to measurable results; 

increasing grants to the poorest and most debt vulnerable countries; 

channeling more funds to countries with pro-growth policies; and

increasing transparency, improving governance, and combatting corruption.

Under the U.S. reform agenda, a key strategy is to encourage and assist countries to remove impediments 

to economic growth, and a key principle is to insist on measurable results in all programs. To ensure that 

assistance from the MDBs is more effective, the United States has led the effort to focus resources on countries that institute policies to promote economic growth and adopt clear measurable goals and targets for 

•

•

•

•
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the assistance that they receive. In addition, most 

of the MDBs are establishing results-oriented management systems, and improving accountability 

and transparency to help ensure concrete and measurable results. 

More Grant Assistance

In 2001, President Bush announced his new grants 

initiative, calling on the MDBs to provide 50% of 

their assistance to the poorest countries in the form 

of grants. He explained that he aimed not only to 

“drop the debt” of poor countries but also to “stop 

the debt.” Since then, in the context of avoiding a 

future build-up of unsustainable debt burdens, the 

United States has led the effort to assist the poorest countries to make more productive investments 

without becoming more indebted by significantly 

increasing the share of MDB assistance provided by 

grants rather than loans. 

The shift to grants will help to break the lend-andforgive cycle of assistance. However, there also 

needs to be a cleaning of the balance sheets so that 

future generations in the poorest countries can 

work to achieve higher economic growth and reduce poverty without the heavy burden of unsustainable debt. To achieve this objective, the President proposed last year a complete write-off of all 

World Bank, African Development Bank and International Monetary Fund concessional debt to qualifying Heavily Indebted Poor countries (HIPCs). In June 

2005, the United States brokered an historic deal with the UK and other G-8 countries for a comprehensive 

debt cancellation package for the poorest countries.

The FY2007 Request: Support for Continuing Reform 

The multilateral development banks (MDBs) play a key role in the effort to assist countries in achieving 

the economic growth necessary for reducing poverty, which is closely and invariably linked to U.S. foreign 

policy objectives of sustaining peace, promoting security, and combatting terrorism. To help achieve these 

goals, the Administration requests $1.329 billion for FY2007 to fund scheduled annual commitments to the 

MDBs. 

The MDBs provide support for key U.S. foreign policy priorities, such as reconstruction in Iraq and Afghanistan; support to prevent and contain avian flu; disaster assistance following the devastating earthquake in 

Pakistan and the tsunami in South Asia; assisting post-conflict and fragile states in their efforts to keep the 

peace and revitalize their economies; and to fight HIV/AIDS. 

Box  • Multilateral Debt Relief Initiativ

The United States, working with the UK and other 

G-8 countries, secured a landmark debt relief initiative for the world’s poorest and most heavily indebted countries in 2005. Specifically, it will provide 100% cancellation of debt obligations owed to 

the World Bank (IDA), the African Development 

Fund (AfDF), and the International Monetary Fund 

(IMF) by eligible countries in the Heavily Indebted 

Poor Countries (HIPC) initiative. Over time, 42 

countries are projected to receive up to $60 billion 

in debt relief as a result of this initiative. This action 

will free up funds for more effective and measurable 

economic growth and poverty reduction programs. 

The removal of unsustainable debt combined with 

additional development resources – largely provided on grant terms – will deliver significant support 

for reaching the Millennium Development Goals 

(MDGs). The Multilateral Debt Relief Initiative 

(MDRI) will be financed over time by contributions 

to IDA and the AfDF. For FY2007, the United States 

will accelerate encashment of its already pledged 

IDA-14 and AfDF-10 replenishment contributions, 

which will generate a corresponding credit equal to 

our share of the financing for the MDRI. The full 

funding of the President’s FY2007 requests for IDA 

and AfDF is critical to implementation of this historic initiative. 
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The FY2007 total request 

for all of the MDBs of 

$1.329 billion is slightly 

lower than last year’s request of $1.335 billion, reflecting the United States 

ability to secure agreement on serious reforms 

without major funding 

increases. In fact, the 

United States has been 

successful in maintaining 

the reform momentum 

while reducing its share 

of recent replenishments. 

The United States still remains the largest cumulative contributor to the 

MDBs, giving the U.S. sizeable influence in the institutions and a significant role in shaping the policies of 

the institutions. In most of the institutions, the voting 

share of the U.S. is higher than that of any other country.

U.S. participation leverages a large volume of resources 

— over $50 billion — in MDB assistance in 2005. For 

each dollar that the United States contributed, over $30 

of assistance was mobilized for increasing growth and 

reducing poverty around the world. However, volume 

is not enough; improving the quality of assistance is esMDB ANNUAL FUNDING REQUESTS AND

APPROPRIATIONS

FISCAL YEARS

MDB Annual

Funding

Requests

Appropriations

2000.0

1500.0

1000.0

500.0

0.0

2001200220032004200520062007

($ millions)

DECLINING U.S. SHARE IN

REPLENISHMENTS

U.S. % Share 25

20

15

10

5

0

Percentage

IDA-12IDA-13IDA-14

AfDF-8AfDF-9AfDF-10AsDF-7AsDF-8AsDF-9

(Table 4)

MDB Voting Shares (%)

Institution IBRD IDA IFC MIGA IDB FSO IIC MIF AfDB AfDF1 AsDB AsDF2 EBRD IFAD GEF

Canada 2.78 2.83 3.39 2.56 4.00 4.00 - 1.29 3.72 4.14 4.53 4.66 3.45 2.66 4.22

France 4.30 4.19 5.04 3.94 1.90 1.90 3.07 - 3.72 4.98 2.19 4.41 8.65 3.03 7.99

Germany 4.49 6.67 5.36 4.28 1.90 1.90 1.42 - 4.08 4.84 3.80 5.78 8.65 4.08 12.98

Italy 2.78 2.73 3.39 2.44 1.90 1.90 3.07 2.65 2.40 3.15 1.77 3.90 8.65 2.52 5.71

Japan 7.86 10.40 5.87 4.30 5.00 5.00 3.53 34.80 5.41 6.83 12.90 35.00 8.65 4.26 18.83

UK 4.30 5.08 5.04 4.11 0.96 0.96 - - 1.68 2.39 1.96 6.00 8.65 2.03 7.03

US 16.39 13.44 23.65 14.95 30.01 30.01 25.00 32.10 6.53 6.26 12.90 13.70 10.15 8.88 18.20

Total G7 42.9% 45.3% 51.7% 36.6% 45.7% 45.7% 36.1% 70.8% 27.5% 32.6% 40.1% 73.5% 56.9% 27.5% 75.0%

1AfDF donor countries have 50% of fund voting power, while AfDB has the other 50%. Cumulative contribution share of donor countries is approximately double the voting share.

2AsDF voting shares represent burden share %.
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sential. The United States must continue and build 

on its current efforts to deliver results on its MDB 

reform agenda (See Box 2). 

It is vitally important to fully fund the FY2007 request for MDB scheduled annual commitments so 

that U.S. arrears to the MDBs do not continue to 

rise; total arrears currently stand at $739 million, the 

highest level since 1997. Ultimately, rising arrears 

undermine U.S. leadership in the institutions and 

support for its reform agenda. 

Making Assistance 

Effective 

To ensure that assistance is effective, the United States has led the effort to focus resources on countries that 

institute policies to promote economic growth and to adopt clear, measurable goals and targets for the assistance that they receive. Most of the MDBs are establishing results-driven management systems, relieving 

unsustainable debt burdens, increasing the amount of assistance provided as grants, and improving accountability and transparency — all to help ensure concrete development outcomes. 

Managing for results

Managing for results will increase the effectiveness of MDB operations because what gets measured gets 

done. The United States has been a leader in pressing all of the MDBs to establish results-based management 

systems, emphasizing measurement of impacts and outcomes, and reporting results on a project, country, 

and institutional basis. The MDBs have made considerable progress in their efforts, but such efforts must be 

broadened and deepened, particularly at the institutional level, including evaluating staff and managers on 

project results rather than on volume. 

Due to strong U.S. leadership in the IDA-14 replenishment negotiations, donors agreed on a significantly expanded IDA results measurement framework, which will help improve the effectiveness and 

accountability of IDA’s development assistance. The results framework includes:

fourteen country outcome indicators; 

output indicators measuring IDA’s contribution in the health, education, water supply, and transportation sectors across all IDA countries;

•

◉

◉

Box  • U.S. MDB Reform Agend

Making assistance effective through managing for results, supporting good performers, and improving debt sustainability and increasing grants.

Private sector-led economic growth and trade through promotion of small business, building good 

investment climates, liberalizing trade, and investing in infrastructure. 

Good governance, increasing transparency, and fighting corruption.

Supporting U.S. foreign policy objectives through responding to global challenges.

•

•

•

•

U.S. ARREARS TO THE MDBS

800

700

600

500

400

300

200

100

0

2000 2001 2002 2003 2004 2005 2006

FISCAL YEARS

MDB Arrears ($ Millions)
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10 SECTION 2 • SU PPORT FOR TH E M U LTI LATE R AL DEVE LOPM E NT BAN K

country-level institutional indicators — including results-oriented Country Assistance Strategies; 

and 

project-level indicators that will monitor the percentage of projects with satisfactory outcomes. 

IDA launched a public interactive website on July 1, 2005, to publish progress of the Results Measurement System.

On an institutional level, the World Bank is developing a system to measure Key Performance Indicators 

in each Vice Presidential unit. Once the system is implemented, budget allocations will be made on the 

basis of performance. However, work is still needed on aligning staff incentives and project outcomes 

— rather than tying staff compensation/performance to volume of project lending.

The AfDF now requires results-based Country Strategy Papers for all AfDF countries, according to 

guidelines which the United States had a large role in shaping. As part of the AfDF-10 replenishment, 

every project and country strategy will have a results framework. The AfDB has developed a set of 

external performance indicators to measure the Bank’s contribution toward poverty reduction objectives at the country level. It has rolled out a pilot of its Balanced Scorecard of 6 strategic themes and 35 

performance indicators to measure institutional performance. 

The AsDB launched a comprehensive results measurement plan following the 2004 AsDF-9 replenishment negotiations to improve the evaluation of institutional and staff performance and country operations. At the country level, new country strategy programs (CSPs) will now be results-based, which 

means more monitoring and evaluation processes and dissemination of best practices and lessons 

learned. The AsDB approved a new staff incentive system which will attract and retain high-caliber 

employees and ensure that rewards are allocated for achieving development outcomes, instead of for the 

quantity of loans approved. The challenge now is implementation, but the blueprint is in place.

◉

◉

•

•

•

Box  • Indicators Introduced under IDA-14’s Results Measurement Syste

Outcome indicators Indicators of IDA Performance, Fiscal 2005-7

Share of population below $1 a day 

poverty line

• Project Level

• Under-five child mortality rate Share of projects with satisfactory outcome ratings

•

HIV prevalence rate of pregnant women 

age 15-24

• Share of projects with satisfactory quality at entry ratings•

Share of births attended by skilled health 

personnel

• Share of first IDA Project Supervision Reports 

with satisfactory baseline data on expected outcomes for projects initiated after July 2003

•

Ratio of girls to boys in primary and 

secondary education

• Share of IDA Implementation Completion Reports with satisfactory data on project outcomes•

• Primary school completion rate Country Level

Share of population with sustainable 

access to an improved water source

• Number of results-based country assistance 

strategies prepared during IDA14

•

Fixed and mobile telephone lines 

(per 1,000 people)

• Outputs

Formal cost of business startup (percentage of 

per capita gross national income)

• • Health

• Time required for business startup (days) • Education

Public financial management (number of 

benchmarks met) 

• • Water Supply

• GDP per capita (annual growth rate) • Transportation

Share of rural population with access to an 

all-season road

•

• Share of households with electricity
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Box  • Measuring Results in Project

The MDB’s design and specification of project-level results measurement indicators have improved. The 

institutions have proven that results measurement is possible even in adverse circumstances. For example, 

the World Bank’s multisector Infrastructure Development Project in Sierra Leone makes excellent use 

of development indicators to lay out a coherent development theory for the project. The project’s goals 

are to improve the country’s basic infrastructure: roads, the principal airport, and cargo port. The project 

specifies an overall performance objective for each of these goals, and then specifies the outcomes necessary to accomplish these objectives, including interim targets. These indicators provide important tools 

for project management and evaluation. 

The MDBs are improving their ability to measure outcomes in the social sectors. The AfDB’s $37 million 

project to support Health Care Development in two regions of Burkina Faso provides output and outcome indicators, with baseline data and interim targets, for a range of measures of public health.

The MDBs continue to face their greatest challenges in measuring the effectiveness of adjustment lending, in lending to support changes in institutions, and in using the indicators effectively for management 

and evaluation purposes. There is widespread understanding within the MDBs that meeting these challenges is critical to their institutional effectiveness. The Treasury Department continues to have an active 

dialogue with the institutions on how well they are measuring results on the project level and how much 

remains to be done. 

Supporting Good Performers

Assistance is more effective when it is provided to countries that implement pro-growth policies and practice good governance. A World Bank evaluation report found that countries with improved policies over 

the period 1999-2003 grew at more than twice the rate of countries whose policies did not improve. Increasingly, assistance follows good policies in the MDBs through performance-based allocation systems that 

allocate greater resources to poor countries with better policies and institutions. 

With strong and consistent U.S. pressure, all of the MDB concessional loan windows have put in place performance-based allocation systems that provide more funds to countries which rank higher on the country 

policy and institutional assessment (CPIA). Because of the importance of supporting countries that demonstrate commitment to good policies, the weight given governance is high and has even been increased 

recently in the AsDF. 

Today, the best policy performers in IDA will receive almost seven times more resources per capita 

than the poorest performers. For every $1 per capita of assistance to the median IDA performer in 

1993-1995, about $1.20 went to the best performers and $.85 to the poorest performers. By 1999-2001, 

the spread had widened, with $1.77 per capita going to the best performers and $0.57 to the poorest 

performers. IDA’s strategy for 2006 envisions an even wider spread, with $1.75 per capita going to the 

best performers and $0.38 to the poorest performers. 

As part of the AfDF-10 replenishment agreement, the AfDF committed to further refine its performance-based allocation framework by improving the differentiation between good and poor performers in per capita allocation of AfDF resources. Governance is now given greater weight in a country’s 

overall rating, better performing countries with good governance receive a correspondingly larger share 

of resources, and post-conflict countries receive an additional allocation in support of their recovery. 

•

•
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12 SECTION 2 • SU PPORT FOR TH E M U LTI LATE R AL DEVE LOPM E NT BAN 

In the IFAD-7 replenishment agreement, IFAD committed to strengthen the integrity of its performance-based allocation system by removing the fixed regional allocations and allocating resources 

across the lending program as a whole, based on performance. IFAD will improve the allocation formula, using more appropriate variables such as rural population. 

In 2005, the GEF finally agreed on a performance-based allocation system, as called for in the 2002 

GEF-3 agreement, to come into effect in July 2006, the beginning of GEF-4. However, only half of the 

resources will be allocated on the basis of performance; the weights on performance and governance are 

considerably less than in the other MDBs; and there is not yet a consensus in ongoing GEF-4 replenishment negotiations on extending the system across the GEF.

Selectivity based on performance and poverty has taken hold with MDB assistance increasingly determined 

by both policy performance and poverty, more so than bilateral assistance. Recent studies measuring the 

policy and poverty elasticities of aid show that the selectivity of both bilateral and multilateral assistance has 

improved since 1999. Furthermore, the selectivity of MDB assistance with respect to the quality of policies 

and institutions and with respect to recipient countries’ per capita income remains much higher than that 

of bilateral assistance. 

Improving Debt Sustainability And Increasing Grants

For decades, the international community has responded to developing countries’ struggles with unsustainable debt levels through stop-gap measures such as debt reductions, additional borrowing, and reschedulings. It is extremely difficult for countries – even those that make appropriate policy choices – to grow their 

way out of their “debt trap.” In the last several years, the United States has taken unprecedented steps to 

help ensure that the burden of debt does not leave the poorest and most debt vulnerable countries mired in 

poverty. 

An important step was taken in June 2005 when the United States brokered an historic deal with other G-8 

countries to wipe the debt slate clean from IDA, the AfDF, and the IMF for up to 42 HIPC countries demonstrating sufficient commitment to economic reform and poverty reduction. 

The Multilateral Debt Relief Initiative (MDRI) will deliver 100% of IDA, AfDF, and IMF Debt Stock 

Relief for eligible HIPC countries by offsetting gross assistance flows by the amount forgiven. Under the 

plan, 18 HIPC countries will be immediately eligible for IDA, AfDF, and IMF debt forgiveness: Benin, 

Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda, and Zambia. The remaining HIPCs will 

also become eligible as they reach their HIPC Completion Point. 

•

•

•

(Table 5)

 Policy and Poverty Selectivity of Official Development Assistance Net of Emergency Aid

Flow Policy selectivity 1999 Policy selectivity 2003 Poverty selectivity 1999 Poverty selectivity 2003 

Total aid 1.57 1.77 -0.34 -0.55

Bilateral aid 1.15 1.04 -0.27 -0.47

Multilateral 2.09 2.71 -0.68 -0.87

Source: Levin 2005 • From: World Bank Global Monitoring Report 2005

Note: Policy selectivity shows the policy selectivity index, which measures the elasticity of aid with respect to the quality of recipients’

policies and institutions. Poverty selectivity shows the poverty elasticity index, which measures the elasticity of aid with respect to

recipients’ per capita income.
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Grant financing is a critical component of long-term debt sustainability. The shift to greater use of grant 

financing by IDA, AfDF, and AsDF, achieved through U.S. leadership in the IDA-14, AfDF-10, and AsDF-9 

replenishment negotiations, will help to reduce the accumulation of unsustainable debts and free up funds 

for poverty reduction.

Under IDA-14, grants will now be awarded to countries on the basis of their debt vulnerability. The 

new formulation for grant allocations represents a significant step in ending the lend-and-forgive cycle 

of development assistance. Forty-seven countries (out of 62 eligible) will receive grant financing from 

IDA. Forty-two of these countries will receive 100% of their IDA assistance in the form of grants.

Under AfDF-10, grants will be extended on the basis of a country’s debt vulnerability and 27 countries 

(out of 38 eligible) are expected to receive 100% of AfDF assistance as grants. 

Under AsDF-9, a grant window was established for the first time in the Asian Development Fund where 

30% of assistance to the poorest countries will be in the form of grants.

Last year, IDA, AfDF, and AsDF provided almost $3 billion in grants to the poorest and most debt vulnerable countries.

IDA’s grant commitments have grown from nearly $1.0 billion in 2003 to over $2.0 billion in 2005. About 31% 

of IDA-14 resources – and 45% of assistance to the very poorest IDA-only countries – will be in the form of 

grants. This represents a 60% increase over the IDA-13 level, where 21% of assistance was in the form of grants. 

In 2005, the AfDF provided nearly 

$500 million in grants to the poorest 

African countries. This was up from 

$330 million in 2004 and comprised 

more than 35% of total 2005 AfDF 

assistance. In the new grant window 

established under AsDF-9, $250 million in grants was provided in 2005 

and an estimated $1.47 billion in 

grants will be provided to the poorest 

countries in Asia over the replenishment period 2005-2008. 

Private Sector-led 

Growth and Trade 

Strong growth requires an economic climate that is conducive to investment, job creation, and productivity. To achieve private sector-led growth, improvements in the overall business and investment climate 

— removing regulatory impediments, improving legal and judicial systems for the protection of property 

rights and enforcement of contracts, greater transparency in public sector management, and elimination of 

corruption — are conditions necessary for increasing investment. 

For most developing countries, efficient growth will include substantial international trade. For that reason, 

supporting improvements to the international trading system through the Doha and WTO negotiations is a 

key component of the U.S. development agenda. The impact these developments could have on developing 

nations is enormously positive, increasing economic growth and lifting millions of people out of poverty. 

This substantial impact is possible because private capital flows dwarf official development assistance. 

•

•

•

INCREASING GRANTS IN IDA, AfDF & AsDF

IDA

AfDF

AsDF

3500

3000

2500

2000

1500

1000

500

0

2003 2004 2005

($ millions)
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14 SECTION 2 • SU PPORT FOR TH E M U LTI LATE R AL DEVE LOPM E NT BAN 

MDB net flows peaked in 2002 and have since decreased due to an increase in repayments and prepayments 

from middle-income borrowers, particularly East Asian and Latin American countries. 

However, despite the fact that it is small compared to private sector capital flows, official assistance still has a 

vital role to play in stimulating real economic growth — when properly targeted and designed to yield concrete results. This is particularly the case in the poorer and post-conflict countries where the private sector 

is sometimes reluctant to invest due to the lack of a sustained track record. 

All of the MDBs are focused on the development of sound regulatory, supervisory and legal frameworks for 

the private sector in developing countries. All MDBs have played a role in supporting small and micro-enterprises throughout the world — a role the United States wants to continue to expand. The MDBs are also 

expanding their trade-related activities — trade liberalization policies, infrastructure, customs and trade 

facilitation — to help developing countries realize the potential benefits of trade to their economies. All 

MDBs support investments in infrastructure and have recently revitalized their efforts on what was historically their primary focus, but with an eye particularly on investments critical to private-sector growth and 

partnerships.

IDA-14 recognized the importance of stimulating private sector growth, and has called on other arms 

of the World Bank Group — IFC and MIGA — to encourage innovation in support of private sector development. Expanded support is to be provided for micro-, small-, and medium-size enterprises. IDA 

projects aim to improve the overall investment climate to help develop new industries, and to upgrade 

infrastructure and services. In December 2005, the Board approved a $20 million IDA project for Mozambique to help develop partnerships with the private sector to promote eco-tourism in conjunction 

with building the capacity of public sector institutions at all levels and local communities to manage 

biodiversity and natural resources. 

The Inter-American Development Bank (IDB) Board approved 14 private-sector operations in 2005 

— six direct loans and eight guarantees totaling $583 million. Seven of the guarantees were under 

the $400 million regional trade finance facilitation program approved in 2004. Private sector projects 

included airport development in Ecuador, electricity network modernization in Brazil, two regional 

trade finance funds, and a Dominican Republic trade facilitation financing program.

•

•

$ billions $ billions

GROSS FLOWS TO DEVELOPING COUNTRIES NET FLOWS TO DEVELOPING COUNTRIES

350

300

250

200

150

100

50

0

300

250

200

150

100

50

0

-50

1980 1985 1990 1995 2000 2003 1980 1985 1990 1995 2000 2003

MDBs IMF Private Sources

Source: World Bank Debtor Reporting System

MDBs IMF Private Sources

Financial flows from the Big 5 MDBs, IMF, and private sources
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New African Development Bank President Kaberuka has committed the Bank to playing a larger role 

in supporting private-sector led growth — whether to help build larger markets through regional integration, advise countries on financial or regulatory reforms, or to catalyze investment in much-needed 

infrastructure, perhaps via partial guarantees. During his first three months in office, he sought Board 

approval for two promising transactions: a $10 million partial guarantee to support women entrepreneurs in Kenya, that will improve these entrepreneurs’ access to credit and serve as a pilot that could be 

replicated elsewhere on the continent; and a $50 million equity investment in the Emerging Markets 

Partnership (EMP) Africa Fund that will improve access to credit and increase the private investment 

to GDP ratio in Africa from 10% in 2004 to 15% in 2010. 

With strong U.S. pressure, the AsDB has expanded and diversified the scale and scope of its private 

sector activities, including new projects on workers’ remittances, trade finance facilitation, and housing 

finance. In 2005, 17 private sector loans, equity investments, and guarantees totaling $753 million were 

approved. In Afghanistan, the AsDB invested in a fund that will provide equity and loan financing to 

small and medium enterprises across a wide range of industries. In the Kyrgyz Republic, the AsDF 

Banking Sector and Capital Market Development Program is promoting sound and more balanced 

development of the financial sector. The expected impact of the reforms will be increased savings and 

investments supporting sustainable economic growth.

Improving investment climates

A good investment climate plays an essential role in economic growth because it provides incentives for 

the private sector — from large-scale foreign and domestic firms to micro-enterprises — to invest, create 

jobs, and to re-invest. The World Bank’s 2005 World Development Report provided clear evidence that the 

lack of a conducive investment climate has been the main impediment to investment in most parts of the 

developing world. Improving investment climates is an essential element in the U.S. MDB reform agenda to 

promote private sector-led growth. 

Surveys of entrepreneurs in developing countries have also consistently reported that weak investment climates — regulatory impediments, lack of access to finance, inadequate infrastructure — are major constraints to their business activities. The costs of a weak investment climate are high, and the benefit of 

reforms could be substantial. Analysis indicates that Africa’s economy could grow by an additional 1.6% a 

year if the average country were to improve its business regulation system to the level of the average OECD 

country. 

•

•

Box  • World Bank/IFC Doing Business Projec

To highlight the importance of investment climate and to promote reform, the IFC together with the World Bank 

initiated the “Doing Business” project (http://www.doingbusiness.org), which has developed quantitative indicators of business regulations and their enforcement across 145 developed and developing countries that can be 

tracked and compared over time. The Doing Business report is an important effort by the World Bank and the IFC 

to assess the investment climates of countries and analyze which environments most effectively promote private 

sector development, a necessary condition for poverty reduction. The lessons taken from this analysis are being 

incorporated into World Bank reform programs with governments as well as IFC technical assistance.

The most recent Doing Business report indicated that, while much more remains to be done, many governments 

continue to remove impediments to investment. In 2005, 99 countries enacted 185 reforms to improve their 

business climates, ranging from strengthening property rights to reducing the cost of exporting and importing 

goods and services. There are success stories on every continent, from India in Asia, to Brazil in Latin America, 

to Rwanda in Africa.
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16 SECTION 2 • SU PPORT FOR TH E M U LTI LATE R AL DEVE LOPM E NT BAN 

Promoting Small Business

Small business is a key driver of growth and employment. The United States continues to urge the MDBs to 

expand their support for small business development. 

The Multilateral Investment Fund (MIF), administered by the IDB, works directly with private and 

public sector partners to strengthen the environment for business, build the capabilities and skills of 

the workforce, and broaden the economic participation of smaller enterprises. MIF financing supports 

small-and medium-size enterprise (SME) development across a range of sectors, including agriculture, 

tourism, manufacturing and services. In 2005, the MIF financed 155 technical assistance and investment projects to increase SME access to credit by developing financial institutions in rural areas, to 

increase the impact of worker remittances on development, and to help local bank and non-bank institutions develop credit vehicles such as factoring and franchising.

IFC’s technical assistance (funded by the United States and other official donors) helps small businesses 

and financial institutions to become more competitive and helps governments improve the business 

climate through the IFC family of SME facilities. IFC currently has 11 SME facilities supporting activities including: access to finance; capacity building; business enabling environment; company advisory 

assistance; business support services; and investment services. 

As part of a joint IDA/IFC Micro, Small, and Medium Enterprise (MSME) Facility for Africa, the IFC 

is helping to set up three SME equity funds in Madagascar, Kenya, and Ghana. These funds will be 

operated by Business Partners, a successful South African SME fund manager. In September 2004 the 

IFC started the Private Enterprise Partnership for the Middle East and North Africa (PEP-MENA), 

a program to promote private sector and SME development in the region that is based on a successful 

prototype in the former Soviet Union. In March 2005, the IFC launched PEP-Africa that will promote 

private sector development in Sub-Saharan Africa.

IFAD’s project supporting root and tuber farmers in Ghana, approved in September 2005, will increase 

these small farmers’ access to markets, improve their marketing and bartering skills, and strengthen 

the capacity of farmer-based organizations. The project will help these small farmers access improved 

planting material, improved crop husbandry practices, soil fertility management, and integrated pest 

management techniques. For the small root and tuber processors, the project will promote access to 

various lending instruments, including matching grants and micro-leasing, to help them improve processing technologies. 

Opening Economies To Trade

Promoting free trade is critical if developing countries are to fully participate in the global economy and to 

improve prospects for rapid poverty reduction. Studies show that the higher a country’s trade restrictions, 

the poorer the country tends to be, and that trade liberalization in developing countries tends to benefit 

poor people. Trade liberalization is central to the broader vision of private sector-led growth.

In September 2005, President Bush called on the world to recognize that we must turn to the next challenge 

on the development agenda, and that is the advancement of multilateral trade liberalization. Global trade 

liberalization has the potential to lift millions out of poverty and the United States has called on the MDBs 

to expand their work to help developing countries realize the potential of trade liberalization for reducing 

poverty. Success in the Doha Round would have a significant impact on growth in low-income countries, 

particularly in Sub-Saharan Africa. 

•

•

•

•
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In 2005, the World Bank/IDA introduced the Africa Action Plan, which recognized that the primary 

way for African countries to generate economic growth is through trade. The Action Plan aims to help 

countries identify and fix supply-side constraints that impede competitiveness such as farm-to-market 

transport, customs processes, and meeting market standards that could prevent African countries from 

realizing the gains from Doha. In addition, Bank management has committed to increase operational 

linkages between the Trade Department and other key parts of the World Bank, including the regional 

vice-presidencies, the private sector development group, and the infrastructure group.

The World Bank’s trade development work supports investment and technical assistance projects to 

help countries identify and reap the benefits from trade policy reforms. In 2005, the Bank approved 15 

new projects with trade facilitation components for a total of $381 million, focusing on infrastructure, 

services, financial systems, and helping countries prepare for WTO accession. 

In Senegal, IDA’s Agricultural Export Promotion project, which closed in FY2005, has been a key 

factor in diversifying Senegal’s export base and opening trade with Europe in mangoes and green beans. 

Since the beginning of the project, horticultural exports have tripled, increasing from 3,671 million CFA 

francs in 1998 to 9,759 million CFA francs in 2004; and the volume of exports more than doubled from 

6,592 tons in 1998 to 14,080 tons, surpassing the project completion target of 10,000 tons. 

In November 2004, the IFC Board approved a $500 million Global Trade Finance Program to address 

the lack of trade finance for companies and banks in developing markets, particularly for South-South 

(among developing countries) trade. Utilizing best practices demonstrated in a similar EBRD facility, 

the IFC program should be able to react flexibly to market demand for trade finance. The facility will 

offer partial or full guarantees to major commercial banks to cover the payment risk of smaller, local 

financial institutions. The IFC started by rolling out the program through some of its 200 partner financial institutions, and is now extending it to new partners. Thus far, the IFC has been able to sign up 

a number of banks, and it covered $2.6 million in trade transactions in the first weeks after the program 

launch in September 2005. The IFC expects that around 20% of the transactions will be for South-South 

trade and that 30% of the program’s business will be in Africa.

The AfDB has organized, in collaboration with other international organizations, a number of fora to 

promote trade. In October 2005 in Tunis, the AfDB with the World Bank, put together a workshop on 

Accelerating and Diversifying African Export Growth for high-level policy makers, including African Ministers of Trade, Ministers of Finance, and Governors of Central Banks, private sector representatives, research institutions and academicians. The AfDB has also provided support to African-wide, 

regional, and national institutions that provide trade financing to importers and exporters. However, 

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Box  • World Bank and Inter-American Development Bank Give Strong Support to the

Central American Free Trade Agreement — Dominican Republic (CAFTA-DR)

The World Bank’s timely analysis of CAFTA-DR’s benefits to the countries in the region was persuasive to a number of important stakeholders, significantly helping its adoption.

The IDB strongly supported the passage of CAFTA-DR, committing $10 million in grant funds 

to support enforcement of labor standards, environmental protection and institutional strengthening related to the treaty. The IDB’s 2005 loan pipeline and portfolio of trade-related projects 

for the CAFTA-DR countries is $1.5 billion, of which 85% supports the transition to free trade. 

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there is much more that the Bank can do to assist African economies in reducing barriers to regional 

and international trade. The United States has urged the new Bank President to make this a key priority. 

Improving Infrastructure

Investment in physical infrastructure — along with investments in education and health — is key to faster 

and sustained economic growth necessary for reducing poverty. Investment in infrastructure in developing 

countries, both public and private, has fallen significantly over the last decade, leaving many countries with 

a large infrastructure gap, which diminishes the prospects for private sector-led growth and poverty reduction. 

In his premier address to the 2005 World Bank Annual Meeting, President Paul Wolfowitz emphasized that 

“infrastructure is the lifeline to many other things: to health care, to education, to jobs, to trade.... But in 

addressing these infrastructure challenges, we need to learn the right lessons from past mistakes. Intelligent 

management of a country’s natural resources is essential to ensure that short-term gains are not made at the 

expense of long-term health of the poor and their environment.”

Improving access to infrastructure is the “lifeline to many other things” but improving quality and reliability 

is also a critical challenge that plays a key role in attracting private sector investment. The United States has 

called on the MDBs to increase the effectiveness of their support for investment in infrastructure, particularly in assisting countries to catalyze private sector investment and public-private partnerships. 

The World Bank launched the Infrastructure Action Plan to revitalize its support for infrastructure and, 

as a result, has increased lending by about $1 billion per year since 2003. Total lending for infrastructure reached over $7.4 billion in 2005, about 33% of the Bank’s total portfolio, and is expected to reach 

$10 billion by 2008, returning to the historical 40% share for infrastructure in Bank lending. Given the 

large demand to improve weak infrastructure, the action plan rightly focuses on the quality of support 

•

ACCESS TO INFRASTRUCTURE

250

200

150

100

50

0

Electricity

kwh per

20 million people

Telephone mainlines

per 1000 people

Moblie phones

per 1000 people

Roads

km per 1000 sq km

East Asia & Pacific

Europe & Central Asia

Latin America & Caribbean

Middle East & North Africa

South Asia

Sub-Saharan Africa

Source: World Development Indicators Database.
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— helping countries improve the investment climate and build public-private partnerships. Improving 

results measurement is an integral element of the infrastructure action plan. 

In May 2005, IDA supported a $15.2 million project in Senegal to upgrade electricity services. In particular, the project is aimed at increasing the electricity supply and the reliability of the services; reducing 

the costs of the electricity services; and enhancing the performance of key energy sector institutions. 

The IFC finances investment in capital equipment and basic infrastructure such as telecommunications, 

water supply and treatment, transportation, and electricity. In the Dominican Republic (DR), the IFC 

extended a guarantee of up to $15 million and a loan of up to $10 million (approved in May 2005) to 

Consorcio Energetico Punta Cana, an off-grid private electric utility in Punta Cana that included the 

DR’s first wind power facility. In Ghana, the IFC extended a $40 million loan (approved in March 2005) 

to Ghana’s leading private cellular phone company to expand its network and services, a fast-growing 

market that is leapfrogging the overwhelmed landline system.

The AfDB has focused on the development and management of water resources as one of its core areas 

of intervention because the level of water resource development and utilization in Africa is abysmally 

low. Only 3% of total renewable water resources are tapped for domestic, agricultural, and industrial 

consumption each year. Some 300 million people in Africa have no access to clean water and about 

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(Table 6) MDB Commitments by Sector

Year 2005 

Sector 

($ millions)

WBG16 Share IDB17 Share AfDB Share AsDB Share EBRD Share 15 Total Share

Agriculture, 

Fishing & 

Forestry

1,933 9% 136 2% 436 18% 1 314 5% 2 569 11% 3,389 8%

Education 1,951 9% 259 3% 163 7% 58 1% - 0% 2,431 6%

Energy & Mining 1,823 8% 1,193 16% 3 393 16% a 1,074 19% 877 17% 4 5,360 12%

Finance 1,675 8% 1,233 16% 5 313 13% 284 5% 1,690 33% 6 5,195 12%

Health & Other 

Social Services 2,216 10% 2,753 37% 7 171 7% 58 1% - 0% 5,199 12%

Industry & Trade 1,629 7% 428 6% 8 49 2% b 25 0% 649 13% 9 2,780 6%

Information & 

Communication 191 1% 32 0.4% 10 - 0% - 0% 10 146 3% 369 1%

Law & Justice & 

Public 

Administration

5,569 25% 208 3% 11 267 11% 778 13% 12 - 0% 6,822 16%

Transportation 3,138 14% 571 8% 10 303 12% 1,722 30% 10 791 16% 6,525 15%

Water, Sanitation 

& Flood 

Protection

2,180 10% 448 6% 285 11% 618 11% 13 - 0% 3,531 8%

Multisector 

Infrastructure - 0% 228 3% 111 4% 865 15% 343 7% 14 1,548 4%

Total 22,306 100% 7,489 100% 2,491 100% 5,797 100% 5,065 100% 43,148 100%

1 Includes rural development and environment lending.

2 Includes natural resource lending.

3 Does not include mining.

4 Includes energy efficiency, natural resources, and power and energy.

5 Includes multisector credit and preinvestment and capital markets.

6 Includes bank equity, bank lending, equity funds, non-bank financial

 institutions and small business finance.

7 Includes social investment, urban development, and environment.

8 Includes mining and tourism.

9 Includes manufacturing and property and tourism.

10 Communications and transportation are combined and included in 

 transportation.

11 Includes reform and public sector support, financial sector reform, fiscal

 reform, e-government, decentralization policies, modernization and admin of

 justice and parliamentary modernization.

12 Includes economic management.

13 Includes waste managment.

14 Includes municipal infrastructure.

15 Converted from Euros at rate of 1Euro = 1.1842 USD, from 12/30/05

16 World Bank Group, includes IBRD, IDA and IFC.

17 Includes IIC

a Power supply

b

 Includes industry, mining and quarrying
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313 million have no access to sanitation. To address this challenge, the AfDB, since 2004, has embarked 

on key water initiatives with the support of regional and international stakeholders — the Rural Water 

and Sanitation Initiative, the African Water Facility (AWF), and the New Partnership for Africa’s Development (NEPAD) Water and Sanitation Program within the NEPAD Infrastructure Program. 

In 2005, the AfDF financed the Baguineda Irrigation Scheme Intensification Project in Mali, which will 

generate an additional production of 7,400 metric tons per year of paddy rice, 11,200 tons of tomatoes, 

8,000 tons of onions, and 1,200 tons of maize. The project’s intended outcomes include literacy courses 

for 5,500 people, as well as training in improved production techniques, management, and marketing. 

MDB operations support investment in infrastructure, including a significant share for education, health, 

and water and sanitation. The AfDB commits a relatively large share —18% — of its resources to the agriculture sector as more than half of the population in Africa is rural-based, and agriculture continues to be 

the mainstay of the rural economy in all countries. Agricultural productivity growth, through more effective 

and modern farming practices, is essential for accelerated economic output growth in Africa. 

Predictable, transparent, and consistently enforced environmental policies are important for attracting 

private investment. The MDBs have adopted policies and procedures to incorporate environmental considerations into their analyses and operations. Technical assistance and training have helped build environmental management capacity in many countries. Environmental assessment and mitigation plans are 

routine. Inspection panels have been created to provide a public forum to resolve allegations of adverse 

impact on affected third parties. Environmental components such as energy efficiency improvements are 

now often incorporated into projects and sector programs.

Investment in infrastructure must be accompanied by improvements in governance, including effective regulatory frameworks and tariff structures, transparent management of resource revenues and environmental 

risks, and fighting corruption throughout the entire project cycle. 

Good Governance, Increasing Transparency, 

and Fighting Corruption

Good governance increases the effectiveness of assistance and promotes better use of domestic resources. 

A strong policy environment supported by accountable public institutions helps assure that funds are not 

wasted or misused, but instead deployed effectively for their intended development purpose. Improved economic governance — legal and regulatory frameworks, sound public sector expenditure management, and 

anti-corruption measures — are also necessary to promote private sector investment. 

Transparency allows public scrutiny that is essential for accountability and ensuring results. The United 

States is the strongest advocate for increasing transparency at the MDBs, and is achieving results in advancing the policy goals contained in recent legislation, including section 581 of the FY2004 Consolidated 

Appropriations Act (Division D of Public Law 108-199) (“Section 581”) and section 599B of the FY2006 

Foreign Operations Appropriations Act (Public Law 109-102 (“Section 599B”). Important steps have been 

taken, and increasing transparency continues to be a key part of the U.S. reform agenda. Broadening participation and increasing disclosure help hold the institutions accountable, both to the donor country taxpayers 

and to the citizens in recipient countries. Further progress is necessary, but important achievements have 

been made. 

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Fighting Corruption. The U.S. is committed to strenuous efforts to help prevent, detect, and punish corruption associated with development assistance provided by the MDBs. Such corrupt acts are intolerable, 

and, as custodians of taxpayer dollars intended to stimulate economic growth and reduce global poverty, 

the Treasury Department has the obligation of helping to ensure that the MDBs take all the steps necessary 

to have effective mechanisms to fight corruption in recipient countries, in bank projects, and in the institutions themselves.

Box  • Transparency and Accountability: Advancing the Policy Goals of Legislation

(Section 581 and Section 599B)

Substantial progress has been made on implementing the policy goals of Section 581. The results across 

the MDBs on the specific transparency and accountability policy goals are detailed in two reports to Congress and highlighted in the examples below. Progress is considerable, but not complete, and Treasury 

continues to advance these goals at each of the institutions. In addition, Treasury is working closely with 

the U.S. Executive Directors at the MDBs to implement the new anti-corruption and transparency policy 

goals of section 599B. 

The IDA-14 agreement helps reinforce the accountability of the World Bank by calling on its Board of 

Directors to: (1) disclose Board minutes; (2) strengthen procedures for public consultation processes; 

(3) make interim results of projects publicly available; and (4) require an independent audit or assessment of internal management controls for meeting operational objectives. IDA has agreed to make 

publicly available all individual countries’ performance (CPIA) rating scores to improve transparency 

about how countries are performing and how allocations are determined. 

The IDB’s policy on information disclosure, approved by the Board in 2003, makes publicly available 

a wide range of operations-related, financial, and institutional information. The first annual report 

on the policy’s implementation, issued in May 2005, concluded that the policy has been complied 

with, that the volume of traffic on the Bank’s web page is 30% higher since the adoption of the new 

policy, but notes that there are still challenges in improving access and implementing disclosure on a 

predictable schedule.

Under the AfDF-10 agreement, the AfDB Group continually updates its Information Disclosure Policy. In the most recent update in 2005, the AfDB Group committed to making considerably more 

information available to the public regarding proposed projects, strategies, and policies. Project briefs 

for public sector projects will be disclosed at least six months prior to Board presentation. All draft 

policy papers and country strategy papers are to be released via the AfDB website at least 50 days 

prior to formal Board consideration. In addition, the AfDB agreed to publicly release the highlights 

of Executive Board discussions. Under strong pressure from the United States, the AfDB has agreed 

to make the individual country performance ratings and components of the performance-based allocation system fully transparent, in line with IDA’s practice. 

Largely because of U.S. leadership, the AsDB continues to build on its 1995 information disclosure 

policy that ensures that key documents and other information are made available to the public. In 

April 2005, the AsDB approved a revised Public Communications Policy that provides improved 

access to documents and commits the AsDB to greater openness with stakeholders. As with the 

other multilateral development banks, the United States continues to press the AsDB to take further 

measures to increase the transparency of its internal and external operations, including release of 

policy and strategy documents and public sector loan proposals that are provided to the Board for 

consideration. 

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Fighting Corruption at Three Levels

The MDBs have taken important steps to combat corruption and the United States is at the forefront of continuing efforts to broaden and deepen those initiatives, including ensuring the full effectiveness of integrity 

units. Anti-corruption efforts remain a top priority in all of the MDBs and the Administration has worked 

closely with Congress in articulating key goals, objectives, and benchmarks for this critical agenda.

At the country level, the efforts of the United States are focused on increasing the transparency and accountability of countries’ governance systems. Sound public sector management and combatting corruption are 

critical to making development assistance, both multilateral and domestic, effective and for improving the 

business environment for private sector-led development.

 

At the project level, the United States is focused on encouraging the MDBs to conduct analyses and design 

projects in a manner that helps reduce opportunities for corruption, strengthen fiduciary standards, improve project supervision, and disclose results, all to ensure that funds are well spent. 

 

At the institutional level, the United States is focused on: improving the functioning of MDB internal control processes; assuring the independence of internal auditing; strengthening investigative mechanisms and 

whistleblower protection systems, and corporate procurement policies and procedures; as well as increasing 

disclosure and accountability of MDB operations. 

Fighting Corruption at the Country and Project Levels

In FY2005, the World Bank financed over $2.8 billion in projects to help countries improve governance 

and reduce corruption by strengthening judicial systems, instituting civil service reforms, and establishing budgetary transparency. In Georgia, the World Bank’s Country Partnership Strategy focuses 

on improving governance, supporting the Georgian Government’s anti-corruption agenda on several 

fronts. The key objectives are improving the business climate and delivery of social services; reducing opportunities for high-level corruption; and institutionalizing the anti-corruption effort to ensure 

its resilience over time. In the Philippines, a project will develop mobile courts to improve access to 

justice. These mobile courts have already released juveniles and adult detainees held without trial from 

congested jails and strengthened access to justice by socially excluded groups. 

•

Box  • World Bank Takes Strong Action Against Corruption in its Borrowing Member Countrie

The World Bank has spoken out strongly against the Government of Chad’s amending the Petroleum 

Revenue Management Law, which allocates petroleum revenue to priority sectors such as health and 

education. In addition, the World Bank has taken action to suspend disbursement of all of its loans to 

Chad. Acting on its concerns about corruption in Kenya at the cabinet level, the World Bank has delayed disbursements on approximately $265 million in loans until it is convinced that the government of 

Kenya is serious about tackling corruption. Recognizing irregularities and the possibility for corruption 

in the oil sector, the World Bank strengthened the conditions under which the Republic of Congo will 

receive debt relief under the Highly Indebted Poor Countries initiative. In order to reach completion 

point (the point at which debt relief become irrevocable), the Republic of Congo must demonstrate 

sustained performance on good governance and transparent public finances. In order to ensure transparency, oil revenues must be subject to internal controls and an accounting system for oil revenues in 

line with international standards and best practices based on successive annual audit opinions by an independent firm of international reputation and certified by the national anti-corruption commission.
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During 2005, the IDB approved 22 projects for government reform, for a total of $1.1 billion, or 15% 

of the total volume of projects approved. These include projects to strengthen economic governance 

institutions in Haiti, improve public expenditure quality in Peru, strengthen the national civil service 

department in Chile, and improve public management in Bolivia. 

At the AsDB, governance assessments are being undertaken for each borrower and will be used in preparing country assistance programs. Twenty-three countries have endorsed and drafted action plans as 

part of an Asian Development Bank-OECD Anti-Corruption Initiative for Asia and the Pacific.

The International Financial Institutions (IFIs) are also a substantial source of funding for countries’ 

efforts to strengthen their own anti-money laundering and counter-terrorism financing regimes. The 

IMF and the World Bank have delivered over 200 anti-money laundering/counter-terrorism financing 

technical assistance projects to over 125 countries. The AfDB has set up an anti-money laundering 

group to tackle systematically anti-money laundering and terrorist financing issues and is currently 

preparing a Strategy on Money Laundering and Terrorist Financing. 

Fighting Corruption at the Institutional Level

At all of the MDBs, the United States continues to press for adoption of the common MDB international 

best practice standards for procurement, such as those of the World Bank. Assuring the highest quality 

procurement standards across the MDBs is an essential element of anti-corruption efforts. 

In the IDA-14 negotiations, the United States obtained a commitment for an independent assessment of 

the World Bank’s internal controls over IDA operations and compliance with its charter and policies. 

In early 2005, the IDB overhauled its policies and procedures for procurement of goods, works, and 

consulting services. This brings the IDB in line with best practices in procurement. The United States 

secured the adoption of the strengthened procurement policies and standard documents for the IDB 

and the MIF through the negotiations of the first replenishment of the MIF.

At the AsDB, the United States has been the leading voice pressing for stronger internal controls. The 

Bank’s General Auditor has undertaken reviews of key institutional issues, such as the staff retirement 

plan, administrative expenses transactions, internal procurement, loan covenant compliance, and selected loan disbursement and borrowing transactions, with the objective of upgrading institutional effectiveness. 

In 2005, due to U.S. leadership, the AfDB Board approved the establishment of a new Anti-Fraud and 

Corruption Unit. The accompanying whistleblower protections will come to the Board in early 2006. 

Also at U.S. urging, the AfDB is now implementing the first phase of the Committee of Sponsoring 

Organizations of the Treadway Commission (COSO) internal control framework to enhance corporate 

efficiency and effectively manage and control internal risks. 

IFAD, as a result of strong U.S. pressure during the IFAD-7 replenishment negotiations, adopted a new 

Fraud and Corruption Policy under which an investigative unit, a whistleblower protection system, and 

disbarment procedures in line with those of the MDBs will be established. The policy also calls for a 

review of IFAD’s procurement guidelines to bring them up to World Bank standards and financial disclosure for IFAD staff. IFAD’s internal control framework will be strengthened according to the COSO 

model. 

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Supporting U.S. Foreign Policy Objectives 

through the MDBs 

As President Bush has said, “Poverty doesn’t cause terrorism. Being poor doesn’t make you a murderer. Most 

of the plotters of September 11th were raised in comfort. Yet persistent poverty and oppression can lead to 

hopelessness and despair. And when governments fail to meet the most basic needs of their people, these failed 

states can become havens for terror.”

— March, 2002

Increasingly, poverty appears to be both a contributor to and a consequence of conflict. The MDBs are providing critical support for economic reform in countries on the front lines of the effort of the United States 

to combat terrorism around the world, including reconstruction of Iraq and Afghanistan, and support for 

post conflict countries and fragile states to keep the peace and revitalize their economies. 

The MDBs also provide critical support in response to global and regional challenges. The World Bank, 

along with the regional development banks, is uniquely positioned to take on a host of global issues in developing countries — from avian flu and disaster assistance to combatting HIV/AIDS — playing a critical 

role in helping countries develop and implement a response. 

Reconstruction in Iraq and Afghanistan

Iraq

In November 2005, the World Bank approved its first loan to Iraq in over thirty years. The $100 million 

education project will help alleviate school overcrowding and lay the groundwork for educational reform. 

In December 2005, the IFC Board approved an investment in a greenfield cement plant in northern Iraq. 

The IFC will commit $98 million of its own money and mobilize another $112 million through its B-loan 

syndication program.

Afghanistan

The World Bank has been a key partner in the reconstruction and revitalization of the Afghan economy, 

focusing primarily on improving public administration, improving rural livelihoods by rebuilding infrastructure, and providing education and health services. As a post-conflict country, Afghanistan is expected 

to receive approximately $267 million from the World Bank over the next three years. The AsDB with the 

United Nations Development Program (UNDP), World Bank, and Islamic Development Bank, administers 

the Afghan Trust Fund. To date, the AsDB has disbursed $244 million in soft loans and technical assistance 

grants, funding transport, energy, and natural resource management projects while at the same time supporting technical assistance in governance and financial sector development. The AsDB has also established 

a resident mission in Kabul. 

At the London Donors Conference for Afghanistan in January 2006:

The World Bank announced a pledge of $1.2 billion to Afghanistan over the next 10 years. The World 

Bank’s pledge helped bring to $10.5 billion the total pledges Afghanistan received at the conference. 

The AsDB announced plans to commit an additional $400 million in concessional loans and grants for 

FY2009-FY2010, over and above the $500 million announced in Berlin in 2002. 

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Disaster Assistance for Pakistan Earthquake 

The World Bank has committed over $1 billion in support of reconstruction in the wake of the devastating earthquake that hit Pakistan in October 2005. The funds will be used to support projects that will 

help the Government of Pakistan’s efforts to reduce the immediate suffering and restore livelihoods; 

reconstruct housing; and help finance needed imports. In addition to lending, the World Bank also 

authorized a grant of $5 million for emergency earthquake relief from the IBRD Surplus Account.

The AsDB and the World Bank mobilized a joint needs assessment within one week of the earthquake 

to determine immediate assistance needs. The AsDB identified housing and health care as immediate 

needs and was able to mobilize $300 million in AsDB funding to fund efforts to meet these needs. 

Support to Stem Avian Flu

The World Bank has launched a new avian flu global facility to provide financial and technical assistance 

to individual countries. Formally called the Global Program for Avian Influenza and Human Pandemic 

Preparedness and Response (GPAI), the $500-million line-of-credit operation will coordinate action 

and co-financing with other multilateral organizations. Already the Bank is working closely with a 

number of countries, including Vietnam, where the Bank has had a $5 million project since 2004 to help 

Vietnam improve its animal and livestock surveillance capabilities. Bank experts are also working with 

counterparts in Turkey and the Kyrgyz Republic to assess the needs of those countries.

The AsDB has swiftly responded to avian flu outbreaks in the region through redirecting ongoing AsDB 

assistance for communicable diseases to examine prevention tools for stemming the spread of the flu. 

In November 2005, the AsDB released an economic impact assessment of a widespread avian flu outbreak and prepared additional lending operations to build regional surveillance tools and provide public information on how to prevent a pandemic. The AsDB has pledged $470 million to contribute to the 

global efforts to stem avian flu. 

Disaster Assistance Following the South Asia Tsunami 

Total tsunami assistance provided by the World Bank amounts to more than $750 million, of which a 

$27 million grant was provided from the IBRD’s surplus fund. The Bank was a key coordinator of the 

relief effort, and brought together 15 donors under a $525 million Multi-Donor Fund for Aceh and Nias. 

To address lagging donor disbursements in Indonesia, the World Bank in conjunction with the AsDB, 

has offered co-financing opportunities, promoted the flow of information with regular updates, and assisted with on-the-ground coordination in Indonesia. 

The IFC Board approved in March 2005 a $150 million facility to fund the rebuilding of tourism operations damaged by the December 2004 tsunami. At that point, the IFC had already identified three hotel 

chains operating in the Maldives and Thailand as beneficiaries of the facility. All three were quality 

firms that had shown an ability to remain profitable, even after the post-9/11 tourism downturn.

In response to the tsunami, the AsDB immediately established a $600 million Asian Tsunami Fund 

(ATF) to provide grant financing to all affected countries to rebuild and restore local economic activity. 

The AsDB also developed a well-received donor tracking system with the UNDP to ensure transparency 

as to how donor funds are utilized for the reconstruction efforts. 

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Within one month of the tsunami, the AfDB approved a $500,000 disaster assistance package to Seychelles and to Somalia to assist the recovery efforts from tsunami-related damage to coastal areas and 

ports. 

In 2005, IFAD committed to mobilizing $100 million in new resources for affected countries (India, 

Maldives, Indonesia, and Sri Lanka). IFAD’s projects will help the rural poor affected by the disaster to 

rebuild their communities and their livelihoods. 

Supporting Post-conflict Countries and Fragile States 

The World Bank established the Post Conflict Fund (PCF) in 1997 to help conflict-affected countries 

transition to peace and economic growth, and to pilot innovations in those areas. Today the Bank is 

actively engaged in over 35 conflict-affected countries across all regions. Through its PCF grant facility 

the Bank approved $6.1 million during 2005 to support countries affected by conflict or in the transition from conflict to peace. The Africa region receives the most funding, with 42% of the amount of 

approved proposals. 

To address the particular needs of fragile states, the World Bank developed the Low-Income Countries 

Under Stress (LICUS) Initiative. Traditional aid programs have not worked in fragile state environments. Total disengagement has proven risky, perpetuating poverty and failing to prevent cross-border spillovers with adverse regional and global consequences — such as conflict, organized crime, and 

epidemic diseases. For the fragile states the Bank established the LICUS Implementation Trust Fund 

with an initial allocation of $25 million, to support governance improvements and social service capacity-building, primarily for countries in non-accrual status and unable to obtain regular IDA financing. 

Countries such as Liberia, Haiti, Central African Republic, and Angola have all benefited from LICUS 

funding. 

In response to strong U.S. leadership, the AfDB established a new Post-Conflict Country Facility (PCCF) 

for assisting post-conflict countries. The AfDB will now have the capacity to help countries clear their 

arrears — in conjunction with sister international financial institutions — in order to regain access to 

new assistance for reconstruction and rehabilitation of their conflict-torn economies. Liberia could 

benefit from the PCCF over the next 12 months. 

Fighting HIV/AIDS 

In the last five years, the World Bank has committed $1.88 billion through grants, loans, and credits to 

programs to fight HIV/AIDS. Total Bank lending for HIV/AIDS since 1989 is over $2.7 billion. An 

independent evaluation of the Bank’s interventions on HIV found that the “World Bank’s assistance has 

induced governments to act earlier or in a more focused and cost-effective way.” The World Bank coordinates its interventions with other donors, focusing on the development of national strategies to fight 

HIV/AIDS and building institutional capacity to implement them effectively. 

The AfDB has intensified support to its regional member countries by mainstreaming HIV/AIDS prevention and control activities in sector projects and programs, as well as promoting stand-alone country-specific and sub-regional initiatives. The AfDB’s contribution thus far in the fight against HIV/AIDS 

is estimated to be over $750 million. The AfDB is also among the initiating partners of AIDS in Africa 

— Scenarios for the Future — a project which will enable governments and development partners to 

make strategic choices and define their activities accordingly to overcome the challenges posed by HIV/

AIDS. 

 

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27 SECTION 3 • SU PPORT FOR DE BT R ESTR UCTU R I N G PROG R A

FY2006

Appropriation

FY2007

Treasury Request

$64,350,000 $182,799,000

Support for Debt Restructuring Programs

For FY2007, the Administration has requested $182.8 million for bilateral Heavily Indebted Poor Countries (HIPC) and poorest country and Tropical Forest Conservation Act (TFCA) debt reduction programs. 

Under the enhanced HIPC initiative, at least $175 million of the requested funding is required to complete 

U.S. bilateral debt reduction for the Democratic Republic of the Congo (DRC) in FY 2007, when DRC is 

expected to reach its Completion Point1. The remainder of the request will be used for TFCA debt programs 

or for other potential HIPC-related debt reduction costs (for countries such as Liberia and Sudan).

The enhanced HIPC initiative was launched to provide deeper, broader, and faster debt reduction for the 

poorest heavily indebted countries committed to economic reform and poverty reduction. The HIPC program was designed to help these countries achieve debt sustainability. For countries that complete the HIPC 

process, based on performance on economic policies and poverty reduction efforts, the landmark Multilateral Debt Relief Initiative (MDRI) aims to achieve debt sustainability more conclusively, and end the lendand-forgive cycle, by providing 100% debt cancellation on obligations to the International Monetary Fund 

(IMF), the International Development Association (IDA), and the African Development Fund (AfDF). 

The Tropical Forest Conservation Act (TFCA) authorizes debt relief for low and middle-income countries 

with tropical forests to support conservation of endangered forests. Under the TFCA, eligible countries can, 

through negotiation with the United States, treat a portion of their U.S. debt by engaging in one or more of 

the following activities: a debt buyback; a debt swap with an eligible third party (usually an international 

environmental non-governmental organization (NGO)); or a debt reduction/restructuring. Resulting local 

currency payments are used to establish a Tropical Forest Fund or equivalent mechanism in the country 

that will in turn make grants to local NGOs and other entities engaged in a variety of forest conservation 

activities. The United States uses appropriated funds to pay for the budget cost of this debt reduction/redirection.

Recent Accomplishments in Support of U.S. Objectives

Achievement of an unprecedented Paris Club debt reduction agreement for Iraq. Creditors agreed 

to 80% debt reduction, tied to economic performance. This deep debt reduction is needed to relieve 

Iraq of its massive Saddam-era debt burden and pave the way for economic recovery and growth. The 

United States went beyond the Paris Club framework to forgive all $4 billion in U.S. claims on Iraq;

Successful negotiation of debt deferral and rescheduling agreements for Indonesia and Sri Lanka in 

the Paris Club, to help these countries devote more resources to recovery and reconstruction following 

the tsunami disaster;

1A HIPC country reaches its Completion Point when it meets a pre-determined set of key conditions, which enables it to receive irrevocable 

stock of debt reduction.

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28 SECTION 3 • SU PPORT FOR DE BT R ESTR UCTU R I N G PROG R AM

Agreement on an innovative debt restructuring for Nigeria in the Paris Club. In the context of a debt 

reduction and buyback agreement that will eliminate all of Nigeria’s debt to Paris Club creditors, the 

United States will receive more than $350 million in payments from Nigeria, which more than offsets 

the U.S. budget cost of the debt treatment.

Under the enhanced HIPC initiative, 28 countries have now demonstrated sufficient progress on economic reform and commitment to poverty reduction to reach their Decision Points. They are benefiting from debt relief that will lower their stock of debt by two-thirds, reduce debt service ratios by nearly 

half, and allow for increased poverty reduction expenditures in areas such as basic health, education, 

and rural development.

Under TFCA, a total of nine agreements have been signed with eight countries and will generate more 

than $95 million for tropical forest conservation.

Enhanced Heavily Indebted Poor Countries 

(HIPC) Initiative

Key Facts

Debt Relief under the Enhanced HIPC Initiative

The Democratic Republic of the Congo (DRC) is projected to reach its HIPC Completion Point in 

FY2007 and therefore makes up the bulk of the FY2007 budget request. Since the United States is the 

largest bilateral creditor, other creditors will not go forward with final HIPC stock of debt reduction 

until the United States is able to participate.

As of the end of FY2005, 28 countries (see Table 7) had made sufficient progress on economic reforms 

and commitments to poverty reduction to reach their HIPC Decision Points. This enables them to benefit from relief on debt payments coming due. Eighteen of these countries have met the conditions to 

reach their HIPC Completion Points, and qualified for reduction in their stock of debt – three countries 

reached their Completion Points over the course of FY2005.

Creditors have committed to reduce the external debt of these 28 countries by about $56 billion (nominal terms) under the HIPC framework. Overall debt relief for these countries, including from additional bilateral relief provided by the United States and some other creditors, will reduce the external 

debt of these countries by about two-thirds in aggregate.

Debt service ratios for these twenty-eight countries have been cut dramatically. On average, debt service/exports ratios have been reduced from pre-HIPC levels of 16% to 8.5%. 

U.S. Leadership on the HIPC Initiative

The United States has been a leader on the enhanced HIPC initiative, which has been reflected in the 

Administration’s budget requests and Congressional actions in past years. Since FY2000, Congress has 

provided a total of $263.4 million in appropriations for bilateral HIPC debt reduction costs and $674.6 

million for U.S. contributions to the HIPC Trust Fund.2

In FY2006, Congress appropriated $44.6 million for HIPC and poorest country bilateral debt reduction 

costs; this combined with remaining funds from FY05 appropriations will be used for completing U.S. 

bilateral debt reduction for the DRC in conjunction with its HIPC Completion Point.

2 The multilateral HIPC Trust Fund helps to cover the HIPC costs of certain regional multilateral institutions.

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29 SECTION 3 • SU PPORT FOR DE BT R ESTR UCTU R I N G PROG R A

Official bilateral creditors are also expected to contribute to the HIPC Trust Fund. The United States 

has pledged roughly 22% of HIPC Trust Fund costs and has so far contributed roughly 23% of amounts 

paid in ($675 million out of $2.9 billion).

Use of HIPC Relief 

HIPC debt relief will significantly reduce HIPC qualifying countries’ annual debt service obligations, 

freeing resources for poverty reduction expenditures. Over the 2001-2005 period, total annual debt 

service savings for these countries will average $1.0 billion.

The HIPC qualifying countries are required to use the resources freed up by debt relief to support poverty reduction and economic growth. As shown in the figure below, poverty-reducing expenditures 

have increased in HIPCs in recent years. Poverty-reducing expenditures for the 28 HIPCs that have 

reached their Decision Point were almost four times as large as debt service payments in 2004.

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POVERTY-REDUCING EXPENDITURES AND

EXTERNAL DEBT SERVICE

(Weighted average, % of GDP)

10%

8%

6%

4%

2%

0%

1999 2000 2001

Poverty-reducing Expenditure Debt Service

2002 2003 2004 2005 2006 2007
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(Table 7) Debt Relief under the HIPC Initiative 

(Total HIPC relief committed, $US Millions)

Enhanced HIPC Decision Point Total HIPC Debt Reduction

In NPV Terms Nominal

Countries that have reached Completion Point (18)

Benin July 2000 265 460

Bolivia* Feb. 2000 1,302 2,060

Burkina Faso* June 2000 553 930

Ethiopia Nov. 2001 1,982 3,275

Ghana Feb. 2000 2,186 3,500

Guyana* Nov. 2000 591 1,353

Honduras July 2000 556 900

Madagascar Dec. 2000 814 1,500

Mali* Sept. 2000 539 895

Mauritania Feb. 2000 622 1,100

Mozambique* April 2000 2,023 4,300

Nicaragua Dec. 2000 3,308 4,500

Niger Dec. 2000 664 1,190

Rwanda Dec. 2000 452 800

Senegal June 2000 488 850

Tanzania March 2000 2,026 3,000

Uganda* Feb. 2000 1,003 1,950

Zambia Dec. 2000 2,499 3,850

Countries that have reached Decision Point (10)

Burundi Aug. 2005 826 1,472

Cameroon Oct. 2000 1,260 2,800

Chad May 2001 170 260

Congo, Dem. Rep. July 2003 6,311 10,389

Gambia Dec. 2000 67 90

Guinea Dec. 2000 545 800

Guinea-Bissau Dec. 2000 416 790

Malawi Dec. 2000 643 1,000

Sao Tome & Principe Dec. 2000 97 200

Sierra Leone March 2002 600 950

Total HIPC 33,071 56,367

* Countries that received a portion of debt relief under the original HIPC Initiative. 

Countries with Decision Point Expected in 

2006 or later (8) Other HIPCs (6)

Central African Republic Liberia Sustainable Debt Levels without HIPC Relief

Comoros Somalia Angola Vietnam

Congo, Rep. Togo Kenya Yemen

Cote d’Ivoire Legislation Prevents the U.S. from Reducing Debt of:

Laos Burma Sudan

Source: IMF/World Bank, Heavily-Indebted Poor Countries (HIPC) Initiative – Status of Implementation, August 22, 2005.
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(Table 8) TFCA Agreements

Country Year USG Cost

($US Millions)

Swap Contribution

$US Millions)

Funds Generated

($US Millions)

Bangladesh 2000 6.0 -- 8.5

El Salvador 2001 7.7 -- 14.0

Belize 2001 5.5 1.3 9.0

Peru 2002 5.5 1.1 10.6

Philippines 2002 5.5 -- 8.3

Panama I 2003 5.6 1.2 10.0

Colombia 2004 7.0 1.4 10.0

Panama II 2004 6.5 1.3 10.9

Jamaica 2004 6.5 1.3 16.0

TOTAL 55.8 7.6 97.3

Tropical Forest Conservation Act (TF

Key Facts 

In FY 2006, approximately $60 million in TFCA funding remains in the Treasury Debt Restructuring 

Account. About $30 million of this amount has been allocated to countries that have been declared eligible for TFCA. We anticipate that this funding, together with any amounts the Administration may decide to allocate to TFCA from the FY2007 budget, will fully fund all TFCA requirements in FY 2007. 

Nine TFCA agreements in eight countries (Bangladesh, El Salvador, Belize, Peru, the Philippines, Panama (two agreements), Colombia, and Jamaica) have been concluded to date. 

These agreements will generate over time more than $95 million for tropical forest conservation.

Under the TFCA debt swap mechanism, a unique public/private partnership has evolved in which various environmental organizations provide additional funds for debt reduction, increasing the size of 

individual agreements, and contributing additional expertise in the management of resulting programs. 

Six of the nine TFCA agreements so far provide for debt swaps. 

Negotiations are underway with an additional three countries — Paraguay, Guatemala, and Botswana 

— with which TFCA agreements should be completed in FY2006. Additional countries are under consideration for TFCA eligibility. 

TFCA underwent a PART (Program Assessment Rating Tool) review by the Office of Management and 

Budget in 2004, and received a rating of “results not demonstrated,” largely because that the program 

did not have performance measures in place that would enable a meaningful evaluation. As a result of 

the PART exercise, the Administration has developed and begun the implementation of an evaluation 

system that provides for consistent, on-going evaluation and reporting across local TFCA programs. 

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SECTION 4 • SUPPORT FOR TREASURY TECHNICAL ASSISTANCE PROGRAMS

FY2006

Appropriation

FY2007

Treasury Request

$19,800,000 $23,700,000

Support for Treasury Technical 

Assistance Programs 

The FY2007 request for Treasury International Affairs Technical Assistance (TIATA) is $23.7 million. The 

program provides financial advisors to countries seeking assistance in implementing significant economic 

reforms, especially during critical periods of transition to market-based economies. The program supports 

economic policy and financial management reforms, focusing on the functional disciplines of budget, taxation, government debt, financial institutions, and financial enforcement.

In FY2007, it is estimated that $5.47 million (23%) of the funds requested will be used by Treasury Technical 

Assistance to fund resident and short-term advisor projects with countries combatting money laundering 

and terrorist finance activity. A large portion of the funds requested (32%) will be used for assistance programs in sub-Saharan Africa, supporting economic and financial reforms in countries receiving HIPC debt 

relief, and other areas of emphasis. Over a quarter of the requested funds requested (25.7%) will be used to 

carry out projects in the Greater Middle East, including Afghanistan, Iraq, and Jordan. 

This level of funding will allow Treasury to pursue the following objectives:

Design and implement technical assistance projects to promote economic policy reforms, enable countries to develop market-oriented economies, strengthen governance, and build capacity in countries 

that have expressed an interest in receiving such assistance and where the United States has crucial 

foreign policy interests. 

Continue expansion of Treasury’s major commitment to provide technical assistance to reform-oriented 

countries in Sub-Saharan Africa. Existing projects operate in South Africa, the East African Community, Tanzania, Liberia, Nigeria, Ghana, Guinea, Ethiopia, Mauritius, Botswana, Malawi, and Zambia. 

Continue existing anti-corruption, anti-money laundering, and related programs to combat the financing of terrorism (AML/CFT) that are currently operating around the globe. On-going work in Latin 

America is being carried out with the Grupo de acción Financiera de América del Sud (the South 

American Financial Action Task Force-style regional body), in Bolivia, Chile, Paraguay, Peru, twentyone countries in the Caribbean, and all but two Central American countries. (The Financial Action 

Task Force [FATF] was created as a G-7 initiative to stem the flow of international money laundering 

and now has a broad international membership.) In Africa, Treasury works with the Groupe Inter-gouvernemental contre le Blanchiment en Afrique (the African FATF-style regional body), the Economic 

Community of Western African States, and the Eastern and Southern Africa Anti-Money Laundering 

Group, as well as in Senegal, Tanzania, Uganda, and Zambia. In Asia (Sri Lanka) and in Central and 

Eastern Europe (CEE) and the Former Soviet Union (FSU), including Albania and Ukraine, Treasury 

carries out AML/CFT initiatives that are financed with TIATA funds. In addition, Treasury supports 

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34 SECTION 4 • SU PPORT FOR TR EASU RY TECH N ICAL ASSISTANCE PROG R AM

the efforts of the interagency Terrorist Financing Working Group (TFWG) process by participating 

in assessment missions and performing follow-on technical assistance in countries designated by the 

TFWG as vulnerable to terrorist organizations and their funding efforts. 

Engage in technical assistance to support the legitimacy, and build the effectiveness, of governments 

operating in post-conflict situations. Policymakers have increasingly found that technical assistance 

can play a positive role in helping post-conflict governments develop fiscal operations important for 

supporting essential reconstruction activities that foster democracy. Originally deployed in Bosnia and 

Kosovo, Treasury technical assistance has been used to great effect in Afghanistan, Liberia, Haiti, and 

Sri Lanka, as these countries cope with the after-effects of armed conflict. Treasury made a major commitment to post-conflict Iraq, posting more than 60 advisors in that country during the first 18 months 

of engagement. Additional advisory activities in the banking and government debt areas in Iraq are 

being planned for FY2007.

Program Mandate

In 1991, Treasury established the Office of Technical Assistance (OTA) as the operational office through 

which it delivered financial technical assistance. Beginning with the initial appropriation from Congress in 

FY1999, Treasury created the TIATA program and expanded the reach of its technical assistance operations 

outside of its traditional base in Eastern Europe and the Former Soviet Union to include a select and limited 

number of countries in Asia and Africa, as well as Central and Latin America. It is in these last four regions, 

and, to a growing extent, the Greater Middle East, that Treasury now sees its primary responsibility for the 

future.

In the implementation of its technical assistance activities, Treasury places a priority on those countries 

where governments are committed to economic policy reform and market-oriented economies. Treasury’s 

advisory assignments are accomplished through resident or intermittent advisors who work with identified 

senior management level counterparts. Advisor assignments are limited to five core areas of government 

policy and management where Treasury has specialized expertise:

Budget policy and administration;

Tax policy and administration;

Financial institutions policy and regulation;

Government debt issuance and management; and

Financial enforcement.

Treasury’s technical assistance projects are designed to support economic objectives established by the international financial institutions (IFIs) in their country plans. Treasury also works on a cooperative basis 

with IFI technical assistance programs. Treasury projects are coordinated with the State Department and 

United States Agency for International Development (USAID) headquarters in Washington, D.C., as well 

as with individual embassies and USAID missions. Treasury is an active participant in the State/Counter 

Terrorism and State/INL led inter-agency Terrorist Financing Working Group (TFWG) that is responsible 

for coordination of technical assistance designed to counter the financing of terrorist groups. In addition, 

Treasury works with State/INL-sponsored projects designed to address money laundering, corruption, and 

other financial crimes.

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Treasury is committed to keeping the TIATA program flexible and dynamic. Projects compete for funding 

each year. The project portfolio is constantly monitored, and projects that are not achieving desired results, 

as established by objective performance measures, are phased out to free up funding for new projects. In 

addition, Treasury is committed to a philosophy of mobilizing rapidly to respond to technical assistance requests, but to limit the term of its engagement so that an assistance project does not exceed its original scope 

without establishing new or revised terms of reference. Treasury intends to use FY2007 resources to expand 

its assistance programs to new countries, in addition to extending previously initiated multi-year projects. 

Treasury will consider new projects in countries where counterparts are committed to an economic reform 

agenda and where Treasury has appropriate expertise. 

Treasury receives more requests for new technical assistance projects than can be funded with existing resources. All requests are evaluated closely to ensure that they advance the overall objectives of U.S. foreign 

and economic policy.

Key FY2005 Program Success Highlights

The five teams within OTA, each representing one of Treasury’s core disciplines, have achieved major project 

successes in FY2005. Many were the result of Treasury’s focus on economic policy reforms, anti-corruption, 

internal institutional controls, governance, and fiscal transparency. Examples include: 

Budget (internal controls, fiscal transparency, and governance)

From 2002-2004 spending in South Africa substantially exceeded the planned amounts. While the budget 

only projected a 10% increase, spending actually grew at 30% per year. This had the very unwelcome effect of reducing available funding for vital education and health initiatives. The Treasury resident budget 

advisor, working with national and regional program administrators, developed a comprehensive set of 

policies to control spending. The advisor worked also with South Africa National Treasury officials to fund 

a financial data information system throughout the provinces to monitor spending. The growth in spending for 2005 was reduced to 8%, the level for which the National Treasury had budgeted. This project was 

conducted in partnership with USAID.

Government Debt (capacity building, internal controls, and governance)

Treasury helped establish a Primary Dealer Ranking System in Uganda that gives the Central Bank a quantitative means for assessing the performance of the primary dealers. Treasury technical assistance also 

contributed to the process that enabled Uganda to receive its initial sovereign debt rating from Fitch Ratings 

Services. In addition, Treasury helped organized the first buyback of government debt in Uganda to manage rollover risk and wrote investment guidelines for the National Social Security Fund, the only source of 

long-term capital in Uganda.

Financial Enforcement 

(anti-corruption, anti-money laundering, and counter financing of terrorism)

Treasury successfully assisted the Government of Malawi by mentoring criminal tax investigators and prosecutors in the first ever large tax evasion case which ended in a conviction of the defendant. Additionally, 

Treasury’s resident enforcement advisor in Paraguay contributed greatly to the establishment of the Government of Paraguay’s FIU in 2003. This placed the country in compliance with Egmont Group standards, 

thereby securing its membership in the Egmont Group and enabling it to receive and effectively use suspicious activity reports from member-country FIUs. Paraguay’s FIU is considered one of the most capable in 

South America. 
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Financial Institutions (capacity building, governance, and fiscal transparency) 

Treasury advisors assisted in the structure of the sale of approximately $850 million of problem bank loans 

for the Savings Deposit Insurance Fund, Turkey’s deposit insurance agency. The transaction, carried out by 

a joint venture, resulted in a projected present value bid of over $300 million (more than 35% of book value) 

from Lehman Brothers and its Turkish bank partner – a significant achievement in an emerging market 

context.

Tax (fiscal transparency and capacity building) 

Treasury, in partnership with the US Embassy and USAID in Liberia, entered into an agreement to design, 

purchase, install and implement a system to control electronically all tax bills produced by the Ministry of 

Finance and cross check payments electronically with the Central Bank software system. This automated 

system will strengthen and secure the principal source of revenue of the Government of Liberia by reducing 

corruption in the present tax payment process, and build upon the sound cashier and computer infrastructure of the Central Bank. 

Post-conflict Countries/Failed-states Initiatives

Treasury has become increasingly active in providing assistance to countries in post-conflict situations and 

those that have been identified as failed states. In these engagements, Treasury has proven itself able to 

respond quickly with the placement of expert teams into inhospitable operating environments where technological infrastructure and institutional capacity are lacking. Treasury advisors have been able to make a 

marked contribution to the stabilization of the respective ministries with which they are paired.

TIATA does not provide long-term funding of expenses in post-conflict/failed-state initiatives. However, 

there are occasions when it is necessary to bridge the funding gap until alternative resources become available. Unlike other country-specific sources of funding, such as the Support for East European Democracies 

Act and the Freedom Support Act, TIATA funding is sufficiently flexible to do this.

 

Iraq and Afghanistan

During FY2005, Treasury’s technical assistance efforts in Iraq have been focused on the implementation 

of the Iraq Payments System. This is an electronic system designed to facilitate funds transfers and reconciliation of accounts between banks throughout the country and the Central Bank of Iraq. The two core 

components of the project are a real time gross settlement system and an automated clearinghouse for batch 

payments. In addition, a recently added third component involves establishment of an electronic government securities registration system. In FY2007, Treasury plans to provide advisors in the areas of banking, 

budget, and government debt.

At present, Treasury is engaged in three functional areas in Afghanistan. Treasury is supporting the Ministry of Finance through institutional strengthening and capacity building in the areas of bank restructuring, 

credit access, payments systems, and creation of non-bank financial institutions and markets (insurance, 

leasing, and mortgage finance). Treasury is also assisting the Ministry through training of Debt Management Unit personnel, developing appropriate debt tracking mechanisms and policies and procedures for 

debt management, and assisting with the development of sound cash management practices and procedures. 

Treasury plans to focus its financial enforcement technical assistance on the establishment and development 

of a Financial Intelligence Unit as a semi-autonomous unit within the Central Bank of Afghanistan. 
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Liberia

Treasury’s technical assistance to Liberia represents a comprehensive approach to improving operational 

and management capacity within key governmental institutions. The overarching goal of the engagement is 

to improve the government’s ability to generate revenue (via increased tax collection and a rationalization of 

the tax system), to create a transparent and sound government budget that reflects a measured prioritization 

of expenditures, and to transform the banking sector into an efficient means of allocating financial resources 

among productive economic activities. Due to the flexibility afforded by TIATA funding, Treasury placed a 

team of advisors on the ground in Monrovia earlier than other providers of assistance in the economic sector 

were able to do so. 

Haiti

Treasury was a “first responder” to the post-conflict situation in Haiti. Security is still unstable in the country and violence has caused some delays, but work is continuing. The Treasury financial enforcement team 

is assisting the Government of Haiti’s efforts to combat corruption and to recover substantial assets pilfered 

from that government’s treasury. The Treasury team has worked with the Unite Centrale de Renseignements 

Financiers (Central Financial Information Directory) in the identification and gathering of evidence for use 

in prosecutions in Haiti and abroad, including a Racketeer Influenced Corrupt Organization (RICO) suit 

filed in the U.S. District Court in Miami. 

The Treasury tax policy and administration team is focusing on ways to enhance management of information, reorganization of the Direction General des Impots (DGI, the tax administration), improvement of 

collection techniques, management development, and customer service. 

Program Assessment Rating Tool (PART)

Treasury’s Office of Technical Assistance (OTA) first responded to the OMB request for a PART submission 

in 2003. Since that time OTA has designed and implemented an internal Project Management Tracking 

System (PMTS) to specify measurable objectives and milestones for every technical assistance project in 

progress. In 2005, OTA integrated the PMTS process into its overall engagement system, which includes 

the Terms of Reference, Budget Request, Workplan, and Monthly Reports required for each project. In 2006 

OTA is working with OMB to enhance the overall program measures on which OTA reports PART results.

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39 AN N EX A • M DB FACT SH E E

World Bank Group

International Development Association (IDA) Request: $950.0M

The International Development Association (IDA) was founded in 1960 as the soft loan affiliate of the IBRD 

to promote sound economic management and poverty reduction among its poorest developing country members. IDA provides concessional loans and grants to the poorest countries around the world to create the 

social and economic conditions needed to achieve sustainable growth and poverty reduction. The majority of 

IDA funding comes from periodic replenishments from donor countries, though repayments from past loans, 

investment income, and transfers from World Bank net income are also important sources of IDA resources. 

The Administration has requested $950.0 million for FY2007 for the second of three payments under the U.S. 

commitment to the 14th replenishment of IDA, covering the period July 2005 through June 2008. Congress 

appropriated $940.5 million in FY06 for the first payment of the U.S. contribution to IDA14. 

Key Facts

The U.S. share of IDA-14 is approximately 13%, and in terms of voting shares the United States is the 

single largest shareholder with 11.51% of voting power. 

In 2005, IDA made commitments of $8.6 billion, representing 160 operations in 66 countries. From a 

regional perspective, the largest shares of IDA resources went to Africa with 45% and South Asia with 

33%.

IDA is now the single largest source of donor funds for basic social services in the poorest countries. In 

2005, IDA’s support for projects was targeted at human development such as education, health, water 

supply and sanitation (36%); law, justice and public administration (23%); industry (18%); infrastructure 

(14%); and agriculture and rural development (8%).

Supporting U.S. Policy Priorities

In the IDA-14 negotiations, the United States secured the following key objectives: 

Grant eligibility will be determined on the basis of debt sustainability. As a result, grants are expected to 

total approximately a third of IDA assistance;

The results measurement framework will be expanded to improve country outcomes and institutional 

accountability;

Information disclosure concerning the Bank’s activities and policies will be expanded; and 

The focus on private sector development will be improved.

IDA grants are to be extended on the basis of a country’s debt vulnerability. In 2005, IDA provided just over $2 

billion in grants. This was up from $1.6 billion in 2004 and comprised more than 23% of total 2005 assistance. 

IDA recipient countries will also benefit from the recently approved Multilateral Debt Relief Initiative, which 

becomes effective for 18 countries on July 1, 2006. 

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ANNEX A • MDB FACT SHEETS

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Measuring Results

IDA’s new results-oriented approach will increase the effectiveness of IDA’s development project and programs, specifically: (1) country outcomes will be tracked using 14 country outcome indicators; and (2) output 

indicators will be put in place measuring IDA’s contribution to country outcomes in project quality and specific 

outputs such as health and education. To begin implementation of the initiative, an interactive website was 

launched on July 1, 2005, in order to track the progress of the Results Measurement System initiated by the 

IDA-14 agreement. 

The $110 million Northern Mountains Poverty Reduction Project in Vietnam has helped bring clean water to mountain villages and improve irrigation. Water supply works now serve over 170 families in one 

mountain village – eliminating the 7km daily trek for clean water that families endured before the project. 

In addition, the completion of two irrigation systems has resulted in a doubling of the region’s rice and 

maize output from 3 tons of rice per hectare before the project to an average of 6 tons per hectare. 

Good Governance and Fighting Corruption 

The World Bank has suspended disbursement to Chad in response to the amendment of the Petroleum 

Revenue Management Law which allocates petroleum revenue to priority sectors such as health and education. 

The Bank’s Country Assistance Strategy with Georgia focuses on improving governance, a key priority for 

the government. The key objectives of World Bank engagement are to focus on areas that most affect the 

business climate; reduce opportunities for high-level corruption; and institutionalize the anti-corruption 

effort to ensure its resilience over time.

Private Sector Development and Trade 

IDA is working with the authorities in Armenia to improve competition by liberalizing trade in air and 

rail services and enhancing the regulatory framework for utilities. 

For Mozambique, IDA approved a $20 million project in December 2005 to help develop ecotourism in 

conjunction with policies and strategies aimed at improving natural resource management. 

The Africa Action Plan, introduced this year, recognizes that trade is the primary way that countries will 

achieve the sustained growth necessary to alleviate poverty. The Plan aims to help countries identify and 

fix supply side constraints such as farm-to-market transport, customs processes, and meeting market 

standards that impede competitiveness and prevent African countries from realizing gains that are anticipated from the Doha round.

Program Assessment Rating Tool (PART)

The PART evaluation conducted by OMB in 2003 gave IDA high scores in Management (100%) and Planning 

(71%) but a lower score in identifying purpose (60%). The evaluation stated that it was difficult to determine 

IDA’s effectiveness given the lack of a system to sufficiently measure, monitor, and evaluate overall results and, 

accordingly, gave IDA a low rating (33%) for results/accountability. The overall performance rating was “Adequate” and the evaluation noted that IDA manages its programs well on a project-specific level. Successful 

implementation of the IDA-14 results measurement system should give IDA better tools to track its progress 

in meeting development objectives across the board. 

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Note: Internet website: www.worldbank.org/ida; World Bank Fiscal Year: July 1 – June 30
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World Bank Group

International Bank for Reconstruction 

and Development (IBRD) Request: $0.0 

The IBRD lends at market-based rates to lower-middle and middle-income countries to finance poverty 

reduction investments and economic policy reforms. The IBRD is an AAA-rated borrower in international 

financial markets and issues bonds to fund the bulk of its lending operations. However, a substantial part of 

the IBRD’s loanable resources comes from its retained earnings and the flow of repayments on outstanding 

loans. The last general capital increase of the World Bank was agreed to in 1988, and the United States paid 

the last installment of its subscription to the IBRD’s capital in FY1996.

Key Facts

 In terms of voting rights, the United States is the single largest shareholder in the IBRD with 16.4%.

The IBRD made new loan commitments of $13.6 billion in 2005, bringing its cumulative lending commitments to $407 billion. 

During 2005, 21% of IBRD lending went for transportation, energy, and mining; 26% for law, justice, 

and public administration; 15% for education and health; 15% for finance and industry/trade; and 22% 

for agriculture, fishing, water, and sanitation. 

In 2005, 37% of new lending was for Latin America; 26% for Europe and Central Asia; 13% for East 

Asian and Pacific; 9% for the Middle East and North Africa; 15% for South Asia; and less than 1% for 

Africa.

IBRD allocable net income for 2005 was $1.252 billion. Of this, $590 million was transferred to reserves; 

$52 million to the surplus account; $400 million to IDA; and $210 million to the HIPC Trust Fund. 

IBRD capital adequacy improved in 2005, as measured by the equity-to-loans ratio which was 31.4%, a 

full 2 percentage points higher than the 29.4% at end 2004. 

Supporting U.S. Policy Priorities

Managing for Results 

In order to institute the measurable results at the institutional level, the IBRD is in the first stages of developing a system to measure performance for each Vice Presidential Unit. Once implemented, administrative 

budget allocations at the Bank will be guided on the basis of performance. 

On the country level, the results-based Country Assistance Strategy (CAS) pilot has been a great success. 

This means that all country strategies now provide a holistic view of what World Bank engagement will accomplish. The pilot was so successful that all new CASs as of Jan 1, 2005 will be results-based. 

Morocco’s CAS, approved in April 2005, lays out specific tasks in order to accomplish the over arching 

objective of an improved investment climate. Examples of specific results called for in the CAS include: 

decreasing the banking sector’s non-performing loans, and reducing job market rigidity, one of the indicators in the “Doing Business” report. 

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A $54.35 million loan to Brazil to improve incomes of rural poor through basic social and economic 

infrastructure was completed in July 2005. As a result of the project, the number of households in 

the project area lacking sanitation facilities declined by 20%. The installation of 183 rural electricity 

facilities benefited 4,140 families in the project area in the state of Bahia by powering homes, schools, 

streets, small businesses/shops, agro-processing units and pumps. The project also helped mobilize 

and strengthen 3,000 community groups to participate in the selection, preparation and operation and 

maintenance of subprojects.

As a result of the success with the measurable results initiative, portfolio performance is improving with over 

90% of all projects rated above satisfactory in FY05. In addition, quality-at-entry has improved to 92% in 

FY05 from 86% in FY04. 

Private Sector Development and Trade 

The Bank has emphasized the provision of financial and technical support on trade issues. Between FY1987 

and 2004, the Bank approved about $38 billion for loans in trade-related areas, representing 8.1% of total 

Bank lending. 

The Bank has helped advocate private sector development through its publications and research, as well. 

The Bank’s extremely timely analysis of the CAFTA-DR was persuasive to a number of important stakeholders, emphasizing the benefits of the agreement to the countries in the region and significantly facilitating its adoption. The Bank will provide further support to CAFTA countries on improving competitiveness to take advantage of the trade opportunities that CAFTA-DR will present. 

Good Governance

Recognizing that good governance is a critical prerequisite for private sector growth, World Bank made assistance available for public sector governance and rule of law in FY2005 totaling $2.83 billion.

In Argentina, the Social and Fiscal National Identification System project yielded savings of $133 million by reducing fraud and tax evasion. The project helped reconcile fiscal and social data from federal 

and provincial government agencies, which promoted transparency in the use of public funds and enhanced public sector decision-making with more reliable data. 

In the Philippines, a project to develop mobile courts strengthened access to justice. These mobile 

courts have already released juveniles and adult detainees held without trial from congested jails and 

strengthened access to justice by socially excluded groups. 

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Note: Internet website: www.worldbank.org; World Bank Fiscal Year: July 1 – June 30
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World Bank Group

Multilateral Investment Guarantee 

Agency (MIGA) Request: $0.0

The Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, was chartered 

in 1988 to encourage foreign direct investment by providing investment insurance (guarantees) against noncommercial risks (i.e., expropriation, transfer restrictions, currency inconvertibility, and political violence) 

in developing countries. It provides political risk insurance products similar to the Overseas Private Investment Corporation (OPIC), and in some cases OPIC has re-insured and co-insured MIGA projects. 

For FY2007, the Administration is not requesting any funding for MIGA.

Key Facts

The United States is the largest shareholder in MIGA with 31,304 shares or nearly 16.5% of the voting 

power, at the end of 2005.

United States investors account for 9.6% of MIGA’s gross portfolio, and MIGA has issued a total of 161 

contracts to U.S. investors for about $2.1 billion in coverage to support investment projects in developing countries. While it is difficult to accurately determine the amount of foreign direct investment 

(FDI) that MIGA projects facilitate, information submitted by the U.S. companies suggests that these 

projects have facilitated more than $7.6 billion of FDI. As of June 30, 2005, outstanding coverage for 

U.S. investors totaled $521.0 million.

During 2005, MIGA issued 62 new guarantee contracts, totaling $1.2 billion in gross coverage. This 

represented only a small increase from the $1.1 billion in contracts the previous year despite recent 

increases in FDI flows to emerging markets. Twenty-one developing member countries benefited from 

these new MIGA guarantees. Twenty-four contracts were issued in IDA-eligible countries for $703.6 

million, representing 57% of MIGA’s gross issuance in 2005 in dollar terms.

To date, MIGA has issued 773 guarantees worth $14.0 billion. MIGA’s total gross exposure outstanding 

is $5.1 billion.

MIGA paid two claims in 2005, totaling $1.54 million, to investors for losses in Argentina and Nepal. 

MIGA has paid three claims since its inception in 1988. The first claim, paid in 2000, was fully reimbursed by the government of Indonesia. 

Supporting U.S. Objectives

Managing for Results

MIGA’s success is broadly defined by the amount of foreign direct investment (FDI) that it is able to mobilize through the provision of political risk insurance. The economic success and development impact of 

individual projects are important, as well. The most recent report by MIGA’s Independent Evaluation Group 

(IEG-M) showed that MIGA has been improving its procedures to assess ex ante the development impact 

of a sponsored project.

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Note: Internet website: www.miga.org; MIGA Fiscal Year: July 1 – June 30. 

All data are as of June 30, 2005 and refer to FY05 activities, unless otherwise noted.
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Promoting Private Sector Development 

MIGA emphasizes IDA-eligible countries and other countries in Africa, issuing guarantees for 24 projects in 

IDA-eligible countries in 2005 worth $703.6 million. This included ten new projects in Sub-Saharan Africa 

worth $323 million, 255% more than the amount in 2004. MIGA now has gross exposure of $827 million, 

or 16% of its portfolio, in Sub-Saharan Africa and $2.1 billion, or 42%, in IDA-eligible countries. 

In 2005, MIGA issued coverage for nine projects supporting small and medium-sized enterprises, mostly in 

the financial sector with banks that cater to SME clients.

Technical Assistance and Advisory Services

In addition to guarantees, MIGA offers long-term technical assistance to help countries attract foreign investment and promote exports. MIGA assists countries in establishing investment promotion agencies and 

programs.

MIGA is playing a role in conflict-affected countries, most notably Afghanistan. It has cooperated with 

other members of the World Bank Group in helping to support the Afghan Investment Support Agency. 

MIGA has also set up the Afghanistan Investment Guarantee Facility to help mitigate risks for investors.

Information Dissemination

MIGA uses new technologies to disseminate information on investment opportunities and business operating conditions in developing member countries. Examples include FDIxchange, a free e-mail service that 

delivers customized information about investment opportunities to its users, and the Investment Promotion 

Network (http://www.ipanet.net), an online clearinghouse of investment opportunities and business information in emerging markets. 

Promoting good governance and fighting corruption 

MIGA has recently taken steps to improve its anti-money laundering/combatting terrorist financing (AML/

CTF) procedures. It relies on thorough due diligence of its clients, and it will also be working with the International Finance Corporation (IFC) and using IFC’s database subscription to check its prospective and 

future clients. MIGA may look at other options after it has some experience with the IFC system, but given 

its relatively small size, it may be more cost-effective to use the IFC’s system. 

Note: Internet website: www.miga.org; MIGA Fiscal Year: July 1 – June 30. 

All data are as of June 30, 2005 and refer to FY05 activities, unless otherwise noted.
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World Bank Group

International Finance Corporation (IFC) Request: $0.0

The IFC is a member of the World Bank Group. Chartered in 1956, the IFC was created to promote private sector development, foreign investment, privatization, and efficient financial markets in developing 

countries. To this end, the IFC makes loans and equity investments in private sector projects in developing 

countries for its own account, mobilizes private capital alongside its own resources, and provides advisory 

and technical assistance services to advance the development of the private sector. 

For FY2007, the Administration is not requesting any funding for the IFC.

Key Facts

The United States is the IFC’s largest shareholder, owning 23.7% of IFC’s capital.

The IFC is involved with private sector projects, and lends without a sovereign guarantee. Thus, the IFC 

is fully exposed to the commercial risks of its investments. For FY2005, IFC’s net income totaled $2.02 

billion, up strongly from the previous year’s $993 million. 

In FY05, the IFC committed $5.35 billion in new investments in 236 projects. In addition, it mobilized 

another $1.1 billion in capital from other sources through the B-loan program (see below).

At the end of FY05, IFC’s committed portfolio totaled $19.3 billion (net of write-off adjustment and not 

including B-loans), consisting of $14.8 billion in loans, $3.3 billion in equity investments and $1.2 billion in guarantees and other structured finance products. 

In addition to its direct operations, IFC manages a syndicated (B-loan) program under which IFC cofinances projects with commercial banks and other financial institutions, thus enabling IFC to leverage 

its resources. At the end of end FY05, outstanding commitments under the B-loan program totaled 

$5.3 billion.

Supporting U.S. Policy Priorities

Managing for Results 

The IFC recently set up a Development Effectiveness Unit (DE-Unit) that will monitor the results of IFC’s 

investments and technical assistance and advisory services (TAAS). The DE-Unit is setting up a Development Outcome Tracking System (DOTS) that will define monitorable indicators for every project or TAAS 

assignment and that will enable continuous monitoring of development impact on a project or portfolio 

basis. After a period of monitoring through DOTS, the IFC intends to release a public Annual Report on 

Development Effectiveness.

Private Sector Development

The IFC focuses on promoting private sector development through specific investments and through the 

development of sound regulatory, supervisory, and legal frameworks for the private sector in developing 

countries. To highlight the importance of investment climate and to promote reform, the IFC together with 

the World Bank initiated the “Doing Business” project (http://www.doingbusiness.org), which has devel-

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oped quantitative indicators concerning business regulations and their enforcement across 145 developed 

and developing countries that can be tracked and compared over time. 

In 2005, the IFC approved $1.1 billion in funding for micro, small and medium enterprises, including 

$1.0 billion in investments in financial intermediaries. For example, the IFC extended a $30 million loan 

to NISP, an Indonesian bank, as part of the IFC’s pilot Small Enterprise Enhanced Lending Framework 

(SELF). The pilot includes grant-funded TA to help the banks in training personnel in micro and small 

enterprise lending technology and a grant-funded performance bonus system that will reward the banks’ 

performance. 

Encouraging Private Investment in Infrastructure

In 2005, the IFC extended a $40 million loan to Ghana’s leading private cellular phone company to expand 

its network and services. Ghana’s cell phone market is growing rapidly as the country leapfrogs its overwhelmed landline system. The IFC has a municipal fund pilot program to extend finance to sub-national 

entities and leverage private capital for these entities. An example was a partial credit guarantee in 2005 for 

a private bank loan to Guatemala City that will help support local transportation infrastructure.

Promoting Good Governance, Increasing Transparency and Fighting Corruption 

IFC promotes strong corporate governance by its borrowers and beyond its direct client base. Corporate 

governance is an important component of the technical assistance provided through the IFC’s private sector 

development facilities. 

The IFC has led the World Bank Group in terms of aggressive monitoring of its clientele concerning antimoney laundering/combatting terrorist financing (AML/CTF) issues. It has introduced a computer 

screening system that uses two databases of international, national, and commercial watch lists to regularly 

screen all prospective and existing clients. In the future, all clients will be screened against both databases. 

The IFC puts project summaries and environmental impact assessments for all projects in its pipeline 

on its website, which provides the public critical information on upcoming projects. The IFC’s currently 

required disclosure period for environmental assessments, however, is not consistent with U.S. legislation. 

The IFC has proposed revising its disclosure policy to broaden the range of materials that would be released, but it has not elected to disclose individual project results. The United States has pressed for the maximum disclosure of individual project results to the extent they do not include business sensitive materials.

The IFC’s Independent Evaluation Group (IEGI) has updated its disclosure policy to publish all of its 

reports as they are distributed to the Board except for revisions to correct errors, protect information protected by disclosure agreements, and individual project evaluations.

Note: Internet website: www.ifc.org; IFC Fiscal Year: July 1 – June 30

Note: Internet website: www.ifc.org; IFC Fiscal Year: July 1 – June 30
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Global Environment Facility (GEF) Request: $56.25M 

Launched in 1991, the GEF provides partial funding (largely grants) for projects that provide global environmental benefits and simultaneously make progress to reduce poverty and support sustainable development. The GEF also serves as a financial mechanism for UN environmental conventions on biodiversity, 

climate change, persistent organic pollutants and desertification. GEF is functionally independent (but 

legally a trust fund of the World Bank), with 176 member countries, and a 32-member governing board. By 

its charter, the GEF is highly focused in what it funds—providing assistance to only the parts of projects that 

demonstrate environmental benefits with global applications. Recipients pay for local benefits and thereby 

take greater responsibility for protecting their own environment.

For FY2007, the Administration is requesting $56.25 million towards an estimated $225 million total U.S. 

pledge to the fourth replenishment of the GEF, based on the policy commitments anticipated thus far in the 

ongoing negotiations. The final U.S. pledge could be higher or lower than $225 million. Pending the outcome of the negotiations, the Administration is also requesting $23.75 million for a new regional environment program in support of the Asia-Pacific Partnership on Clean Development and Climate in the Asian 

Development Bank. The relative balance of funding between the two proposals will depend on the final 

outcome of the GEF-4 replenishment negotiations and the judgment of the United States on where the funds 

could be most effectively used to do the most good for the environment. Authorization for GEF replenishments is provided by section 526(c) of Title V of Public Law 103-306.

Key Facts

The U.S. basic share in GEF replenishments has been 21%, well above that in other MDB concessional 

windows (7-14%). 

Since its inception, GEF has approved over $6 billion in grants, leveraging over $20 billion in promised 

cofinancing to support more than 1700 projects in over 155 countries, and close to 6,000 small grants 

(up to $50,000) to NGOs and community groups in over 90 countries. 

The GEF’s projects (on a cumulative basis) fall into seven categories:

Conserving biodiversity (35.9% of its portfolio)

Expanding clean energy production and efficient energy use (33.6%)

Cleaning up international waters and protecting fisheries (14%)

Phasing out ozone-depleting chemicals (3%)

Reducing persistent organic pollutants (POPs) (2.6%)

Promoting sustainable land use (2.6%)

Cross-cutting projects (8.4%)

Top recipients are China ($454m), Mexico ($211m), Brazil ($188m), and India ($163m).

GEF-4 Replenishment

GEF-4 replenishment negotiations are currently taking place. The potential total GEF-4 commitment of the 

United States is substantially below the GEF-3 level ($430 million) because the GEF has not yet measured 

up to the standards of other international financial institutions. It was very slow to implement the reforms 

agreed in 2002 as part of the GEF-3 replenishment, and a number of key GEF-3 reforms remain uncompleted. In addition, there is not yet a consensus on the GEF-4 policy reforms needed to improve project quality, 

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portfolio management, environmental safeguards, resource allocations, transparency, anticorruption efforts 

and the overall effectiveness of the GEF. However, the Administration is still prepared to pledge a substantial sum if it is justified by new reform commitments. 

Supporting U.S. Policy Priorities

The third independent evaluation of the GEF concluded that GEF has produced significant but qualified 

results, particularly in climate change, the protection of biodiversity and the prevention of ozone depletion. 

However, it also found serious management problems:

For example, 43 completed climate change projects are estimated to have directly and indirectly avoided 

321 million metric tons of CO2 emissions. However, this was mainly due to eight projects in China. 

The bulk of the climate change projects do not appear to be directed towards achieving maximum impact and do not address major energy issues in many countries. 

The GEF has helped achieve the global goal of putting 10% of world’s land area under protection. However, it is unclear whether these projects have actually improved biodiversity. More than half of the 

completed protected area projects reported few or no positive biodiversity impacts, and other projects 

reported possibly negative impacts. There are also questions about the financial sustainability of these 

kinds of projects. 

The current quality and availability of targets, estimates, calculations, monitoring and reporting are unacceptable. Lessons learned from closed projects are not being disseminated adequately. GEF is unable 

to assess and measure the cumulative effect of the benefits of GEF projects because information systems 

are outdated and incomplete, and there are not common indicators across all focal areas.

Program Assessment Rating Tool (PART)

The PART evaluation conducted by OMB in 2004 gave a rating to the GEF of “Results Not Demonstrated,” 

in part because the GEF has not been able to develop acceptable program goals or collect data to determine 

whether it is performing. 

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Note: Internet website: www.gefweb.org; GEF Fiscal Year: July 1 – June 30
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Inter-American Development Bank Group

Inter-American Development Bank (IDB) and the 

Fund for Special Operations (FSO) Request: $0.0

The Inter-American Development Bank Group is composed of the Inter-American Development Bank 

(IDB), the Multilateral Investment Fund (MIF), the Fund for Special Operations (FSO), and the InterAmerican Investment Corporation (IIC). IIC is a legally separate corporate entity with its own charter. 

The primary goal of all the elements of the Bank Group is the reduction of poverty by promoting economic 

growth. The units of the group focus on different strategies or aspects of the primary goal, such as the FSO’s 

concentration on the poorest countries in the region.

The United States co-founded the IDB in 1959. The Bank’s primary lending window is the non-concessional 

Ordinary Capital (OC). In the last replenishment for the Bank (IDB-8) in 1994, the United States agreed to 

purchase shares of paid-in capital worth a total of $153.7 million, with subscriptions provided in six equal 

installments from 1995 through 2000. The Bank is a AAA-rated borrower in the international financial 

markets and issues bonds to fund the bulk of its OC lending programs. 

The FSO is the concessional window of the IDB and focuses on economic development in the hemisphere’s 

poorest nations: Bolivia, Guyana, Haiti, Honduras, and Nicaragua. The FSO makes concessional loans with 

interest rates of 1% to 2% and maturities of up to 40 years to help these countries address critical development needs. The FSO was established at the same time as the Bank in 1959. In 1998, after two years of negotiations, an agreement was reached on a U.S.-initiated proposal that allows a $7.5 billion program through 

2008 that is being implemented at zero additional cost to the United States. Currently the FSO allocates 

$400 million for new commitments each year to the eligible countries on a performance-based method.

For FY2007, the Administration is not requesting any additional funding for the OC nor for the FSO.

Key Facts 

The United States is the largest historical contributor to the IDB and is the largest shareholder with 30% 

of both shares and votes in the institution. The United States is also the largest contributor to the FSO, 

providing over 50% of the total of funds pledged over the history of the Fund.

In 2005, the IDB made new lending commitments of $7.0 billion and has made lending commitments 

totalling $143 billion since its inception.

FSO made 20 new loans for a total of $409.5 million, bringing the cumulative through end 2005 to a 

total of 1,173 loans for $17.5 billion.

Supporting U.S. Policy Priorities 

Making Assistance Effective and Measuring Results

Contingent Transfer Funds (CTF) Programs are income support programs where payment is tied to 

households meeting specific goals related to health or education, such as children’s attendance at school. 

Studies have shown that associated indicators (years in school or children’s height and weight) are positively 

correlated with CTF programs. IDB funded two such programs in 2005:

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Mexico: Consolidation and Expansion of the Oportunidades Human Development Program for $1.2 

billion. The facility is aimed at improving access to education, health, and nutrition. Opportunidades 

(formerly called Progressa) is the flagship CTF program used as an example of how to do things right.

Argentina: Support for Plan Familias 1 for $700 million. The project aims to strengthen and improve a 

CTF program first initiated during the financial crisis. A key component is institutional improvements 

to sharpen registry of participants, control of payments, monitoring and evaluation.

Performance Driven Loans (PDLs) set quantitative targets to achieve development goals and reimburse the 

borrower for expenditure when these targets are met. In 2005, the Bank approved two PDLs.

Colombia: A PDL for the Expanded Program on Immunization (EPI) ($133.7 million). The EPI was set 

up in Colombia in 1978 to provide children between 0 and 5 years of age and other target groups with an 

ongoing vaccination program. The bank-financed program seeks to increase the equity and timeliness 

of the EPI. The bulk of the procurement (over 95%) will be to purchase vaccines and syringes.

Private Sector Development

The Board approved 14 private-sector operations in 2005 —6 direct loans and 8 guarantees -- totaling $583 

million. Seven of the guarantees were under the $400 million regional trade finance facilitation program 

approved in 2004. Private sector projects included: airport development in Ecuador; electric network modernization in Brazil; two regional trade finance funds; and a Dominican Republic trade facilitation financing program.

A Private Sector Coordinator was selected in January 2005, with a three-year term, reporting directly to the 

President of the Bank and the Chairman of the Boards of Governors of the IDB and the IIC. The Coordinator completed a broad assessment of private sector operations in the IDB and the IIC, and has implemented 

a plan to streamline and improve private sector operations within the Bank Group.

Good Governance

During 2005, the IDB approved 22 projects for government reform, for a total of $1.1 billion, or 15% of the 

total volume of projects approved.

Peru: Public Expenditure Quality Improvement Program for $200 million. The general objective of the 

program is to improve public management and expenditure by increasing the capacity to analyze and 

monitor regulation, budget, and public investment.

Bolivia: Improve Efficiency of Public Management, an FSO project for $15 million. The goal of the 

project is to support policy measures to develop the institutional capacity needed to provide effective, 

efficient, and transparent management of public resources based on results.

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Note: Internet website: www.iadb.org; IDB Fiscal Year: January 1 – December 31
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Inter-American Development Bank Group

Multilateral Investment Fund (MIF) Request: $25.0M

The MIF, established in 1992 and administered by the Inter-American Development Bank (IDB), works directly with private sector and public sector partners to strengthen the environment for business, build the 

capabilities and skills of the workforce, and broaden the economic participation of smaller enterprises. MIF’s 

ability to partner directly with NGOs and business groups, as well as government entities, has made it an important instrument for reaching out to a broad spectrum of groups in the development process. MIF projects 

incorporate a significant degree of counterpart financing with a goal of having 50% of project cost borne by 

local counterpart contributions. The MIF is providing highly-focused support for new private sector development and privatization in Latin America and the Caribbean through provision of technical assistance on regulatory and legal reforms, re-training the workforce, increasing productivity and competitiveness of financing 

vehicles and improving the efficiency of small businesses and microenterprises.

For FY2007, the Administration is requesting $25.0 million for the first of six installments of the MIF-II replenishment. Authorization is being requested for the United States contribution of $150,000,000 to the first 

replenishment of the resources of the Multilateral Investment Fund (MIF-II), subject to obtaining the necessary appropriations.

Key Facts

The United States and Japan are the largest contributors. Each pledged $500 million of the original $1.15 

billion fund. Negotiations for the first replenishment of MIF were completed in early 2005, with the 

United States pledging $150 million out of a total of $502 million, to be paid in six equal installments 

beginning in 2007. Japan pledged $70 million to MIF-II. 

Currently, the U.S. share of the MIF is 32.1% and upon completion of the MIF-II replenishment, the U.S. 

share will be 39.3%.

In 2005, the MIF donors approved 130 technical assistance and investment projects totalling $114 million, 

of which $76 million was for 82 grant projects. Since its inception in 1992, the MIF has approved 791 

projects for a total committed value of over $1 billion. Including counterpart funds, some $2 billion has 

been committed for MIF projects throughout the region.

Supporting U.S. Policy Priorities

MIF-II Replenishment

In January 2005, the MIF Donors agreed to replenish the fund starting in 2007. Five new countries will join 

MIF II and total pledges received were $502 million. The United States was successful in reaching its objectives of improving procurement policy, instituting a results-oriented project approach, increasing efficiency, 

and instituting a sunset clause to define the termination of the MIF. It was also successful in securing MIF- II 

grant funding at MIF-I historical levels (roughly 75% of all approvals). 

Procurement — the IDB adopted a new procurement policy in early 2005. The MIF-II agreement commits MIF to use the new policy.

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Note: Internet website: www.iadb.org/mif; IDB Fiscal Year: January 1 – December 31
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Managing for Results – MIF is committed to working with the IDB’s Office of Evaluation and Oversight 

(OVE) to adapt the Project Evaluability Assessment Tool for MIF projects, to review projects ex-ante for 

their evaluability and ex-post for their effectiveness, develop indicators for measuring project innovation, 

sustainability, contribution to private sector development, and disseminate lessons learned.

Increasing Efficiency – MIF is committed to improve executing agency ability to measure results and to 

establish a monitoring system to manage project performance.

Sunset Clause – The MIF II agreement runs until December 31, 2015 and may be renewed for no more 

than one additional period of up to five years. 

Making Assistance Effective and Measuring Results

MIF is leading the IDB Group’s effort on remittances, with 21 pilot projects for $52 million committed to date. 

MIF works with other IFIs in developing better measurement of these flows (estimated at $45 billion in 2005). 

Recent highlights include: 

$366,000 for an El Salvador project “Funding for Remittances and Rural Development”; $222,000 for 

a Paraguay project “Bringing Unbanked Remittance Recipients into the Formal Financial System”; and 

$198,000 for a Guatemala project “More than Remittances” focused on improving the efficiency of remittance management.

MIF is a leading supporter of microfinance in the region, with $150 million committed to 110 projects. Next 

steps include extending services into rural areas, leasing, securitization, mortgage finance, and other financial 

mechanisms to increase financial services for microenterprises and lower income individuals. Recent highlights include:

$485,000 for a Bolivia project “Promotion of Microinsurance for Microentrepreneurs;” $1,430,200 for a 

Colombia project “Growing Micro, Small, and Medium-sized Enterprises thru Franchising;” $800,000 

for a project in Argentina “Consolidating the Microfinance System with Support of FONCAP (Fondo de 

Capital Social).”

Private Sector Development 

80% of MIF projects are undertaken in direct partnership with the private sector.

In 2005 MIF continued to finance projects to increase SME access to credit by developing financial institutions in rural areas, increasing the impact of worker remittances on development, and assisting bank and nonbank institutions to develop new credit vehicles such as factoring and franchising. MIF projects to support 

SME development ranged across all sectors, including agriculture, tourism, manufacturing, and services.

The IIC and the Multilateral Investment Fund strengthened ties to support SMEs signing an MOU in March 

2004 to improve support for SMEs through the financial sector. In 2005 IIC and MIF collaborated on four 

loans to microfinance lenders in Bolivia, Ecuador, El Salvador, and Nicaragua. 

The MIF continues to play a key role in the IDB’s recently-launched Business Climate Initiative (BCI). MIF 

will fund diagnostic assessments of country investment climates, with clear recommendations for addressing 

issues raised in the assessments.

Improving Transparency

In order that lessons learned from projects are disseminated as widely as possible, MIF II will make public 

Project Performance Monitoring Reports and Project Completion Reports, which is a first for a multilateral 

development institution.

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Note: Internet website: www.iadb.org/mif; IDB Fiscal Year: January 1 – December 31
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Inter-American Development Bank Group

Inter-American Investment Corporation (IIC) Request: $ 0.0

The Inter-American Investment Corporation (IIC) was established in 1984 to promote private small and 

medium-size enterprises (SMEs) in Latin American and the Caribbean. Through a combination of direct 

loans to, and equity investments in, individual companies, lending through private local banks, and participation in regional equity funds, the IIC helps SMEs obtain affordable capital to start up, expand, or modernize their operations.

For FY2007 the Administration is not making any request for the IIC.

Key Facts

The United States is the largest single shareholder in the IIC, with 25% of the total shares. The U.S. commitment in the first general capital increase, approved in December 1999, was for $125 million out of a 

total increase of $500 million.

In 2005, the IIC approved 37 projects totalling $341 million. In 2005, IIC approved the Financial Intermediaries Program (FIP) aimed at increasing lending to financial institutions for on-lending to SMEs, 

approving $165 million of loans to financial intermediaries and $94m in guarantee and co-lending 

programs.

Since its inception, the IIC has approved 388 projects, totalling $2.258 billion. Of these, 154 projects, 

representing $813 million, are under implementation. To date, the IIC has disbursed over $197 million for equity investments (directly to SMEs or financial institutions and also to SMEs through private 

equity funds).

Supporting U.S. Policy Priorities 

Making Assistance Effective and Measuring Results

IIC has implemented a project evaluation system based on guidelines developed by the Evaluation Cooperation Group of the MDBs.

IIC’s evaluation function includes project self-evaluation by IIC’s investment officers and independent evaluation by the IDB’s Office of Evaluation and Oversight (OVE). 

In 2005 OVE provided two reports to the IIC’s Board of Directors: the Third Independent Evaluation Report and the Action Plan for Enhancing Evaluability of IIC Program Initiatives and Business Plans. IIC is 

working with OVE, in the context of the Action Plan, to modify the IDB’s ex post contract reporting to be 

applicable to private sector projects.

Private Sector Development

The IIC and the Multilateral Investment Fund strengthened ties to support SMEs signing an MOU in March 

2004 to improve support for SMEs through the financial sector. 

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In 2005 IIC and MIF collaborated on four loans to microfinance lenders in Bolivia, Ecuador, El Salvador, and Nicaragua.

Latin American Agribusiness Development Corporation – IIC participation of $6 million in the facility will help promote private sector investment and employment in the rural areas of Latin America 

and the Caribbean through investments in export-oriented agribusiness.

In Brazil, the IIC agreed to work with Banco Sofisa S.A. in helping small and medium-sized companies 

secure financing by guaranteeing up to 50% of loans booked by Sofisa, a local bank that is almost exclusively focused on SMEs.

Improving Transparency and Fighting Corruption

IIC adopted a new Information Disclosure policy in October 2005, effective December 1, 2005. The policy 

considerably expands the scope of information to be disclosed to the public and establishes the principle that 

all information concerning the corporation and its activities should be publicly accessible unless there is a 

compelling reason for confidentiality.

To enhance implementation efficiencies and consistency of action within the IDB Group, the Board approved the IIC’s participation in the IDB’s oversight committee on fraud and corruption when allegations of 

fraud or corruption are considered.

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Asian Development Bank Group

Asian Development Bank (AsDB) Request: $23.75M

The Asian Development Bank was established in 1966. The AsDB’s hard loan window, referred to as Ordinary Capital Resources (OCR), lends at market rates to promote sustainable economic development, poverty reduction, private sector development and sub-regional cooperation in Asia. The AsDB provides loans, 

guarantees, cofinancing to governments and private sector financing. AsDB lending is financed by bond 

issues on the international financial markets and by repayments and interest earnings on existing loans. The 

AsDB has a AAA credit rating. 

The AsDB is funded through periodic capital increases and through capital market operations. In FY2000, 

the United States completed making payments in support of its subscription to the Bank’s last general capital 

increase (GCI-4). 

For FY2007, the Administration is requesting $23.75 million for a new regional environment program at 

the AsDB to achieve the aims of the Asia-Pacific Partnership on Clean Development and the Climate. This 

request is contingent upon the eventual outcome of the GEF-4 replenishment negotiations.

Key Facts

The United States is a founding member of the AsDB. The United States and Japan are the largest shareholders; each has a 15.7% share in the institution and 12.9% of the vote.

In 2005, the AsDB approved approximately $6.24 billion from the OCR window, including private sector assistance amounting to $830 million for loans, equity investments, and guarantees. The Bank mobilized approximately $7.5 billion in co-financing from official and commercial sources and nearly $200 

million for 299 technical assistance projects. 

Of the AsDB’s 65 members, 37 are developing member countries eligible for assistance from the AsDB. 

Asia-Pacific Partnership on Clean Development 

and the Climate 

The new multi-country partnership (Australia, China, India, Japan, South Korea, and the United States) was 

launched to facilitate the deployment of cleaner technologies in partner countries to support poverty reduction, enhance economic growth, improve energy security, reduce pollution for improved human health and 

a clean environment, and reduce the greenhouse gas intensity of partner countries’ economies. The FY2007 

request in support of the Asia-Pacific Partnership is contingent upon the eventual outcome of the GEF-4 

replenishment negotiations, at which a more satisfactory agreement on the outstanding policy issues than 

is currently anticipated could affect the eventual balance of funding between the two requests (GEF and 

AsDB). The form of the new program will likely be a bilateral or multilateral fund or co-financing arrangement with the AsDB, depending on the outcome of discussions with other donors, regional partners, and 

the AsDB. This amount is separate from and in addition to the United States commitment of $52 million 

requested by other U.S. agencies in support of the Partnership. 

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Supporting U.S. Policy Priorities 

Managing for Results 

A new staff incentive system was approved (in 2005) to attract and retain high caliber people and ensure 

that rewards are allocated for achieving development outcomes, instead of the quantity of loans approved. 

Private Sector Development

With strong U.S. support, the Bank has significantly expanded and diversified the scope and scale of its private sector activities. The Private Sector Operations Department (PSOD) has initiated new projects in the 

area of workers remittances, local currency financing, trade finance facilitation, and housing finance. 

In 2005, 17 private sector loans, equity investments, and guarantees totaling $753 million were approved 

compared to 16 private sector operations totaling $532 million in 2004. 

In June 2005 the Bank approved a $5.5 million investment in the Afghanistan Renewal Fund. The project 

should help attract private investors, strengthen the financial sector, and catalyze investment in small and 

medium enterprises. 

In October 2005 the Bank made a $1 million equity investment in the Small Business Guarantee and Finance Corporation to help establish a credit information bureau that will enable small and medium businesses to build up a credit history to access credit in the Philippines. 

Good Governance and Fighting Corruption

The United States has been the leading voice at the AsDB to press for stronger internal controls. The Office of General Auditor has undertaken reviews of key institutional issues, such as the staff retirement plan, 

administrative expenses transactions, internal procurement, loan covenant compliance, and selected loan 

disbursement and borrowing transactions, with the objective of upgrading institutional effectiveness.

The United States has advocated strongly for internal procurement and consulting rules reform and urged 

the AsDB to bring its procurement rules and procedures in line with international best practice standards, such as those of the World Bank. 

The Bank has put in place a new independent accountability mechanism to ensure it is responsive to 

the queries and concerns of civil society and, specifically, to those persons adversely impacted by AsDB 

projects.

Note: Internet website: www.adb.org; AsDB Fiscal Year: January 1 – December 31
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Asian Development Bank Group

Asian Development Fund (AsDF) Request: $115.3

Since 1973, the Asian Development Fund (AsDF), which is the AsDB’s concessional lending window, has 

been providing financing and policy advice to the poorest countries in the Asia-Pacific region. AsDF funds 

are primarily used by those member countries with a low per capita gross national product and limited 

debt-repayment capacity in areas such as health, environment, education, and social protection, in keeping 

with the Bank’s mandate on poverty reduction. AsDF operations are financed by periodic financial replenishments from donors, as well as repayment inflows and annual contributions from the net income of the 

AsDB. 

For FY2007, the Administration is requesting $115.3 million for the second installment of a four-year commitment under the agreement of the eighth replenishment of the AsDF (AsDF-9). The U.S. total four-year 

commitment for AsDF-9 of $461 million leverages itself over 15 times, generating a $7 billion replenishment, which will provide $1.47 billion in grant assistance.

Key Facts

The United States is a founding member of the AsDF. The United States’ AsDF-9 commitment accounted for 13.7% of total donor contributions, following Japan (35%) which is the largest contributor 

to AsDF. 

In 2005, the AsDF approved 40 loans for $1.4 billion and nearly $250 million in grant assistance. The 

key sectors of AsDF were: multisector projects (44%); agriculture and natural resources projects (17%); 

transport and communications (12%); and water, sanitation and waste management (9%). 

Since its inception, the AsDF has made total commitments of over $30 billion.

Currently, 29 countries are eligible to receive AsDF resources. The United States has consistently advocated that only the neediest countries that do not have access to other resources, such as private capital, 

should have access to AsDF resources. By decision of the AsDF donors, neither China nor India has 

access to AsDF funds, because of the large size of their economies and their access to other sources of 

financing, including capital markets. 

Supporting U.S. Policy Priorities 

AsDF-9 Replenishment

The United States achieved key policy objectives in the AsDF-9 replenishment discussions that concluded 

in May 2004: 

For the first time, the AsDB agreed to implement a 21% grants window in AsDF-9 to enable poorer 

countries access funds to boost economic development. A total of $246.6 million (16.8% of the total 

$1.47 billion for AsDF-9) has been approved for grants to date. 

As part of its institutional reforms, AsDB is taking positive steps to improve its public communications 

and disclosure policies to increase transparency. A new public communications policy is in place and 

information on project preparation is more readily accessible on the AsDB’s website.

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As a first step to enhancing development effectiveness, AsDB launched the Managing for Development 

Results (MfDR) Unit in April 2005 to oversee putting in place development indicators for borrowing 

countries and improving monitoring, measuring, reporting, and evaluation of AsDB projects. 

Measuring Results

At the country level, new country strategy and programs (CSPs) will now be results-based, which means 

more monitoring and evaluation processes and dissemination of best practices and lessons learned. 

As of December 2005, the AsDB Board of Executive Directors had endorsed five results-based CSPs for 

Bangladesh, Bhutan, Mongolia, Nepal and the Philippines and are planning for five more in 2006 (for 

Fiji Islands, Indonesia, Papua New Guinea, Uzbekistan and Vietnam). 

The October 2005 CSP for Bangladesh included a results framework for the impact of the AsDF’s program and a joint results framework that reflects the joint strategy of the AsDF, the UK, Japan, and the 

World Bank. 

Supporting Good Performers and Fighting Corruption 

AsDF’s performance-based allocation (PBA) system was approved in December 2004 and went into effect 

in January 2005. It was further strengthened by increasing the governance weight (from 30% to 50%) in 

measuring country performance. 

In Mongolia, the AsDB Board of Executive Directors approved a $10 million financial sector and governance project in November 2005 to build capacity among the regulators and also strengthen the rules 

for overseeing the financial sector. This project also includes a $1 million technical assistance element. 

Through the Technical Assistance program, advisory services are being provided to Bangladesh’s Anticorruption Commission to formulate rules to tackle corruption in the country and to strengthen its 

business process services. 

Improving Transparency 

In April 2005, the AsDB Board of Executive Directors approved a revised Public Communications Policy, 

part of the overall reform agenda aimed at achieving demonstrable improvements in effectiveness. The new 

policy provides for improved access to documents and greater openness with stakeholders.

The United States will continue to press the Bank to take further measures to increase the transparency of 

its internal and external operations, including release of Board minutes, release of policy and strategy documents and public sector loan proposals prior to Board consideration, and disclosure of more information on 

project outputs and outcomes during execution and upon completion. 

Program Assessment Rating Tool (PART)

OMB completed a PART examination of the AsDF in 2005. The AfDF received high scores in Program 

Management (89%) and Program Purpose and Design (80%) but lower scores in Strategic Planning (62%) 

and Program Results and Accountability (25%). The overall assessment rating was “Results Not Demonstrated,” largely because the proposed reforms to improve development effectiveness are under implementation and the indicators to measure results are in the process of being developed. 

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African Development Bank Group

African Development Bank (AfDB) Request: $5.02M

Established in 1964, the AfDB is the non-concessional lending window of the African Development Bank 

Group. The AfDB’s mission is to promote sustainable economic growth and reduce poverty in Africa. It 

lends at market-based rates to creditworthy, middle-income African countries with limited access to capital 

markets in order to finance key poverty reduction programs and economic policy reforms. The AfDB’s lending operations are financed by bond issues on the international financial markets – the Bank is a AAA-rated 

borrower – and by its international investment portfolio, and internally generated funds. 

The United States has been a member of the AfDB since 1983. In 1998, the Bank’s shareholders agreed on a 

35% general capital increase (GCI-5) to strengthen financial ratios and improve corporate governance. The 

agreement also increased the influence of the non-regional shareholders, including the United States. The 

total amount of the capital increase was approximately $7 billion, the U.S. share of which is 5.8%. The total 

U.S. paid-in capital commitment is $40.8 million spread over 8 years, or $5.02 million per year. 

For FY2007, the Administration is requesting $5.02 million for the final of eight annual U.S. payments under 

GCI-5. This U.S. payment leverages other donors’ commitments under GCI-5 of more than $900 million 

per year. 

Key Facts

The United States is the largest non-African shareholder, with 6.6% of the total votes, and the secondlargest shareholder overall. Nigeria is the largest shareholder with 9.0% of the total votes.

In 2005, the AfDB approved a total of $1.1 billion in loans, grants, investments, and guarantees, as well 

as another $400 million in HIPC debt reduction. The key sectors of AfDB’s loans and grants were: 

power supply 36%; 

inance 28% (includes on-lending to private sector); and

public sector management 13%.

The dominant AfDB event of 2005 was the transparent and orderly election of Mr. Donald Kaberuka, 

the former Rwandan Finance Minister. He will serve as the Bank’s new President for a five-year once renewable term. He is working to enhance the Bank’s focus on results and improving the business climate 

needed to promote private sector-led economic growth. 

Supporting U.S. Policy Priorities

Managing for Results

In 2005, the Bank rolled out a pilot of its Balanced Scorecard of six strategic themes and 35 performance 

indicators. It is expected to be implemented Bank-wide in 2006.

The Bank has also developed external performance indicators to measure its contribution toward attainment of the Millennium Development Goals and specific country objectives. 

All public and private sector projects are now designed with a matrix of project results indicators. 

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Private Sector Development

A $10 million partial guarantee to Kenya approved in 2005 will provide critical technical and marketing 

assistance to at least 400 women entrepreneurs and strengthen their access to finance on more affordable terms. The project will generate an estimated 500 new jobs and is serving as a pilot that could be 

replicated elsewhere on the continent.

A $50 million equity investment in the Emerging Markets Partnership (EMP) Africa Fund approved 

in 2005 aims for the following outcomes by the year 2010, to: (1) increase the private investment to 

GDP ratio in Africa from 20% in 2004 to 15%; (2) mobilize investments worth $4 billion; and (3) create 

32,000 jobs across the continent. 

Good Governance and Fighting Corruption

In 2005, the AfDB Board of Executive Directors approved the establishment of a new Anti-Fraud and Corruption Unit. The accompanying whistleblower protections for staff are in the final stages of development.

Also at U.S. urging, the Bank is now implementing the first phase of the COSO internal controls framework (on financial reporting) to enhance corporate efficiency and effectively manage and control internal 

risks. 

The Bank has set up an anti-money laundering group to tackle systematically anti-money-laundering and 

terrorist financing issues. In 2006, it is also preparing a Strategy on Money Laundering and Terrorist Financing. 

Improving Transparency

 Prospective project briefs for public sector projects are disclosed at least six months prior to presentation to 

the Board of Executive Directors, while all draft policy papers and country strategy papers are released via 

the AfDB website at least 50 days prior to Board presentation.

The AfDB also makes available on its website environmental assessments for projects that could have a significant impact on the environment.

In response to U.S. urging, the AfDB has agreed to publicly release the highlights of Board of Executive 

Directors’ discussions. 

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Note: Internet website: www.afdb.org; AfDB Fiscal Year: January 1 – December 31
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African Development Bank Group

African Development Fund (AfDF) Request: $135.7M

The AfDF began operations in 1974 as the concessional affiliate of the African Development Bank Group. When 

it does not provide grant financing, it provides loans on highly concessional terms (50 years maturity, including 

10 year-grace period; 0% interest, 0.75% service charge and 0.50% commitment fee) to Africa’s poorest countries. 

AfDF financing supports investments in health, education, agriculture, water supply and sanitation, and infrastructure needed for poverty reduction, and promotes basic economic policy and institutional reforms needed 

for sustainable economic growth and development. AfDF operations are financed primarily by periodic financial 

infusions from donors (replenishments), as well as repayment inflows and annual contributions from the net 

income of the AfDB. 

For FY2007, the Administration is requesting $135.7 million for the second installment of a three-year commitment under the agreement for the tenth replenishment of the AfDF (AfDF-10). The U.S. total three-year 

commitment for AfDF-10 of $407 million leverages itself more than ten-fold, generating a total $5.4 billion total 

replenishment, which provides $1.8 billion per year for grant and lending operations. 

 

Key Facts

The United States is the second-largest historical contributor to the Fund (after Japan), having paid more 

than 12% of the total cumulative contributions as of end September 2005. However, in the current AfDF-10 

replenishment, the U.S. share fell to 8.5%. 

In 2005, the AfDF approved loans and grants totalling $1.4 billion and an additional $614 million in HIPC 

debt relief. Lending to critical sectors constituted 80% of the AfDF’s financing:

transport sector 21.4%; 

agriculture and rural development 21%; 

social sector operations (education and health) 18%; and 

water supply and sanitation 20%. 

40 African countries are eligible for AfDF financial support, which has amounted to over $20 billion since 

1974. 

Supporting U.S. Policy Priorities

In the AfDF-10 replenishment, the United States secured key policy objectives:

A country’s financing terms being determined by debt sustainability with grants being expected to total more 

than one-third of AfDF total assistance; 

Enhanced AfDF development effectiveness with measurable results on the ground;

Improved focus on private sector development; 

New capacity to assist post-conflict countries in clearing arrears to the AfDB group; and

Expanded information disclosure of the Bank’s activities and policies. 

AfDF grants are now to be extended on the basis of a country’s debt sustainability. In 2005, the AfDF provided 

nearly $500 million in grants. This was up from $330 million in 2004 and comprised more than 35% of total 

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2005 assistance. AfDF recipient countries will also benefit from the recently approved Multilateral Debt Relief 

Initiative. AfDF management has been working closely with donors in order to provide debt relief retroactive to 

January 1, 2006.

Measuring Results

All AfDF operations now contain results-based matrices summarizing expected or targeted impacts and their 

timeframe, and the critical assumptions or risk factors to be monitored. Results-based Country Strategy Papers 

are now required for all AfDF countries, according to guidelines which the United States had a large role in shaping. Furthermore, the Bank has recently implemented a new Supervision Format to guide Bank staff to focus on 

results. Examples approved in 2005 include: 

Mali’s $22 million project for the Baguineda Irrigation Intensification Scheme will provide: 1) literacy courses and training in production, management and marketing for 5,500 people; and 2) concrete production 

targets in rice, tomato, onion and maize.

Uganda’s Farm Income and Forest Conservation project will increase annual household incomes from vegetables to about $610, construct 16km of market access roads, and train 7,000 farmers. 

Promoting Private Sector Development and Good Governance

Mozambique’s Financial Sector Technical Assistance Program approved in 2005 aims to strengthen the 

country’s financial system to enhance its contribution to economic growth. It will provide technical assistance to help the Government reform its banking, insurance, and pension systems, as well as implement its 

anti-money laundering legislation. 

A $3.5 million grant to Mozambique approved in 2005 will help establish six one-stop shops to improve 

service delivery through decentralization and restructuring for: identification cards; tax and social security 

services; notary services; registration certificates; and business licensing.

Ghana’s $25 million export market and quality awareness program approved in 2005 aims to increase export 

earnings from non-traditional agricultural products. It is designed to improve supply chain efficiency and 

producers’ competitiveness in export markets by enhancing productivity, promoting export marketing, improving infrastructure, and building capacity. 

Natural Disaster, Emergency Assistance, and Post-Conflict 

Tsunami: Within one month of the tsunami, AfDB had approved two $500,000 disaster assistance packages to 

assist the Seychelles and Somalia recover from tsunami-related damage to coastal areas and ports. 

Drought: In late 2005, the AfDB provided $500,000 each to five southern African countries to provide emergency assistance to drought-affected communities. 

PCCF: In response to strong U.S. leadership, the Bank established the new Post-Conflict Country Facility (PCCF) 

in 2004. Thus, the Bank now has the capacity to help countries clear their arrears to the Bank Group — in conjunction with sister IFIs — in order to regain access to its assistance in a more coherent and timely manner.

Program Assessment Rating Tool (PART)

OMB completed a PART examination of the AfDF in 2003. The AfDF received high scores in Program Management (100%) and Program Purpose and Design (80%), but lower scores in Strategic Planning (63%) and Program 

Results (33%). The total program score was 59% with an overall rating of “Results Not Demonstrated.”

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European Bank for Reconstruction and 

Development (EBRD) Request: $0.0

The EBRD was created in 1991 to foster the transition to open market-oriented economies by promoting 

private sector development, foreign investment, privatization, and efficient financial markets in Central and 

Eastern Europe and the countries of the former Soviet Union. The Bank’s countries of operation are expected to be “committed to and applying the principles of multiparty democracy, pluralism, and market economics.” The Bank also has a mandate to promote environmentally sound and sustainable development.

For FY2007, the Administration is not requesting any funding for the EBRD.

Key Facts

The United States is the single largest shareholder in the EBRD with a 10% share.

Since its inception, the EBRD has financed approximately $35.8 billion in loans and equity investments, 

contributing to investments in the region worth over $111 billion. In 2005, the EBRD committed $5.1 

billion for new projects and disbursed $2.6 billion1. 

The EBRD’s focus on private sector development continues: 74% of its cumulative finance (and 76% of 

new business in 2005) is invested in private sector projects, well over the charter requirement of 60%. 

EBRD develops the private sector though loans and equity investments in private businesses and by 

mobilizing private capital alongside its own resources.

The EBRD also provides loans for projects in the public sector, with and without sovereign guarantees, to 

promote development of market-oriented economies through commercialization and/or privatization 

of state-owned enterprises and public utilities or the restructuring of municipal services. The EBRD 

pursues its objectives through project finance operations (rather than budget support to governments), 

helping to ensure financial sustainability – that the client’s revenues can service debt and provide a return on investments made.

In 2004, eight of the EBRD’s countries of operation, which now have open market-oriented economies, 

joined the European Union. Two other countries (Romania and Bulgaria) are expected to join in 2007, 

and Croatia has begun accession negotiations.

Supporting U.S. Policy Priorities

Managing for Results

The EBRD monitors each project’s transition impact (1) prior to financing, (2) during project implementation, and (3) after project conclusion. In 2005, 85% of new projects had a “potential transition impact” rating 

of satisfactory, good, or excellent; this was above the official Bank target of 75%. During project implementation, 54% of ongoing projects are achieving substantial transition impact when measured on both potential transition impact and risk parameters, just below the 55% target. Of projects completed between 1996 

and 2005, 77% were rated either Highly Successful or Successful in achieving their transition goals.

1Results reported as of 12/31/05, based on the 2005 year-end exchange rate of US$1.18 / 1.00.

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Note: Internet website: www.ebrd.com. EBRD Fiscal Year: January 1 – December 31. 
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Promoting Private Sector Development

The EBRD has worked with the World Bank to conduct the Business Environment and Enterprise Performance Survey (BEEPS) in 1999, 2002, and 2005. The latest round covered nearly 10,000 firms across the 

EBRD’s 26 transition economies. The results of this survey are in the EBRD’s latest Transition Report.

Micro, Small, and Medium-Size Enterprise Development

With U.S. bilateral support, the EBRD has helped establish and develop a network of microfinance banks in 

South-East European countries and several other countries of operation, including Ukraine, and has committed over $175 million in on-lending funds. As a result, the U.S.-supported program has leveraged a total 

cumulative loan volume of approximately $4.2 billion with over 700,000 loans disbursed in 13 countries 

with an average loan size below $6,000. In the process, the Facility has financed the training of over 3,500 

loan officers. A similar program for Russia, with multilateral donor support, has resulted in $2.4 billion in 

cumulative loan volume, with over 270,000 loans disbursed to micro and small enterprises across 143 cities 

in Russia.

Promoting Good Governance and Fighting Corruption

With a strong push from the U.S. Director, the Audit Committee has strengthened the independence of key 

internal functions – compliance, evaluation, internal audit, and risk management.

The EBRD has scaled back operations in countries showing insufficient movement toward multiparty, pluralistic democracy. In the past year, it further curtailed operations in Uzbekistan.

Improving the Environment & Promoting Energy Efficiency

The EBRD seeks to improve environmental practices and energy efficiency in its countries of operation. 

Environmental assessments and public consultation are required for all environmentally sensitive projects. 

Such projects are expected to be in compliance with applicable regulatory requirements, include appropriate 

mitigation measures, and address relevant social issues (e.g., indigenous peoples and workers’ rights). 

Note: Internet website: www.ebrd.com. EBRD Fiscal Year: January 1 – December 31. 
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International Fund for Agricultural 

Development (IFAD) Request: $18.0M

The International Fund for Agricultural Development (IFAD) was established in 1977 as a multilateral financial institution focused on promoting rural agricultural development in poorer countries. Nearly 75% 

of the world’s 1.2 billion poorest people live in rural areas, largely as small-scale producers and subsistence 

farmers. IFAD’s specific mandate is to increase their productivity and incomes, improve their nutritional 

levels and help integrate them into larger markets. IFAD seeks to design and fund innovative and appropriately scaled programs in such areas as agricultural production, rural finance and market development. IFAD 

is the only MDB that devotes all of its resources to combatting rural poverty. In 2005, IFAD’s first President 

from an OECD country (Sweden) was elected for a second term. 

Negotiations for the seventh replenishment of IFAD resources (IFAD-7) concluded in December 2005 with 

a target replenishment level of $800 million for the three-year period, 2007-2009. The United States pledged 

$54 million, a 20% increase over the U.S. contribution to IFAD-6 and 6.75% of the target replenishment level, and achieved commitment to significant policy reforms to increase the effectiveness of the institution.

For FY2007, the Administration is requesting $18.0 million for the first of three payments to IFAD-7. Authorization of IFAD replenishments is provided by section 1001 of Public Law 99-83.

Key Facts

IFAD has 164 members and the United States is the largest shareholder. Based on pledges to the 7th 

replenishment, the U.S. accounts for over 14.2% of cumulative contributions and approximately 8.9% of 

voting power, followed by Saudi Arabia with 5.3%, Japan with 4.3%, Germany with 4.1%, the Netherlands with 3.2%, and France with 3.0%. 

Commitments in 2005 were $484.6 million for 31 new projects, of which $478.4 million were loans and 

$6.2 million project-related grants. 

To date, IFAD has financed over 707 projects in 115 countries and independent territories for total commitments of approximately $9.0 billion. These projects address such needs as agriculture and livestock 

development, micro-enterprise and rural finance, natural resource management, local capacity building, and gender mainstreaming.

Over two-thirds of IFAD loan commitments are on concessional terms (40-year maturity, 10-year grace 

period, service charge of 0.75 percent per annum). The remainder is provided on intermediate or ordinary terms. 

Supporting U.S. Policy Priorities

IFAD’s Seventh Replenishment (IFAD-7) 

The United States exercised leadership in IFAD-7 to obtain key policy reform objectives which respond to 

the findings of the independent external evaluation and advance the Administration’s overall goal of improving MDB performance through results-oriented programs.

The IFAD-7 commitments build on the reforms achieved under IFAD-6 and include: 

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Note: Internet Website: www.ifad.org; IFAD Fiscal Year: January 1 - December 31
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An Action Plan, with clear timelines, milestones, and concrete measures of performance — to increase 

IFAD’s impact through building its comparative advantage and improving operational quality and efficiency to deliver measurable results.

Human resource management reform to get the right skills and incentives to support IFAD’s mandate, 

making staff accountable for results.

Strengthened performance-based allocation system — eliminating the fixed regional allocations and 

revising the formula to reflect IFAD’s mandate to assist the rural poor — to help ensure that resources 

are allocated to those countries which can use them the most effectively. 

A debt sustainability framework, along the lines of IDA and the AfDF, that will provide higher levels of 

grants to the poorest and most debt vulnerable countries.

Strengthened anti-fraud and corruption measures in a new policy that includes establishment of an 

investigative unit and whistleblower protection system, and stronger internal controls framework. 

Increased transparency measures under a disclosure policy that will be revised in 2006. 

Managing for Results and Increasing Effectiveness

During 2005, IFAD took important steps to make its assistance more effective. In April, IFAD implemented 

a performance-based allocation system to allocate resources more effectively by rewarding better performing countries. IFAD submitted its first results measurement framework to the Executive Board and will 

report annually on its progress in improving the results and impact measuring system. A key activity in 

2005 was to ensure that the desired first and second level impact indicators are incorporated into all project 

monitoring and evaluation systems.

IFAD provided a $1.32 million grant to FIDAMERICA, a Latin American network, to establish an internet-based system for exchange of information and results among IFAD projects to systematize their 

development experiences, improve project impact, and enhance inter-project learning and knowledge 

sharing.

Private Sector Activities and Partnerships

In April 2005, IFAD approved a private sector strategy for achieving greater involvement of the private 

sector in IFAD programs. The strategy encourages policy dialogue to promote local private sector development, suggests ways to invest in operations to support local private sector development, and fosters partnerships with the private sector to leverage addition resources. 

A new $10 million project in Georgia will facilitate the access of Georgia’s mainly small and mediumscale farmers to commodity supply chains, improving the competitiveness of agribusinesses and the associated supply chains, and strengthening the capacity of selected agricultural and financial institutions 

serving private-sector agricultural market activity. 

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Note: Internet Website: www.ifad.org; IFAD Fiscal Year: January 1 - December 31
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67 AN N EX A • M DB FACT SH E E

North American Development Bank (NADBank) Request: $0.0

The North American Development Bank (NADBank), and its sister institution, the Border Environment 

Cooperation Commission (BECC), were chartered under the North American Free Trade Agreement 

(NAFTA) to address the serious environmental problems in the U.S.-Mexican border region. NADBank is 

funded equally by the United States and Mexico and started operations in FY1995. It provides financing 

(i.e., loans, guarantees, and grants) for environmental infrastructure projects that have been certified by the 

BECC and are located, in the U.S., within 100 km of the U.S.-Mexico border or, in Mexico, within 300 km 

of the U.S.-Mexico border. 

For FY2007, the Administration is not requesting any funding for NADBank. Congress has appropriated 

the full $225 million in U.S. paid-in capital and authorized the full $1.275 billion in U.S. callable capital. 

Key Facts

NADBank was created with $450 million in total paid-in capital and $2.55 billion in callable capital, 

to be subscribed equally by Mexico and the United States. To date, Mexico and the United States have 

contributed a combined total of $348.8 million to NADBank. 

90% of NADBank’s capital is dedicated to financing environmental infrastructure projects in the border region. The remaining 10% is allocated to separately-operated domestic programs in each country 

that assist communities in adjusting to the displacement of workers caused by trade liberalization. The 

United States program is called the Community Adjustment and Investment Program (U.S. CAIP). 

In 2005, NADBank approved no loans and only $7.1 million in grants for environmental infrastructure 

projects. All the grants were for water conservation.

Cumulative financing approved by NADBank for environmental infrastructure projects through December 2005:

Total loans ................................................................................................................... $ 104.6 million 

Market rate loans............................................................................................... $ 70.6 million

Low-interest rate facility (LIRF) loans......................................................................$ 34.0 million

Total grants:................................................................................................................. $ 84.0 million

Solid waste environmental program (SWEP) grants......................................$ 4.0 million

Water conservation investment fund (WCIF) grants................................... $ 80.0 million

NADBank also administers EPA-funded Border Environment Infrastructure Fund (BEIF) grants for 

drinking water and wastewater projects. BEIF grants totaled $516.6 million through December 2005. 

Supporting U.S. Policy Priorities

NADBank continues to face very difficult challenges that prevent it from fulfilling its original promise. Most 

importantly, it is seeking to do market finance in a sector that is almost always subsidized. In the United 

States, potential borrowers have access to the municipal bond market and to other subsidized finance sources such as EPA-funded state revolving funds for drinking water and waste water projects. As of December 

31, 2005, only $24 million in lending has been approved for U.S. borrowers.

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Note: Internet website: www.nadb.org: NADB Fiscal Year: April 1 – March 31
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Making Assistance Effective 

As a result of its business process review, NADBank will be developing a more systematic approach to 

measure the results of its activities in the border region. 

Cameron County Irrigation District Water Conservation Project (Project cost: $11 million; NADBank financing: $4 million grant). A new pumping station completed in 2005 will significantly reduce 

energy requirements and improve water conveyance efficiency. Annual water savings are estimated at 

over 2,000 acre-feet/year and energy savings at over 700,000 kwh/year. 

Transparency and Accountability 

Through technical assistance and a $469,019 loan, NADBank aided Puerto Peñasco in establishing a 

transparent, enforceable user fee system for residential trash collection, providing the resources for a 

first-time, financially sustainable, independent agency providing reliable sanitation service. (Project 

cost: $2.2 million.)

In support of the Mexicali, Mexico, Sanitation Program, NADBank provided $70,000 in technical 

assistance to the utility, CESPM. The TA focuses on transparent financial reporting (including audited 

financial statements using generally accepted accounting standards) and planning/financial discipline. 

In April of 2005 Fitch ratings awarded an A credit rating (Mexican national scale) to CESPM and reflected some of the results of the TA in its credit rating report. 

BECC instituted a new Performance Based Budgeting (PBB) system on January 1, 2006. This will 

allow BECC to undertake detailed cost and outcome tracking, allowing it to determine the costs of both 

internal and external projects and to measure the efficiency and effectiveness of its programs. 

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Note: Internet website: www.nadb.org: NADB Fiscal Year: April 1 – March 31
69 AN N EX B • SU M MARY TAB LES (I N $

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ANNEX B 

• SUMMARY TABLES (IN $)

Summary of Appropriations and Requests 

Treasury International Programs

FY2005-FY2007 (in $) 

FY2005 FY2006 FY2007

Approp. Total

Request

Approp. 1 Annual

Commit.

Total

Request

Multilateral Development 

Banks (MDBs):

World Bank Group

 IBRD 0.0 0.0 0.0 0.0 0.0

 IDA 843,200,000 950,000,000 940,500,000 950,000,000 950,000,000

 MIGA 0.0 1,741,515 1,287,000 0.0 0.0

 IFC 0.0 0.0 0.0 0.0 0.0

Global Environment Facility 106,640,000 107,500,000 79,200,000 56,250,000 56,250,0003

Inter-American Development 

Bank 

 IDB 0.0 0.0 0.0 0.0 0.0

 IDB/FSO 0.0 0.0 0.0 0.0 0.0

 IIC 0.0 1,741,515 1,724,100 0.0 0.0

 MIF 10,912,000 1,741,515 1,724,100 25,000,000 25,000,000

Asian Development Bank

 AsDB 0.0 0.0 0.0 23,750,000 23,750,0003

 AsDF 99,200,000 115,250,000 99,000,000 115,250,000 115,250,000

African Development Ba

 AfDB 4,067,200 5,638,350 3,601,620 5,018,416 5,018,416

 AfDF 105,152,000 135,700,000 134,343,000 135,700,000 135,700,000

European Bank for Reconstruction and Development 35,147,662 1,015,677 1,005,520 0.0 0.0

North American Development 

Bank 0.0 0.0 0.0 0.0 0.0

Int’l Fund for Agricultural 

Development 14,880,000 15,000,000 14,850,000 18,000,000 18,000,000

Total MDBs 1,219,118,862 1,335,328,572 1,277,235,340 1,328,968,416 1,328,968,416

Debt Restructuring:

HIPC TOTAL, of which: 79,360,000 44,550,0002

 Bilateral Debt Reduction 79,360,000

 HIPC Trust Fund 0.0

Tropical Forest Conservation Act 

(TFCA) 19,840,000 19,800,000

Total Debt Restructuring 99,200,000 99,800,0002 64,350,000 182,799,000

Other Accounts:

Technical Assistance 18,848,000 20,000,000 19,800,000 23,700,0

TOTAL TREASURY 

INTERNATIONAL ACCOUNTS 1,337,166,862 1,455,128,572 1,361,385,340 1,535,467,416

Totals may not add due to rounding. 

1Includes an across the board rescission of 1.0% (.01) applied to each line item, as required by P.L. 109-148, 12/30/05. 

2The amounts allocated to each category of debt restructuring are determined according to relative program urgency and need.

3While the GEF and the AsDB combined FY2007 request is $80,000,000, the balance of funding between these two institutions will be decided after the conclusion of the GEF-4 

replenishment negotiations. 

99,800,000 182,799,000 } }
ANNEX B 

• SUMMARY TABLES (IN $)

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70 AN N EX B • SU M MARY TAB LES (I N $

Summary of Arrears

Treasury International Programs

FY2000-FY2006 

(Budget Authority; in $)

ARREARS

end-FY2000 end-FY2001 end-FY2002 end-FY2003 end-FY2004 end-FY2005 end-FY2006

Multilateral Development Banks (MDBs

International Bank for 

Reconstruction and 

Development

International Development 

Association

32,140,000 62,275,000 73,015,000 78,540,000 120,727,880 327,527,880 337,027,880

Multilateral Investment 

Guarantee Agency

6,000,000 6,022,000 10,892,087 9,271,689 8,154,321 8,154,321 6,867,321

International Finance 

Corporation

Global Environment 

Facility

204,200,000 203,937,600 210,937,600 171,585,848 140,668,364 141,528,364 169,828,364

Inter-American 

Development Bank

IDB Fund for 

Special Operations

Inter-American 

Investment Corporation

9,000,000 9,055,000 16,055,000 22,822,619 47,822,619 47,822,619 46,098,519

Multilateral 

Investment Fund

98,750,000 88,772,000 88,772,000 64,341,172 39,488,672 28,576,672 26,852,572

Asian 

Development Bank

Asian 

Development Fund

100,017,050 128,175,450 133,158,400 138,908,527 98,339,611 102,139,611 118,389,611

African Development Bank 1,000,000 13,420 13,420 42,126 67,315 619,934 2,036,730

African Development Fund 220,000 220,000 10,849,144 16,789,221 29,637,211 30,994,211

European Bank for 

Reconstruction and 

Development

232,732 441,776 725,225 10,157

North American 

Development Bank

International Fund for

Agricultural Development

11,000 11,000 104.857 189,339 309,339 459,339

TOTAL BUDGET 

AUTHORITY

451,107,050 498,481,470 533,074,507 496,698,714 472,689,118 687,041,176 738,564,704