U.S. Rep. French Hill (R-AR) introduced a bill this week that would allow the U.S. Treasury Secretary to waive what they deem counterproductive voting mandates at the International Financial Institutions (IFI).
Currently, the U.S. leads the governance of the International Financial Institutions, which include the World Bank, International Monetary Fund, and regional development banks. Over the years, Congress has increased its oversight and direction of the IFIs through legislative mandates that dictate which projects and policies the United States can endorse. Hill says the mandates can sometimes be outdated, incongruous, or in conflict with other U.S. priorities, thus inhibiting the IFIs’ effectiveness.
Hill cited a scenario where the World Bank votes to approve a lending project to expand clean water access in Africa. The United States might have to abstain or vote against it due to outdated legislative directives that may no longer advance our national interest or cooperation with our allies. Hill says this can end up isolating the United States in a way that prevents the nation from negotiating better projects and stronger results.
His bill, H.R. 9292, would provide the Treasury Secretary pilot authority for three years to waive voice-and-vote mandates at the IFI on a case-by-case basis. Hill says this would allow the United States to better pursue broader goals and enhance international cooperation.
Further, the Treasury Secretary will be required to report to Congress semiannually with a written list of waived voice-and-vote mandates, including a justification and determination for each. It also requires Treasury to review the existing legislative mandates and submit recommendations to Congress to revise or waive certain voice-and-vote mandates.
“U.S. Representatives to the IFIs are subject to Congressional mandates that dictate which projects or policies the United States can support. Certain outdated mandates can be counterproductive to U.S. interests at the IFIs. This legislation would provide the United States with targeted flexibility to pursue our strategic interests and enhance international cooperation,” Hill said.
This legislation would apply to the following IFIs: the International Monetary Fund, International Bank Reconstruction and Development, European Bank for Reconstruction and Development, International Development Association, International Finance Corporation, Multilateral Investment Guarantee Agency, Asian Development Bank, African Development Bank, African Development Fund, Inter-American Development Bank, Inter-American Investment Corporation, and the Bank for Economic Cooperation and Development in the Middle East and North Africa.