Earlier this week, Rep. French Hill (AR-02) introduced H.R. 9292, which would grant the Treasury Secretary the authority to waive counterproductive voting mandates at the International Financial Institutions (IFI) on a case-by-case basis, reaffirming U.S. leadership on the global stage.
"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 Certain outdated mandates can be counterproductive to U.S. interests at the IFIs.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 U.S. with targeted flexibility to pursue our strategic interests and enhance international cooperation," said Rep. Hill.
Mr. Hill introduced an earlier version of this proposal in the 116th Congress, which can be found HERE.
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 past five decades, Congress has increased its oversight and direction of the IFIs through voice-and-vote legislative mandates that dictate which projects and policies the United States can endorse. The mandates can sometimes be outdated, incongruous, or in conflict with other U.S. priorities, and can inhibit the IFIs' effectiveness.
For example, if 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project to expand clean water access in Africa, the United States might have to abstain or vote against it due to outdated legislative directives that may no longer advance our national interest or cooperation with our allies. This can thus end up isolating America in a way that prevents us from negotiating better projects and stronger results.
H.R. 9292 legislation would provide the Treasury Secretary pilot authority for 3 years to waive voice-and-vote mandates at the IFI on a case-by-case basis, allowing the United States to better pursue broader goals and enhance international cooperation. The Treasury Secretary will be required to report to Congress semiannually with a written list of waived voice-and-vote mandates, including a description justification, and determination for each. It also requires Treasury to review the existing legislative mandates and submit to Congress within 12 months of enactment recommendations to revise or waive certain voice-and-vote mandates.
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.