![]() |
||
![]() |
FROM THE OFFICE OF PUBLIC AFFAIRS May 20, 2004 John B. Taylor Chairman Kolbe, Ranking Member Lowey, Members of the Subcommittee, thank you for the opportunity to testify this morning on President Bush’s FY2005 budget request for Treasury’s international programs. Treasury’s international programs – which include the multilateral development banks (MDBs), debt reduction, and technical assistance – are critical instruments in promoting the Administration’s international economic agenda. The MDBs promote global economic growth and poverty reduction, thereby helping to create stronger markets for The FY2005 request for Treasury’s international programs totals $1.71 billion. It includes $1.43 billion to fully fund our annual The Economic Growth Agenda at the MDBs The essential goal of the MDBs is to increase economic growth and thereby reduce poverty. The MDBs achieve this goal by providing financial assistance and policy advice. The productivity growth that spurs income growth depends on economic policy and governance frameworks in recipient countries. The key elements of such policies were stated by President Bush in 2002 – to govern justly, to promote economic freedom, and to invest in people. The MDBs also support key Upon assuming office, the Bush Administration made it clear that the MDBs’ needed to reform in order to improve their effectiveness in promoting growth and reducing poverty. Implementing such reforms were one of the highest priorities of The Bush Administration has linked its financial commitment to the MDBs to the implementation of such reforms. Significant progress has been made in two key reforms: implementing a rigorous measurable results management system and providing greater grant assistance. I am pleased to report that all the institutions are currently in the process of establishing results management systems that set measurable results with timelines at the project, sector, country, and institution level. To provide a catalyst for this effort, the U.S. introduced an incentive contribution scheme as part of our contribution to the World Bank’s I am also am pleased to report that we have increased the use of grants by the MDBs to improve outcomes and avoid unsustainable debt levels in the poorest countries. Grants programs are well-established in IDA, the African Development Fund (AfDF) and the To reinforce these reforms and strengthen the accountability of the MDBs, Treasury working closely with the Congress, has set out ambitious goals to increase the transparency of the MDBs’ decision-making processes. In particular, the We have also asked that the MDBs make public the details of their internal systems for allocating assistance and establish a plan to conduct regular, independent audits of internal management controls. The private sector plays a critical role in increasing growth and creating jobs in developing countries. For the last several years, the We are urging the MDBs to scale up their private sector development assistance, in the areas of policy advice, technical assistance and financial assistance. We have asked them to develop action plans to enact investment climate reforms. This will be a theme of the G-8 Sea Island Summit in June. The The FY2005 Request There are four basic components of our FY2005 request: (1) annual funding for the MDBs, (2) arrears clearance for the MDBs, (3) debt relief, and (4) technical assistance. (1) Annual Funding for the MDBs: $1.43 billion The Administration’s request of $1.43 billion for the MDBs includes the final regular payment of our proposed contributions to the current replenishments of IDA ($1.05 billion), the AfDF ($118 million), and the AsDF ($103 million). The request also includes the third of four payments ($107.5 million) under the current Global Environment Facility (GEF) replenishment. The $1.05 billion request for IDA includes $200 million for this year’s portion of the results-based Incentive Contribution which is contingent on IDA’s meeting certain performance goals. An outside independent audit, paid for by the World Bank, will review and verify the accomplishment of these goals before these additional funds are released. (2) Arrears Clearance for the MDBs: $58.7 million The $58.7 million request for arrears clearance is part of an effort to pay down (3) Debt Relief: $200 million The $200 million request for debt relief includes: $75 million to complete the U.S. share of our Kananaskis Summit pledge of $150 million in additional contributions to the Heavily Indebted Poor Countries (HIPC) Trust Fund and $105 million will allow the United States to begin the process of 100 percent HIPC forgiveness on U.S. bilateral debt for the Democratic Republic of the Congo. The DRC has already qualified for HIPC treatment, and other creditors have already provided their share of debt reduction. The request also includes $20 million for debt relief under the Tropical Forest Conservation Act (TFCA) which provides debt relief to developing countries that commit to use the savings to protect their tropical forests. Iraq’s Given the importance of addressing (4) Technical Assistance: $17.5 million The request also includes $17.5 million for Treasury’s technical assistance programs, which form an important part of our effort to support countries facing economic developments or financial security issues, and whose governments are committed to fundamental reforms. The FY2005 request will allow us to continue current programs in the Technical Assistance in Our Office of Technical Assistance (OTA) is actively engaged in post-conflict economic restructuring activities in In Authorization Requests As part of the FY2005 budget, the Administration is seeking authorization for additional commitments to the HIPC Trust Fund in relation to President Bush’s pledge at the G-7 Kananaskis Summit, for extension of authority for HIPC bilateral debt relief, and for re-authorization of the Tropical Forest Conservation Act (TFCA). I believe that it is critical that Congress pass authorization legislation for these programs, and I look forward to working with you and other Members of Congress to achieve this. Conclusion We will continue to work with the MDBs to make progress on implementing the strong reform agenda. I ask for your support as we strengthen these institutions in ways that increase their effectiveness in utilizing financing made possible by the taxpayers of the Our debt reduction and technical assistance programs also serve key Although it is not part of the Treasury request, I cannot close without strongly urging your support for this year’s Millennium Challenge Account (MCA) request, a vital component of the President’s international economic agenda. As you know, the Millennium Challenge Corporation’s Board, on which Secretary Snow serves, recently announced the 16 countries eligible for MCA assistance, and we are moving forward aggressively with this program. We need your support to realize the President’s vision for this groundbreaking initiative. Thank you very much. I look forward to working with you on funding this request, and I would be happy to respond to your questions.
|
![]() |