America’s Voice Abroad: World Bank, IMF, and the U.S. Role in the Global Agenda
At next week’s World Bank/IMF Spring Meeting in Washington, DC, businesses and NGOs will join finance ministers and development leaders from around the world to address today’s global challenges and opportunities.
The refugee crisis in the Middle East, strengthening food security and nutrition, and promoting innovations in science and technology are among the topics that will be addressed. But what will the voice of the United States be, given the Administration’s proposal to reduce funding for multilateral development banks like the World Bank by $650 million?
Leveraging Contributions from Other Countries
America’s return on investment in international financial institutions is remarkable when you look at how U.S. contributions leverage additional contributions from other countries and donors for a greater impact at scale. In 2015, the U.S. contributed nearly $2 billion to multilateral development banks that leveraged over $120 billion in additional resources to support sustainable development. Furthermore, every $1 invested to the World Bank’s International Development Association leveraged nearly $13 in contributions from other donors and resources to help the world’s poorest countries.
Promoting America’s National Security
Nearly half of the World Bank’s International Development Association programs focus on fragile and conflict affected states which can be harbors for illicit activity and violent extremism. In Afghanistan, the World Bank supported the National Solidarity Program through which 22 million Afghans now have access to improved infrastructure including clean water and electricity. In Yemen, the World Bank supported programs have helped provide short-term employment to more than 2 million people, giving them hope rather than becoming frustrated and prone to extremism. By promoting stability and resilience, these programs reinforce America’s national security.
Helping Countries Take Responsibility for Their Own Development
The World Bank and IMF are key players in helping developing countries take more responsibility for their own development. Many developing countries still lack the infrastructure to effectively raise taxes and manage their domestic financial resources, making it extremely difficult to achieve the goal of becoming self-sufficient in the long-run.
That is why the World Bank and IMF, at the third financing for development conference in Addis Ababa, committed to increasing countries’ capacity to ensure a steady flow of government revenues so countries can sustainably fund key development programs. The good news is that many developing countries are leading the call for increasing their own resources on poverty alleviation, as seen in the more than doubling of health expenditure per capita in sub-Saharan Africa.
America’s leadership in institutions like World Bank and IMF is critical to influencing the agenda on global economic growth and development— which in turn shapes opportunities for American businesses to invest around the world. Just look at Power Africa, where a partnership with the World Bank helped General Electric generate $250 million power sector sales for export, supporting 1500 American jobs.
As China’s recent creation of the Asian Infrastructure Investment Bank showed, if the United States doesn’t lead, others will— and take jobs with them.