While critics of the Coronavirus Aid, Relief and Economic Security Act (CARES Act) bring up the $25 million for the John F. Kennedy Center for the Performing Arts, there is virtually no reporting of the $10.8 billion authorized for three African development banks.
Funding for the Kennedy Center came with the stipulation it would help deal with fallout from the coronavirus pandemic. There is no such restriction connected to the huge sums for the African Development Fund (ADF), the African Development Bank (AfDB) and the International Development Association (IDA)..
The ADF and the AfDB are two related organizations that are supposed to fund development and poverty eradication efforts in Africa. The IDA is a subsidiary of the World Bank that lends money to poor countries and then forces changes in their financial and social structures to promote privatization.
These agencies have been criticized for failing to be effective. For example, the average Sub-Saharan African lives on just $1 a day, while developers of infrastructure often build projects of little value to these mostly tribal countries.
In February David Malpass told the World Bank/International Monetary Fund (IMF) forum that the Asian Development Bank (ADB), the AfDB, and the European Bank for Reconstruction and Development (EBRD) have a “tendency to lend too quickly and thereby aggravate the problem of country debt”. There are also hedge fund connections to create “securitization” of loans, including paid arrangements with Mariner Investment Group.
The President of the World Bank Group, Malpass criticized the AfDB specifically for its activities in Nigeria and South Africa. He urged “greater coordination among international financial institutions to coordinate lending and maintain high standards of transparency”.
How did all this money become part of the virus bill?
The Center for Global Development (CGD) told Nancy Pelosi and Mitch McConnell in a letter that they must include funding for these groups, claiming that even after the virus is under control in the United States, it could come back if it surges in Africa.
Former Treasury Secretary Lawrence H. Summers heads the CGD board. A prominent member of the Trilateral Commission, Summers served as Treasury Secretary under President William Clinton. Other CGD board members include Judy Woodruff, Managing Editor of the PBS NewsHour. CGD was founded in November 2001 by another Trilateral leader, Fred Bergsten, ex-director of the Peterson Institute.
There are 115 total reported deaths from the virus thus far in the entire continent of Africa among its 1.216 billion population. That compares to 1,342 deaths in just New York State with 19.54 million residents. Africa is the last place to send aid to fight a virus which has killed 39,000 worldwide.
What else could Congress have done with that $10.8 billion that went to the international development banks?
We could have replaced the $9.2 billion cut from the budget for the Department of Education, which would allow us to:
- Restore programs and grants for teacher training, after-school and summer care, and aid to low-income students.
- Reinstate $1.2 billion from the 21st Century Community Learning Center program and cuts of $732 million from the Federal Supplemental Educational Opportunity Grant
- Add back Striving Readers/Comprehensive Literacy Development Grants and funding for Supporting Effective Instruction State grants of $2.3 billion.
In addition, we could restore $1.6 billion in cuts to the Department of the Interior, which eliminated 4,000 jobs, ended funding for 49 National Historic Sites and decreased funding for land acquisition and the Cooperative Endangered Species Conservation Fund.
The following is the relevant text of the bill, which was included in the original Republican draft and approved unanimously by Congress:
‘‘SEC. 31. NINETEENTH REPLENISHMENT.
‘‘(a) IN GENERAL.—The United States Governor of the International Development Association is authorized to contribute on behalf of the United States $3,004,200,000 to the nineteenth replenishment of the resources of the Association, subject to obtaining the necessary appropriations.
‘‘(b) AUTHORIZATION OF APPROPRIATIONS.—In order to pay for the United States contribution provided for in subsection (a), there are authorized to be appropriated, without fiscal year limitation, $3,004,200,000 for payment by the Secretary of the Treasury.’’.
(2) INTERNATIONAL FINANCE CORPORATION AUTHORIZATION.— The International Finance Corporation Act (22 U.S.C. H. R. 748—314 282 et seq.) is amended by adding at the end the following new section:
‘‘SEC. 18. CAPITAL INCREASES AND AMENDMENT TO THE ARTICLES OF AGREEMENT.
‘‘(a) VOTES AUTHORIZED.—The United States Governor of the Corporation is authorized to vote in favor of—
‘‘(1) a resolution to increase the authorized capital stock of the Corporation by 16,999,998 shares, to implement the conversion of a portion of the retained earnings of the Corporation into paid-in capital, which will result in the United States being issued an additional 3,771,899 shares of capital stock, without any cash contribution;
‘‘(2) a resolution to increase the authorized capital stock of the Corporation on a general basis by 4,579,995 shares; and
‘‘(3) a resolution to increase the authorized capital stock of the Corporation on a selective basis by 919,998 shares.
‘‘(b) AMENDMENT OF THE ARTICLES OF AGREEMENT.—The United States Governor of the Corporation is authorized to agree to and accept an amendment to article II, section 2(c)(ii) of the Articles of Agreement of the Corporation that would increase the vote by which the Board of Governors of the Corporation may increase the capital stock of the Corporation from a four-fifths majority to an eighty-five percent majority.’’.
(3) AFRICAN DEVELOPMENT BANK.—The African Development Bank Act (22 U.S.C. 290i et seq.) is amended by adding at the end the following new section:
‘‘SEC. 1345. SEVENTH CAPITAL INCREASE.
‘‘(a) SUBSCRIPTION AUTHORIZED.—
‘‘(1) IN GENERAL.—The United States Governor of the Bank may subscribe on behalf of the United States to 532,023 additional shares of the capital stock of the Bank.
‘‘(2) LIMITATION.—Any subscription by the United States to the capital stock of the Bank shall be effective only to such extent and in such amounts as are provided in advance in appropriations Acts.
‘‘(b) AUTHORIZATION OF APPROPRIATIONS.—
‘‘(1) IN GENERAL.—In order to pay for the increase in the United States subscription to the Bank under subsection (a), there are authorized to be appropriated, without fiscal year limitation, $7,286,587,008 for payment by the Secretary of the Treasury.
‘‘(2) SHARE TYPES.—Of the amount authorized to be appropriated under paragraph (1)—
‘‘(A) $437,190,016 shall be for paid in shares of the Bank; and
‘‘(B) $6,849,396,992 shall be for callable shares of the Bank.’’.
(4) AFRICAN DEVELOPMENT FUND.—The African Development Fund Act (22 U.S.C. 290g et seq.) is amended by adding at the end the following new section:
‘‘SEC. 226. FIFTEENTH REPLENISHMENT.
‘‘(a) IN GENERAL.—The United States Governor of the Fund is authorized to contribute on behalf of the United States H.R. 748—315 $513,900,000 to the fifteenth replenishment of the resources of the Fund, subject to obtaining the necessary appropriations.
‘‘(b) AUTHORIZATION OF APPROPRIATIONS.—In order to pay for the United States contribution provided for in subsection (a), there are authorized to be appropriated, without fiscal year limitation, $513,900,000 for payment by the Secretary of the Treasury.’’.
(5) INTERNATIONAL MONETARY FUND AUTHORIZATION FOR NEW ARRANGEMENTS TO BORROW.—
(A) IN GENERAL.—Section 17 of the Bretton Woods Agreements Act (22 U.S.C. 286e–2) is amended—
(i) in subsection (a)—
(I) by redesignating paragraphs (3), (4), and
(5) as paragraphs (4), (5), and (6), respectively;
(II) by inserting after paragraph (2) the following new paragraph:
‘‘(3) In order to carry out the purposes of a one-time decision of the Executive Directors of the International Monetary Fund (the Fund) to expand the resources of the New Arrangements to Borrow, established pursuant to the decision of January 27, 1997, referred to in paragraph (1), the Secretary of the Treasury is authorized to make loans, in an amount not to exceed the dollar equivalent of 28,202,470,000 of Special Drawing Rights, in addition to any amounts previously authorized under this section, except that prior to activation of the New Arrangements to Borrow, the Secretary of the Treasury shall report to Congress whether supplementary resources are needed to forestall or cope with an impairment of the international monetary system and whether the Fund has fully explored other means of funding to the Fund.’’;
(III) in paragraph (5), as so re-designated, by striking ‘‘paragraph (3)’’ and inserting ‘‘paragraph (4)’’; and
(IV) in paragraph (6), as so re-designated, by striking ‘‘December 16, 2022’’ and inserting ‘‘December 31, 2025’’; and
(ii) in subsection (e)(1) by striking ‘‘(a)(2),’’ each place such term appears and inserting ‘‘(a)(2), (a)(3),’’.
(B) EMERGENCY DESIGNATION.—The amount provided by this paragraph is designated by the Congress as being for an emergency requirement pursuant to section
251(b)(2)(A)(i) of the Balanced Budget and Emergency Deficit Control Act of 1985.