Hosted by the U.S. Chamber of Commerce and the U.S. Global Leadership Coalition
As Prepared for Delivery
WASHINGTON – In remarks to business leaders at an event hosted by the U.S. Chamber of Commerce and the U.S. Global Leadership Coalition this afternoon, Treasury Secretary Tim Geithner discussed the importance of maintaining America’s legacy of leadership and support for the Multilateral Development Banks (MDBs). During the discussion, Secretary Geithner emphasized the role of the MDBs in fostering opportunities for U.S. businesses, creating jobs for American workers and promoting our national security interests and humanitarian goals abroad. He also expressed appreciation for the recent Senate action in support of these programs and said that he looks forward to working with Congress in this critical period to maintain America’s leadership in these vital institutions. His remarks are as follows:
“Having emerged from crisis, the global economy today still faces a great many challenges, from a difficult recovery in the United States to ongoing uncertainty in Europe. Here at home, we are intensely focused on creating jobs, increasing competitiveness, and laying a strong foundation for long-term prosperity.
“Stronger global growth is essential to achieving these objectives. If the emerging markets and developing nations grow, we can export more. We can expand our businesses. We can hire more workers. That is why U.S. leadership in global development matters—because if we are going to benefit from global growth, we need to support it.
“The multilateral development banks (MDBs) are vital contributors to this growth equation.
“First, these institutions help establish both the hard and soft economic infrastructure that is needed to connect countries with our farms and factories and to get our goods to new markets and consumers. They help finance the roads, ports, bridges and railways that make commerce flow and economies prosper. We’ve seen the results: our exports to countries that borrow from the MDBs amount to approximately 40 percent of our total exports, and this number is growing as more economies come online. The MDBs help open markets in a way that promotes American values. They implement policy reforms that include strict procurement processes and safeguards to strengthen property rights and protect the environment and vulnerable populations. Too often, the only alternative to MDB financing is low-cost financing from countries like China.
“Second, these institutions help economies transition to democratic and open markets. In 1988, during the Reagan Administration, the United States made a one-time investment of $420 million for the World Bank’s capital increase. That investment enabled $325 billion in development investments over two decades, creating new market economies in Central and Eastern Europe following the fall of communism, and restoring economic stability during the Mexican and Asian crises in the 1990s. Today, the MDBs are playing the same role by supporting the transitions of the Arab Spring as young people and entrepreneurs seek support for their aspirations and growth.
“Finally, the MDBs play a critical role in helping economies prevent and recover from crises. In 2008, these institutions provided $222 billion in financing to developing countries and reached more than 130 countries, representing more than 40 percent of the global economy and more than 30 percent of America’s export markets. This stabilization was vital to restarting growth in American exports following the crisis, and their swift action helped restore trade finance at a pivotal moment. The MDBs also help maintain the trade flows that are the lifeblood of the global economy.
“At a time when we face constrained resources at home, our investments in the MDBs are the most highly leveraged of our entire foreign aid portfolio, and they sustain our 60-year legacy of leadership and bipartisan support. We know that American businesses are strong supporters of these investments. We appreciate the recent Senate action in support of these programs and look forward to working with Congress to maintain America’s leadership in these vital institutions during this critical period.”