Treasury Secretary Geithner Testifies on State, Foreign Operations and Related Programs

At a time of domestic resource constraints, the multilateral institutions are highly effective in multiplying the impact of our dollars. With just a 5 percent share of Function 150, Treasury’s international funding will make possible, among other things, nearly $80 billion in multilateral development bank (MDB) commitments in FY 2013 alone. This lending will reach urban slums, rural villages, and small cities across the globe. When it comes to global challenges such as poverty, food security, and the environment, we have demonstrated how the United States can leverage its leadership for collective action.

On poverty reduction, U.S. leadership in the International Development Association (IDA) negotiations helped unlock resources from other countries. Specifically, a 10 percent increase in the total U.S. commitment from the previous replenishment leveraged a 19 percent increase from other donors. Other countries will contribute a total of $45 billion to IDA16, up from $38 billion in IDA15. Overall, this funding will help to immunize 200 million children, extend health services to over 30 million people, give access to improved water sources to 80 million people, help build 80,000 kilometers of roads, and train and recruit over two million teachers.

On food security, the United States led the G-20 countries to establish the Global Agriculture and Food Security Program (GAFSP) to increase long-term public and private investment in agriculture in the poorest countries. In a short time frame, this fund has mobilized pledges and contributions totaling nearly $1 billion from six governments as well as the Bill and Melinda Gates Foundation. It is a compelling example of how the United States can internationalize the burden of dealing with pressing global problems.

With $302 million in U.S. contributions to date, we have directly leveraged $579 million from others. The fund has awarded nearly half a billion dollars in grants to twelve countries, and in many cases these countries are putting their own resources into use alongside grants from GAFSP. The fund is helping to connect small farmers to markets, building rural infrastructure, and increasing agricultural productivity. According to GAFSP estimates, these investments are targeted to increase the incomes and food security of 7.5 million poor farmers.

On environmental challenges, U.S. investments in the Clean Technology Fund and other environmental trust funds help reduce the threats caused by changing environmental conditions by combating their causes; help countries develop clean energy infrastructure; and better prepare countries to respond to the impacts of environmental challenges such as deforestation, changing weather patterns, and biodiversity loss.

These investments play an important economic role—investments in energy infrastructure in developing countries are expected to total more than $20 trillion over the next 25 years, including a $10 trillion global market for clean energy. Treasury’s programs help create open, fair, and functioning markets in technologies such as wind, solar, and geothermal energy in which American businesses can compete and win.

Our participation in these multilateral programs magnifies our “bang for the buck” in two important ways. First, our contributions bring in other donors—between $4 and $5 for every $1 the U.S. contributes. Second, these programs help to catalyze additional investments by the MDBs, government, and private sector investors, making the U.S. contribution go even further. For example, the Clean Technology Fund in the past year approved clean energy investment plans that blend $4.3 billion of fund money with other financing to mobilize total planned investments of close to $40 billion. 

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