Today, Congresswoman Maxine Waters (D-CA), the top Democrat on the House Financial Services Committee and Congresswoman Joyce Beatty (D-OH), the Ranking Member of the Subcommittee on National Security, Illicit Finance, and International Financial Institutions, announced plans this week to introduce a legislative package aimed at strengthening and reforming the International Financial Institutions. With the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group underway, this bill will help initiate reforms related to transparency, accountability, and institutional management. Specifically, this bill seeks to hold accountable the persons involved in the child sexual abuse scandal at the Bridge Academies project in Kenya, eliminate onerous loan conditions on developing or distressed countries, improve the debt forgiveness efforts of the IFIs, reduce reliance on Russian agriculture, combat corruption, and more.

“Over the years, our International Financial Institutions (IFI) have played a crucial role in establishing international order and addressing some of the most pressing economic challenges across the globe,” said Congresswoman Waters. “Despite this success, there have been troubling instances of child abuse, corruption, discrimination, and mismanagement that has hindered IFIs from reaching their full potential. I am eager to advance this bill to the President’s desk and look forward to working across the aisle on ways to strengthen the IMF, World Bank and other Development Banks so that they can create a more equitable and prosperous global economy.”

“Countries around the world continue to face significant social and economic challenges, from corruption and human rights abuses to debt sustainability crises and the disastrous effects of climate change,” said Congresswoman Beatty. “International Financial Institutions (IFIs) have done substantial work to promote financial stability, poverty reduction, and economic development, but they can do more to address systemic inequities and facilitate debt relief for distressed countries. I am proud to join Ranking Member Waters in introducing this package of meaningful reforms to increase transparency and accountability at the IFIs, strengthen support for low-income countries, and establish robust human rights protections.”

Key provisions in the legislative package include:

• Treasury Report on Accountability of the World Bank in Child Sexual Abuse – This provision would mandate that Treasury report to Congress on a quarterly basis on actions completed by the World Bank to compensate survivors of child sexual abuse, including with financial compensation and other relief, and to hold accountable those involved in the Bridge Academies project. The quarterly report to Congress must also include details of reforms adopted by the International Finance Corporation (IFC) to prevent such failures in the future, as well as any steps taken by the IFC to impede Treasury from sharing any information around this report or the Bridge Academies case with Congress.
  
  
• Anti-corruption measures in lending agreements – This provision states that the US press for the incorporation of anti-corruption measures in lending agreements at the IMF to build sustainable economies. Such measures must include ensuring that governments receiving loans make specific, measurable, and time-bound commitments as part of the loan agreements, with consequences for noncompliance.
  
  
• Protections for human rights, including LGBTQ+ persons – This provision would mandate that Treasury oppose the World Bank providing financial assistance to countries that engage in the human rights abuses as reported in the State Department’s Annual Country Reports on Human Rights Practices, including those of people who identify as LGBTQ+.
  
  
• Loan Conditions – This provision states that the U.S. encourage the reduction or elimination of loan conditions that: limit spending on key social needs such as health, education, or climate action; weaken environmental, labor, public health regulations; or increase taxes or reduce subsidies in such a way that falls regressively on recipient country populations.
  
  
• Reporting on Human Rights Abuses in For-Profit Healthcare – This provision mandates that Treasury report to Congress on a biannual basis on any known accusations made by community groups, CSOs, media, or other credible actors, of human rights abuses at MDB-funded, for-profit hospitals, included those funded by the IFC, and on actions completed by the MDB private sector arms to investigate and address or respond to these accusations. This provision also mandates that U.S. advocate for the MDBs to examine their investments in healthcare to determine contribution to universal health coverage, the strengthening of national health systems, and the reduction of health inequities.
  
  
• Resilience and Sustainability Trust (RST) Financing – This provision would amend the most recent appropriations law so that U.S. money could be used to finance loans to the RST in addition to the Poverty Reduction and Growth Trust. This is important because the Republicans cut the RST out from potentially receiving loans.
  
  
• Quota Increase – This provision would authorize an equiproportional increase in quota at the IMF consistent with the increase Treasury negotiated with the IMF Member countries. If Congress passes this provision the US would retain its veto power and percent of shareholding at the IMF and China’s share would not increase (even though it probably should based on its growth). At the IMF, Member countries’ maximum financial commitments to the Fund are called “quota.” Quota is broadly matched to a Member country’s relative position in the world’s economy, and voting shares at the IMF are in line with how much quota a country pays. This was in President Biden’s most recent budget request.
  

Read the full bill here.
Read the Section by Section here.

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