A bipartisan group of senators Thursday reintroduced legislation to authorize a capital increase for the Inter-American Development Bank, raising its annual lending to $20 billion so it can “lead a sustainable and inclusive economic recovery in the Americas.”
First introduced last year, the bill required reintroduction after the new Congress was seated in January. If passed, it would authorize the U.S. IDB governor to approve the capital increase and encourage the creation of a bank environmental fund and lending facility to strengthen sustainability initiatives, as well as environmental policies and safeguards, in the region. It would also focus on disaster preparedness.
The bill was introduced by Sen. Bob Menendez, a Democrat from New Jersey who serves as chairman of the Senate Foreign Relations Committee; Sen. Tim Kaine, a Democrat from Virginia and chairman of the SFRC Subcommittee on Western Hemisphere; Sen. Marco Rubio, a Republican from Florida and ranking member of the SFRC Subcommittee on Western Hemisphere; Sen. Ben Cardin, a Democrat from Maryland and SFRC member; and Sen. Bill Cassidy, a Republican from Louisiana.
Why it matters: IDB President Mauricio Claver-Carone made securing a capital increase a key part of his campaign to become the first American to lead the regional lending institution. He took office in October and after the election pledged to work with U.S. President Joe Biden's administration to gain support for an increase from the bank’s largest shareholder. U.S. congressional support is key to Claver-Carone’s success.
Where will the money go? COVID-19 has hit the Latin America and the Caribbean region harder than any other, with at least a decade of progress on poverty eradication lost there. Central America is still reeling from two back-to-back hurricanes in the fall, and climate change is increasingly disrupting agricultural activities in the region. Claver-Carone has said IDB will increase disaster preparedness work and plans to launch a climate facility this year.