EDITOR’S NOTE: In his testimony before the House Financial Services Committee’s subcommittee on international monetary policy and trade earlier this week, Lael Brainard, the undersecretary for international affairs at the U.S. Treasury Department, stressed that multilateral development banks have a vital role in securing U.S. economic interests. Mikenna Maroney, of the U.S. Global Leadership Coalition, says Brainard’s testimony provides a reminder that U.S. investments in diplomacy and development, including in multilateral development banks, are cost-effective ways to guarantee U.S. leadership in the world and promote both U.S. and global security and economic interests.
Multilateral Development Banks (MDBs) not only foster economic growth abroad, but also strengthen the American economy at home. That was the message delivered earlier this week when U.S. Department of Treasury Under Secretary for International Affairs Lael Brainard testified before the House Financial Services Committee’s Subcommittee on International Monetary Policy and Trade.
In her testimony Brainard emphasized how multilateral development banks play a vital role in securing America’s economic interests, stating, “The MDB’s build the roads and ports to get our products to new markets, and the ‘soft infrastructure’ that makes markets work: reducing trade barriers, improving property rights, and slashing cumbersome red tape. Their assistance nurtures the emerging economies that become key export markets for U.S. companies, generating jobs at home.” She also noted the role of procurement contracts awarded to U.S. businesses, and highlighted the ways in which these contracts are “directly supporting American jobs.”
Brainard also underscored the importance of U.S. involvement in the World Bank and multilateral development banks as critical to U.S. security and strategic interests, as well as being cost effective. U.S. contributions to these institutions addresses pressing security and humanitarian concerns such as stabilizing fragile states, providing education, combating hunger and disease, and supporting freedom and democratic transitions. In terms of cost effectiveness, each $1 that the U.S. contributes to multilateral development banks leverages $25 dollars of multilateral development assistance. According to Brainard, the U.S. contribution of $420 million to the World Bank has supported $325 billion development investments since 1988.
Coming at a time of intense pressure on the U.S. federal budget, and especially our contributions to these important institutions, Brainard’s testimony serves as a reminder that our investments in diplomacy and development, such as the MDB’s, represents a cost effective way to ensure U.S. leadership in the world and to support the security and economic interests of both the U.S. and the international community. As her testimony concluded, “Our leadership as the foremost shareholder at these institutions guarantees that their sizable and significant investments will continue to foster freedom and opportunity, secure America’s economic and commercial interests, address urgent global threats, safeguard national security, and alleviate extreme deprivation around the world.”
Re-published with permission by the U.S. Global Leadership Coalition. Visit the original article.