March 04, 2021

Menendez, Rubio, Kaine, Cassidy and Cardin Introduce IDB General Capital Increase Act

WASHINGTON — U.S. Senator Bob Menendez (D-N.J.), Chairman of the Senate Foreign Relations Committee, was joined today by Senators Marco Rubio (R-Fla.), Tim Kaine (D-Va.), Ranking Member and Chairman of the SFRC Subcommittee on Western Hemisphere, as well as Senators Bill Cassidy (R-La.) and Ben Cardin (D-Md.) in reintroducing legislation authorizing the tenth general capital increase for the Inter-American Development Bank (IDB), the hemisphere’s leading international financial institution. At a moment when countries in the region have suffered from the widespread economic impact of the COVID-19 pandemic and devastating hurricanes, the bill highlights that the U.S. Congress is leading efforts to prioritize and secure an IDB capital increase.

The legislation would increase the IDB’s annual lending to $20 billion and strengthen its ability to lead financial recovery efforts across Latin America and the Caribbean. As part of the capital increase, the bill encourages the creation of the IDB’s first environmental fund and lending facility — a groundbreaking initiative that would position the Bank to expand efforts to improve environmental sustainability and disaster preparedness in the hemisphere. 

"As we continue looking for ways to step up our efforts to address global challenges posed by the COVID-19 pandemic, this important legislation renews the United States’ commitment to the region’s leading multilateral development bank and to deepening economic relations with our hemispheric partners,” Senator Menendez said. “I’m glad to be joined by so many of my colleagues to ensure the IDB has the resources it needs to support our partners in Latin America and the Caribbean, particularly after the hemisphere’s economic outlook was severely battered by COVID-19 and a devastating hurricane season. This bill would also ensure that the IDB is better prepared to address the growing challenges of climate change in the Americas by calling for the establishment of its first-ever environmental fund.”

“I’m proud to join Senator Menendez in reintroducing this important bill at a time when American leadership in our hemisphere is needed more than ever,” Senator Rubio said. “By supporting the Inter-American Development Bank’s capital increase, we are reaffirming our support of the organization and its financial initiatives. As we continue to confront this global pandemic, we must continue doing all we can to counter China’s predatory behavior in our hemisphere.”

“This bill is a critical step in providing the economic help Latin America and the Caribbean urgently need,” Senator Kaine said. “With 8% of the world’s population and 30% of its COVID-19 deaths, the region is experiencing one of its worst economic contractions on record: millions have lost jobs or fallen into poverty, and per capita income in 2025 is expected to be less than in 2015. I hope that other IDB member countries will join the United States in increasing their commitments and that ultimately we will be able to aggressively help struggling people in the region.”

“We’ve got to tackle illegal migration, corruption and organized crime. One way to do that is the IDB and a stronger relationship between the U.S. and Latin America,” said Dr. Cassidy.

“We know the Inter-American Development Bank is vital to the financial future of our Hemisphere,” said Senator Cardin. “With the unprecedented economic impact of the COVID-19 pandemic, U.S. support for this capital increase is more important than ever. I am proud to support this capital increase and the creation of a new IDB environmental fund. This fund would be instrumental for ensuring that economic recovery in Latin America is sustainable and responsive to the challenges countries face from climate change.”

The legislation includes the following provisions:

  • Authorizes the U.S. Governor for the IDB to vote in favor of an $80 billion increase in the capital stock of the Bank and requires U.S. diplomatic engagement in support of a 10th IDB capital increase.
  • Encourages the creation of an IDB environmental fund and lending facility to strengthen environmental policies and safeguards, sustainability initiatives, and disaster preparedness in Latin America and the Caribbean.
  • Recognizes the significant economic impact of the COVID-19 pandemic in the Western Hemisphere, as well as the impact of the Venezuelan refugee and migration crisis.

 

The full text of the Inter-American Development Bank General Capital Increase Act can be found HERE and a section-by-section description of the legislation can be found HERE.

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Juan Pachon