Inter-American Development Bank General Capital Increase Act of 2020

II 116TH CONGRESS 2D SESSION S. 4997 To authorize the tenth general capital increase for the Inter-American Devel- opment Bank and to strengthen recovery efforts in Latin America and the Caribbean related to the COVID–19 pandemic, and for other pur- poses. IN THE SENATE OF THE UNITED STATES DECEMBER 10, 2020 Mr. MENENDEZ (for himself and Mr. RUBIO) introduced the following bill; which was read twice and referred to the Committee on Foreign Relations A BILL To authorize the tenth general capital increase for the Inter- American Development Bank and to strengthen recovery efforts in Latin America and the Caribbean related to the COVID–19 pandemic, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Inter-American Devel- 4 opment Bank General Capital Increase Act of 2020’’. 5 SEC. 2. FINDINGS. 6 Congress makes the following findings: 7 VerDate Sep 11 2014 03:24 Dec 16, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S4997.IS S4997 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 4997 IS (1) The region of Latin America and the Carib- 1 bean is the most severely impacted by SARS–CoV– 2 2, the virus that causes the coronavirus disease 2019 3 (commonly referred to as ‘‘COVID–19’’), rep- 4 resenting 11,527,596 confirmed cases or 23.08 per- 5 cent of worldwide cases since February 2020, ac- 6 cording to the Inter-American Development Bank. 7 (2) Decline in economic activity as a result of 8 the COVID–19 pandemic will precipitate a 9.9 per- 9 cent fall in gross domestic product per capita 10 throughout Latin America and the Caribbean by the 11 end of 2020, entirely reversing steady advancements 12 in regional gross domestic product per capita since 13 2010, according to the Economic Commission for 14 Latin America and the Caribbean. 15 (3) The Economic Commission for Latin Amer- 16 ica and the Caribbean predicts that, throughout 17 Latin America and the Caribbean, the COVID–19 18 pandemic will— 19 (A) push an additional 45,400,000 people 20 into poverty, increasing the total number of 21 people living in poverty from 185,500,000 to 22 230,900,000, or approximately 37.3 percent of 23 the Latin American and Caribbean population, 24 by the end of 2020; and 25 VerDate Sep 11 2014 03:24 Dec 16, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S4997.IS S4997 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 4997 IS (B) cause the total number of individuals 1 living in extreme poverty to increase by 2 28,500,000 from 67,700,000 to 96,200,000, or 3 approximately 15.5 percent of the Latin Amer- 4 ican and Caribbean population, by the end of 5 2020. 6 (4) The Inter-American Development Bank es- 7 timated in May 2020 that 17,000,000 formal jobs 8 would be lost as a result of the pandemic, increasing 9 the share of jobs in informal sectors of the region’s 10 economies to 62 percent. September 2020 findings 11 from the International Labour Organization noted 12 that 34,000,000 workers across 9 countries in the 13 region lost their jobs in the first half of 2020. 14 (5) The pandemic also has complicated the hu- 15 manitarian and development challenges countries 16 across Latin America and the Caribbean face as 17 hosts to more than 4,300,000 Venezuelan refugees 18 and migrants, prompting the Inter-American Devel- 19 opment Bank to launch a migration initiative that 20 aims to provide $85,000,000 in grants and leverage 21 investments of $1,100,000,000 in social protection, 22 health, education, and employment. 23 (6) The pandemic has severely disrupted edu- 24 cation systems across Latin America and the Carib- 25 VerDate Sep 11 2014 03:24 Dec 16, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S4997.IS S4997 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 4997 IS bean because of a lack of equipment and pedagogical 1 tools required for effective remote schooling. Accord- 2 ing to data compiled by the United Nations Edu- 3 cational, Scientific and Cultural Organization and 4 the Inter-American Development Bank, less than 30 5 percent of low-income families impacted by decisions 6 to halt in-person classes have access to a computer 7 and only around 60 percent of secondary school 8 teachers have the skills needed for virtual instruc- 9 tion. 10 (7) Countries across Latin America and the 11 Caribbean continue to face enduring economic chal- 12 lenges, including persistent inequality, high levels of 13 tax evasion and avoidance, and elevated debt levels. 14 (8) The stability, sustainable development, and 15 inclusive growth of economies in Latin America and 16 the Caribbean is in the national interest of the 17 United States, as the region accounts for 21.7 per- 18 cent of United States trade in goods in 2019, ac- 19 cording to the Economic Commission for Latin 20 America and the Caribbean. 21 (9) The Inter-American Development Bank is 22 the world’s oldest and largest regional development 23 bank, and has worked continuously since 1959 to 24 VerDate Sep 11 2014 03:24 Dec 16, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S4997.IS S4997 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 4997 IS foster economic, social, and institutional develop- 1 ment in Latin America and the Caribbean. 2 (10) The Inter-American Development Bank is 3 uniquely positioned to advance post-pandemic recov- 4 ery efforts and to mitigate the social and economic 5 impacts of the pandemic. As early as March 2020, 6 the Inter-American Development Bank announced 7 the allotment of up to $12,000,000,000 toward im- 8 mediate public health responses, efforts to revitalize 9 social safety nets for vulnerable populations, and 10 strategic economic productivity and employment ini- 11 tiatives. 12 (11) With the support of 23 out of the 28 13 shareholding countries in the Western Hemisphere, 14 the Governors of the Inter-American Development 15 Bank duly elected a new President of the Bank on 16 September 12, 2020, to serve a 5-year term. 17 (12) The 48 borrowing and non-borrowing 18 member countries of the Inter-American Develop- 19 ment Bank last agreed to a ninth general capital in- 20 crease as part of the Bank’s annual meeting on 21 March 20–22, 2010. 22 (13) Under the Coronavirus Aid, Relief, and 23 Economic Security Act (Public Law 116–136; 134 24 Stat. 281) (commonly referred to as the ‘‘CARES 25 VerDate Sep 11 2014 03:24 Dec 16, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S4997.IS S4997 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 4997 IS Act’’), enacted on March 27, 2020, Congress ap- 1 proved capital stock increases for the International 2 Finance Corporation and the African Development 3 Bank to strengthen the ‘‘ability of foreign countries 4 to prevent, prepare for, and respond to coronavirus 5 and to the adverse economic impacts of 6 coronavirus’’. 7 SEC. 3. SENSE OF CONGRESS. 8 It is the sense of Congress that— 9 (1) the spread of SARS–CoV–2 has had a sig- 10 nificant impact on economic, social, and humani- 11 tarian conditions throughout Latin America and the 12 Caribbean; 13 (2) the Inter-American Development Bank is 14 the preeminent multilateral development bank dedi- 15 cated to regional economic and social development 16 and the betterment of lives across Latin America 17 and the Caribbean; 18 (3) the Bank has played an integral role in sup- 19 porting member countries with the coordination and 20 implementation of policies to mitigate the effects of 21 the COVID–19 pandemic, the Venezuelan refugee 22 and migration crisis, and other crises in the Western 23 Hemisphere; 24 VerDate Sep 11 2014 03:24 Dec 16, 2020 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S4997.IS S4997 pamtmann on DSKBC07HB2PROD with BILLS 7 •S 4997 IS (4) a capital increase for the Bank would great- 1 ly increase its capacity to provide financing, institu- 2 tional knowledge, and technical support to foster re- 3 covery and inclusion initiatives between regional gov- 4 ernments, private sector entities, and international 5 organizations; 6 (5) the election on September 12, 2020, of a 7 new president of the Inter-American Development 8 Bank— 9 (A) demonstrated hope for the leadership 10 of the United States by regional partners facing 11 increased geopolitical competition and the sig- 12 nificant impact of the COVID–19 pandemic; 13 and 14 (B) presents an opportunity for the United 15 States to further strengthen its commitment to 16 helping build a financially stronger and more 17 transparent Bank in order to support the coun- 18 tries of the Americas during such historic cri- 19 ses; and 20 (6) the United States, as a founding member of 21 the Bank, should support a capital stock increase to 22 ensure the Bank is prepared to offer additional sup- 23 port to member countries severely impacted by the 24 COVID–19 pandemic and other crises. 25 VerDate Sep 11 2014 03:24 Dec 16, 2020 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S4997.IS S4997 pamtmann on DSKBC07HB2PROD with BILLS 8 •S 4997 IS SEC. 4. TENTH GENERAL CAPITAL INCREASE. 1 (a) SUPPORT FOR A GENERAL CAPITAL INCREASE.— 2 The President shall take steps to support a tenth general 3 capital increase for the Inter-American Development 4 Bank. 5 (b) DIPLOMATIC ENGAGEMENT.—The President 6 shall advance diplomatic engagement to build support 7 among member countries of the Inter-American Develop- 8 ment Bank for a tenth general capital increase for the 9 Bank in order to strengthen the capacity of the Bank— 10 (1) to support Latin American and Caribbean 11 countries in their efforts to address the COVID–19 12 pandemic and the related economic impact; and 13 (2) to advance inclusive economic and social de- 14 velopment in the Americas. 15 (c) PROGRESS REPORT.—Not later than 45 days 16 after the date of the enactment of this Act, the President 17 shall submit to the Foreign Relations Committee of the 18 Senate and the Committee on Financial Services of the 19 House of Representatives a report detailing efforts to 20 carry out subsections (a) and (b). 21 (d) TENTH CAPITAL INCREASE.—The Inter-Amer- 22 ican Development Bank Act (22 U.S.C. 283 et seq.) is 23 amended by adding at the end the following: 24 VerDate Sep 11 2014 03:24 Dec 16, 2020 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S4997.IS S4997 pamtmann on DSKBC07HB2PROD with BILLS 9 •S 4997 IS ‘‘SEC. 42. TENTH CAPITAL INCREASE. 1 ‘‘(a) VOTE AUTHORIZED.—The United States Gov- 2 ernor of the Bank is authorized to vote in favor of a reso- 3 lution to increase the capital stock of the Bank by 4 $80,000,000,000 over a period not to exceed 5 years. 5 ‘‘(b) SUBSCRIPTION AUTHORIZED.— 6 ‘‘(1) IN GENERAL.—The United States Gov- 7 ernor of the Bank may subscribe on behalf of the 8 United States to 1,990,714 additional shares of the 9 capital stock of the Bank. 10 ‘‘(2) LIMITATION.—Any subscription by the 11 United States to the capital stock of the Bank shall 12 be effective only to such extent and in such amounts 13 as are provided in advance in appropriations Acts. 14 ‘‘(c) LIMITATIONS ON AUTHORIZATION OF APPRO- 15 PRIATIONS.— 16 ‘‘(1) IN GENERAL.—In order to pay for the in- 17 crease in the United States subscription to the Bank 18 under subsection (b), there is authorized to be ap- 19 propriated $24,014,857,191 for payment by the Sec- 20 retary of the Treasury. 21 ‘‘(2) ALLOCATION OF FUNDS.—Of the amount 22 authorized to be appropriated under paragraph 23 (1)— 24 ‘‘(A) $600,371,430 shall be for paid in 25 shares of the Bank; and 26 VerDate Sep 11 2014 03:24 Dec 16, 2020 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S4997.IS S4997 pamtmann on DSKBC07HB2PROD with BILLS 10 •S 4997 IS ‘‘(B) $23,414,485,761 shall be for callable 1 shares of the Bank.’’. 2 SEC. 5. SUPPORT FOR ENVIRONMENTAL SUSTAINABILITY 3 INITIATIVES OF INTER-AMERICAN DEVELOP- 4 MENT BANK. 5 (a) FINDINGS.—Congress makes the following find- 6 ings: 7 (1) The Inter-American Development Bank has 8 served as an executing agency for the Global Envi- 9 ronment Facility, a grant-making and financing fa- 10 cility supported by 182 countries to address global 11 environmental issues and sustainable development. 12 (2) The Inter-American Development Bank has 13 never had its own environmental grant-making and 14 financing facility despite the fact that the Americas 15 are home to the world’s largest tropical rain forest 16 and include countries significantly affected by nat- 17 ural disasters annually. 18 (b) SENSE OF CONGRESS.—It is the sense of Con- 19 gress that the Inter-American Development Bank 20 should— 21 (1) establish its own environmental grant-mak- 22 ing and financing facility in order to implement and 23 expand environmental policies, metrics, and stand- 24 ards, to strengthen resilience and disaster prepared- 25 VerDate Sep 11 2014 03:24 Dec 16, 2020 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S4997.IS S4997 pamtmann on DSKBC07HB2PROD with BILLS 11 •S 4997 IS ness, and to improve sustainability and conservation; 1 and 2 (2) continue to strengthen environmental safe- 3 guards as an element of economic development in 4 the Western Hemisphere. 5 (c) DIPLOMATIC ENGAGEMENT.—The President shall 6 advance diplomatic engagement to build support among 7 member countries of the Bank for the creation of an envi- 8 ronmental fund and financing facility as part of the tenth 9 general capital increase for the Bank. 10 Æ VerDate Sep 11 2014 03:24 Dec 16, 2020 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6301 E:\BILLS\S4997.IS S4997 pamtmann on DSKBC07HB2PROD with BILLS