Hill to Yellen: The International Financial Institutions Seem to Think About Everything Except Economic Growth
Washington,
June 13, 2023 -
Today, the House Financial Services Committee is holding a hearing with Treasury Secretary Janet Yellen. Republicans will discuss the state of the international financial system and the operations of the international financial institutions.
Watch Vice Chairman French Hill’s (AR-02) opening remarks here.
Read Vice Chairman Hill’s opening remarks as prepared for delivery:
“Welcome, Secretary Yellen. I appreciate you being here today.
“Today’s hearing is about the state of the International Financial Institutions. But I do want to take a minute to talk about the debt ceiling crisis we narrowly avoided. First – we are all glad this is behind us. No one wanted default. No legislative branch official, no executive branch official.
“Your statement says waiting until the last minute hurts American credibility. I agree. Madam Secretary, this could have been dealt with by the President, Speaker Pelosi, last year in the last Congress.
“Or the President could have engaged sooner with Speaker McCarthy when they met on February 1.
“But nonetheless, Mr. Biden signed into law an effective compromise.
“That said – there remains a lot of frustration, particularly with the lack of transparency on when the Treasury Department expected the debt ceiling to be breached – otherwise known colloquially as the X-date.
“At the end of February, Chairman McHenry wrote to you requesting information and your projections and calculations.
“Simple enough.
“Your response was lacking, to put it mildly. This Committee and Congress as a whole, didn’t hear from you again until May 1st, after the House passed the Limit, Save, Grow Act. Two different X-dates—June 1st and June 5th—were subsequently released.
“Zero explanation and zero transparency. We all must have confidence in the fiscal analysis of our government.
“Now I’d like to turn back and focus on the issue of today: International Financial Institutions.
“Let’s start with where we agree – with the nomination of World Bank President, Ajay Banga. Mr. Banga is a serious, competent leader, who has the capacity to right the ship at the World Bank and continue the improvements and leadership from former President, Mr. Malpass.
“The World Bank and IMF should be laser-focused on eliminating poverty and helping countries overcome crises. Unfortunately, the international financial institutions seem to think about everything except economic growth.
“They have fallen into a bottomless word-salad of empty rhetoric that serves western NGOs, not the interest of developing countries. No wonder China has become the world’s largest official creditor, even though its lending terms are often more burdensome than those of the international financial institutions.
“Africa is a helpful case study. Treasury is opposing virtually all fossil fuel and nuclear projects through the multilateral development banks – even though half of the continent of Africa doesn’t have access to electricity. How does this make sense? Who is eager to build infrastructure there? China.
“Meanwhile, the IMF has completely failed to bring China into compliance with international norms. The Fund must get serious about standing up to the Chinese government if it takes its mission seriously.
“If the Fund keeps letting Beijing drag out restructuring talks with its borrowers, there won’t be much of a case for additional IMF resources at the end of this year.
“There is no doubt China poses a generational threat to our national interest. But as long as we remain committed to our values, the U.S. can and will outcompete the Chinese Communist Party.
“I look forward to your testimony and yield back.”
###
