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House Bill Would Decimate World Bank Funding

The proposed bill slashes more than half a billion dollars, or almost half of U.S. funding for the organization.

WASHINGTON - MAY 08:  An employee walks outside the World Bank headquarters May 8, 2007 in Washington, DC. Recent reports indicate that the global financial institution may soon resolve controversies surrounding its President Paul Wolfowitz.  (Photo by Win McNamee/Getty Images)
WASHINGTON - MAY 08: An employee walks outside the World Bank headquarters May 8, 2007 in Washington, DC. Recent reports indicate that the global financial institution may soon resolve controversies surrounding its President Paul Wolfowitz. (Photo by Win McNamee/Getty Images)

The House is pushing a bill that would slash World Bank funding by almost half — a far deeper cut to the international finance organization than even President Donald Trump’s budget proposed.

On July 12, the Republican-led House Appropriations Committee released its State and Foreign Operations bill, representing its vision for the 2018 fiscal year budget for the State Department, security responses, and humanitarian missions. The World Bank would receive $541 million less than what the president requested, according to a draft copy of a report on the bill reviewed by Foreign Policy.

The bulk of the cut comes from the International Development Association (IDA), one of the five agencies together referred to as the World Bank Group. The IDA received just under $1.2 billion in 2017, but the House budget bill would dramatically slash its funding to less than $659 million for 2018.

The president’s budget request proposed only a modest cut to the IDA, putting it at $1.1 billion for 2018.

The IDA provides low-interest loans to 77 of the world’s poorest countries, including 39 in Africa. Some of the countries depend on IDA funding to provide basic social programs, according to the IDA website.

“Given the budget caps, difficult choices had to be made,” said an appropriations committee aide, who asked not to be named. “The bill prioritizes embassy security, security assistance, and humanitarian, global health, democracy, and other development programs.”

The proposed budget also eliminates funding for the Global Environment Facility, another World Bank-funded organization, despite Trump’s request of $102 million. It zeroes out funding for the global agriculture and food security program, which received $23 million in 2017, and cuts almost $6 million from the International Bank for Reconstruction and Development, reducing it to zero as well.

Altogether, the cuts reduce the World Bank’s funding from almost $1.4 billion in 2017 to just under $659 million for 2018.

The World Bank declined to comment on the proposed budget cut.

“Throughout the years, we have worked with various U.S. administrations and Congress to maintain support for World Bank programs, and we will continue to do so,” said Angela Gentile, the head of development finance communications at the World Bank. “We are committed to demonstrating to all of our shareholders that we deliver results and good value for money.”

The bill in its current form provides $47.4 billion to the State Department and foreign operations. That’s $10 billion less than the 2017 budget, representing a 14 percent cut to State and a 17 percent cut overall. That’s a smaller cut than Trump’s own proposal, which would have reduced State’s budget by 30 percent and which caused tremors throughout the development community.

The bill is scheduled for markup on Wednesday, so funding levels remain tentative. But in its current form, the budget represents the GOP leadership’s wish list for 2018 funding.

Cuts to the World Bank were not mentioned in the July 12 press release posted to the appropriations committee website, but it does mention “reductions to nonessential or lower-priority international programs.”

Photo credit: Win McNamee/Getty Images

Bethany Allen-Ebrahimian is a contributing writer at Foreign Policy. @BethanyAllenEbr

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