Sec. 213. Sense of Congress on the United States International Development Finance Corporation
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It is the sense of Congress as follows: The COVID–19 pandemic is causing a global economic recession as evidenced by, but not limited to, the following global economic indicators: The United Nations Conference on Trade and Development estimates that the economic uncertainty associated with the COVID–19 pandemic will likely cost the global economy at least $1,000,000,000,000 in 2020. Global markets have suffered losses ranging between 5 percent and over 10 percent since the beginning of the pandemic.
African finance ministers recently announced that the continent will need at least a $100,000,000,000 stimulus package, including the suspension of debt service payments. Even when markets begin to recover in the future, access to capital will likely be especially challenging for developing countries, which likely also will be struggling with the containment of and recovery from COVID–19. Economic uncertainty and inability of individuals and households to generate income is a major driver of political instability and social discord, which creates conditions for insecurity.
It is in the security and economic interests of the United States to assist in the economic recovery of developing countries that are made more vulnerable and unstable from both the public health and economic impacts of the COVID–19 pandemic. United States foreign assistance and development finance institutions must blunt the impacts of a COVID–19 related economic recession by supporting investments in sectors critical to maintaining economic stability and resilience in low and middle income countries.
The need for the United States International Development Finance Corporation’s support for advancing development outcomes in less developed countries, as mandated by the Better Utilization of Investments Leading to Development Act of 2018 ( 22 U.S.C. 9601 et seq.), is critical to ensuring lasting and resilient economic growth in light of the COVID–19 pandemic’s exacerbation of economic hardships and challenges. The United States International Development Finance Corporation is encouraged to adjust its view of risk versus return by taking smart risks that may produce a lower rate of financial return but produce significant development outcomes in responding to the economic effects of COVID–19.
To mitigate the economic impacts of the COVID–19 recession, the United States International Development Finance Corporation should use its resources and authorities to, among other things— offer borrowers loans and loan guarantees at concessional rates below the Federal Reserve interest rate; ensure loan support for small- and medium-sized enterprises; offer local currency loans to borrowers for working capital needs; create dedicated financing opportunities for new customers that are experiencing financial hardship due to COVID–19; extend grace periods for loan payment and repayment to borrowers experiencing hardship due to the COVID–19 pandemic; and work with other development finance institutions to create co-financing facilities to support customers experiencing hardship due to the COVID–19 pandemic.
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Sec. 213
Sense of Congress on the United States International Development Finance Corporation
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