[Congressional Record Volume 151, Number 33 (Thursday, March 17, 2005)]
[Senate]
[Pages S3061-S3064]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DODD:
  S. 682. A bill to authorize the establishment of a Social Investment 
and Economic Development Fund for the Americans to provide assistance 
to reduce poverty and foster increased economic opportunity in the 
countries of the Western Hemisphere, and for other purposes; to the 
Committee on Foreign Relations.
  Mr. DODD. Mr. President, I rise today to introduce the Social 
Investment and Economic Development Fund

[[Page S3062]]

for the Americas Act of 2005. This legislation would authorize critical 
assistance to fight poverty and increase economic opportunity in the 
countries of the Western Hemisphere.
  In January, my colleagues Senator Bill Nelson, Senator Lincoln Chafee 
and I visited Venezuela, Paraguay, Argentina, Peru and Ecuador. Our 
trip and discussions with political and economic leaders throughout the 
region underscored to me the danger that poverty and economic 
inequality continue to pose to regional stability, the rule of law, and 
to the continuation of market reforms.
  One third of the population in Latin America currently lives in 
poverty. 128 million people survive on less than two dollars a day, and 
50 million people on less than one dollar a day. In Haiti, the poorest 
country in the Western Hemisphere, 65 percent of the population lives 
below the poverty line. Despite economic growth throughout the 1990s, 
moreover, unemployment in Latin America actually increased. And as we 
all know such factors have the potential to increase instability and 
undermine democratic reforms and the rule of law. Indeed, individuals 
living in poverty are often forced by circumstances to engage in 
illicit activity, including narco-trafficking and even supporting 
terrorist related activities.
  But there is not only tremendous poverty. Income inequality in Latin 
America is the highest in the world. To illustrate that fact, consider 
that the richest one-tenth of all Latin Americans earn 48 percent of 
the total national income, whereas the bottom one tenth earns only 1.6 
percent. By contrast, in developed countries, the top ten percent earns 
29.1 percent, and the bottom 10 percent earns 2.5 percent. Is it any 
wonder that economic inequality in Uruguay, the most equal country in 
Latin America, is still greater than in the most unequal country in 
Eastern Europe?
  Poverty and inequality are not simply social injustices. They 
threaten the political stability of Latin America and the national 
interests of the United States. Indeed, according to a 2004 report by 
the United Nations Development Program, progress in extending elective 
democracy across Latin America is threatened by ongoing social and 
economic turmoil. Most troubling, the report suggests that over 50 
percent of the population of Latin America would be willing to 
sacrifice democratic government for real progress on the economic and 
social fronts. That is a frightening statistic. And it should make 
crystal clear the urgency of this situation. Two decades of progress in 
our hemisphere is at risk.
  The Social Investment and Economic Development Fund for the Americas 
Act of 2005 would seek to address these issues by investing in the 
peoples of the Americas. This important legislation would make it 
United States policy to promote market-based principles, economic 
integration, social development, and inter-American trade. To that end, 
it would authorize $250 million annually in bilateral economic 
assistance to the hemisphere through fiscal year 2010. It would also 
authorize multilateral assistance, directed through the Inter-American 
Development Bank, of no more than $250 million per year and $1.25 
billion in total.

  Certainly, strong trade relations remain a key to creating healthy 
economies both here in the United States and throughout the region. But 
trade alone cannot address the myriad challenges facing Latin America, 
when millions of citizens in the hemisphere remain marginalized by 
economic insecurity and social dislocation. That is another reason why 
this bill is so critical.
  To confront these challenges, we have to start at the grass roots. We 
have to start with the people. And the Social Investment and Economic 
Development Fund for the Americas would do that by supporting public-
private partnerships and micro-enterprise developments. It would give 
honest, hardworking families the chance to become entrepreneurial and 
to create a broad based ownership society in their countries. We 
promote these values here at home, and we should do so abroad.
  Investing in people also means investing in human capital. And there 
is clearly a need. According to the World Bank large portions of the 
population do not receive adequate services such as education and 
health care. Education, in particular, is identified as critical to 
development. Yet the quality of education varies significantly based on 
social status and income distribution. In Mexico, for example, the 
average individual in the bottom 20 percent income bracket has only 3.5 
years of schooling, whereas an individual in the top 20 percent income 
bracket has 11.6 years. My legislation would address these inequities 
by targeting assistance at projects which would invest in education. It 
would also build human capital by investing in basic needs such as 
health care, disease prevention, nutrition, and housing.
  To move forward, we also have to help the people invest in good 
governance. Public corruption remains an especially persistent and 
pernicious problem in this hemisphere. Both Transparency International 
and the World Economic Forum report high levels of corruption 
throughout the region. Moreover, while full citizen participation in 
government is a key to strengthening democracy and ensuring that civil 
services work, many Latin American citizens do not express confidence 
in their political institutions. This Act would attempt to overcome 
these barriers to progress by enhancing efficiency and transparency in 
government services as well as increasing civil society participation 
in government.
  Lastly, marginalized populations, including indigenous groups, people 
of African descent, women, and people with disabilities, are 
particularly affected by problems of poverty and income inequality. 
This act would target funds to reduce poverty and decrease social 
dislocation among these populations.
  The funds authorized by this act would be distributed on the basis of 
competitive bidding and inter-American cooperation. To do so, this 
legislation would establish technical review committees which will 
partner with consultative committees in each country to make 
determinations on funding requests.
  Finally, the historic Summits of the Americas made it clear that 
economic and social integration are the responsibilities of all nations 
in the Western Hemisphere. Through this act, the United States would 
send a strong signal to others in the region that we take these 
responsibilities seriously. And it will challenge the other countries 
in the hemisphere to collectively match our efforts.
  We stand today at a moment of great opportunity and great risk in 
this hemisphere. The past two decades have witnessed the rise of 
democratic governments in nations that long languished under 
dictatorship. Yet this progress is endangered. Economic and social 
conditions for millions of men and women continue to lag dangerously 
far behind. It is in our moral and strategic interests to provide the 
necessary economic assistance to fight the scourges of poverty and 
social dislocation in this hemisphere. The Social Investment and 
Economic Development Fund for the Americas Act of 2005 is a vital first 
step to achieving this goal. I ask my colleagues to join me in 
supporting this important legislation.
  I ask unamimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 682

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Social Investment and 
     Economic Development Fund for the Americas Act of 2005''.

     SEC. 2. FINDINGS; STATEMENT OF POLICY.

       (a) Findings.--Congress finds the following:
       (1) The historic economic, political, cultural, and 
     geographic relationships among the countries of the Western 
     Hemisphere are unique and of continuing special significance 
     to the United States.
       (2) The interests of the countries of the Western 
     Hemisphere are more interrelated today than ever before. 
     Consequently, sound economic, social, and democratic progress 
     in each of the countries continues to benefit other 
     countries, and lack of it in any country may have serious 
     repercussions in others.
       (3) Following the historic Summits of the Americas, the 
     1994 Summit in Miami, the

[[Page S3063]]

     1998 Summit in Santiago, Chile, the 2001 Summit in Quebec 
     City, Canada, and the 2004 Special Summit in Monterrey, 
     Mexico, the heads of state of the countries of the Western 
     Hemisphere accepted the formidable challenge of economic and 
     social integration in and between their respective countries.
       (4) To make progress toward economic and social 
     integration, there is a compelling need to focus on the 
     social development of the people of the Americas which, in 
     turn, will promote the economic and political development of 
     the region.
       (5) Investment in social development in the Americas, 
     including investment in human and social capital, 
     specifically in education, health, housing, and labor markets 
     with the goal of combating social exclusion and social ills, 
     will consolidate political democracy and the rule of law and 
     promote regional economic integration and trade in the 
     region.
       (6) The challenge of achieving economic integration between 
     one of the world's most developed economies and some of the 
     poorest and most vulnerable countries requires a special 
     effort to promote social equality, develop skills, and 
     modernize the infrastructure in poorer countries that will 
     enable the people of these countries to maximize the amount 
     of benefits accrued from economic integration.
       (7) The particular challenge facing social and economic 
     development in Latin America is the historic and persistent 
     highly unequal distribution of wealth. Latin America suffers 
     from the most unequal distribution of wealth in the world 
     with huge inequities in the distribution of assets including 
     education, land, and credit.
       (8) Latin America also confronts the challenge of an 
     increasing number of poor people. As of today, approximately 
     one-third of the population lives in poverty and increasing 
     numbers live in extreme poverty. Poverty exists in all Latin 
     American countries but 70 percent of the region's poor live 
     in the five largest middle-income countries.
       (9) Marginalized groups, including indigenous populations, 
     people of African descent, women, people with disabilities, 
     and rural populations, are socially excluded and suffer from 
     poverty, stigma, and discrimination.
       (10) Democratic values are dominant throughout the 
     Americas, and nearly all governments in the region have come 
     to power through democratic elections.
       (11) Nonetheless, existing democratic governments and their 
     constituent institutions remain fragile and face critical 
     challenges including effective democratic civilian authority 
     over these institutions, including the military, the 
     consolidation or establishment of independent judicial 
     institutions and the rule of law, and the elimination of 
     corruption.
       (12) The prosperity, security, and well-being of the United 
     States is linked directly to peace, prosperity, and democracy 
     in the Americas. The entire region benefits by reducing 
     poverty, strengthening the middle class, and promoting the 
     rule of law which will also increase markets for United 
     States goods and create a better environment for regional 
     investment by United States businesses.
       (13) Section 101 of the Foreign Assistance Act of 1961 (22 
     U.S.C. 2151) establishes as a principal objective of United 
     States foreign assistance the ``encouragement and sustained 
     support of the people of developing countries in their 
     efforts to acquire the knowledge and resources essential to 
     development and to build the economic, political, and social 
     institutions which will improve the quality of their lives''.
       (14) It is in the national interests of the United States 
     to assist developing countries in the Western Hemisphere as 
     they implement the economic and political policies which are 
     necessary to achieve equitable economic growth.
       (15) The Summit of the Americas has directly charged the 
     multilateral institutions of the Americas, including the 
     Organization of American States (OAS), the Inter-American 
     Development Bank (IADB), and the Inter-American Agency for 
     Cooperation and Development with mobilizing private-public 
     sector partnerships among industry and civil society to help 
     achieve equitable development objectives.
       (16) By supporting the purposes and objectives of 
     development and applying such purposes and objectives to the 
     Americas, a Social Investment and Economic Development Fund 
     for the Americas has the potential to advance the national 
     interests of the United States and directly improve the lives 
     of the poor and marginalized groups, encourage broad-based 
     economic growth while protecting the environment, build human 
     capital and knowledge, support meaningful participation in 
     democracy, and promote peace and justice in the Americas.
       (b) Statement of Policy.--It is the policy of the United 
     States--
       (1) to promote market-based principles, economic 
     integration, social development, and trade in and between 
     countries of the Americas by--
       (A) nurturing public-private partnerships and 
     microenterprise development;
       (B) improving the quality of life and investing in human 
     capital, specifically targeting education, health and disease 
     prevention, nutrition, and housing;
       (C) strengthening the rule of law through improved 
     efficiency and transparency in government services and 
     increasing civil society participation in government; and
       (D) reducing poverty and eliminating the exclusion of 
     marginalized populations, including people of African 
     descent, indigenous groups, women, and people with 
     disabilities; and
       (2) to establish an investment fund for the Western 
     Hemisphere to advance the national interests of the United 
     States, directly improve the lives of the poor and 
     marginalized, encourage broad-based economic growth while 
     protecting the environment, build human capital and 
     knowledge, support meaningful participation in democratic 
     institutions and processes, and promote peace and justice in 
     the Americas.

     SEC. 3. AMENDMENT TO FOREIGN ASSISTANCE ACT OF 1961.

       Part I of the Foreign Assistance Act of 1961 (22 U.S.C. 
     2151 et seq.) is amended by adding at the end the following:

 ``CHAPTER 13--SOCIAL INVESTMENT AND ECONOMIC DEVELOPMENT FUND FOR THE 
                                AMERICAS

     ``SEC. 499H. AUTHORIZATION OF ASSISTANCE.

       ``(a) Statement of Policy.--It is the policy of the United 
     States--
       ``(1) to promote market-based principles, economic 
     integration, social development, and trade in and between 
     countries of the Americas by--
       ``(A) nurturing public-private partnerships and 
     microenterprise development;
       ``(B) improving the quality of life and investing in human 
     capital, specifically targeting education, health and disease 
     prevention, nutrition, and housing;
       ``(C) strengthening the rule of law through improved 
     efficiency and transparency in government services and 
     increasing civil society participation in government; and
       ``(D) reducing poverty and eliminating the exclusion of 
     marginalized populations, including people of African 
     descent, indigenous groups, women, and people with 
     disabilities; and
       ``(2) to establish an investment fund for the Western 
     Hemisphere to advance the national interests of the United 
     States, directly improve the lives of the poor and 
     marginalized, encourage broad-based economic growth while 
     protecting the environment, build human capital and 
     knowledge, support meaningful participation in democratic 
     institutions and processes, and promote peace and justice in 
     the Americas.
       ``(b) In General.--The President, acting through the 
     Administrator of the United States Agency for International 
     Development, shall provide assistance to reduce poverty and 
     foster increased economic opportunity in the countries of the 
     Western Hemisphere by--
       ``(1) nurturing public-private partnerships and 
     microenterprise development;
       ``(2) improving the quality of life and investing in human 
     capital, specifically targeting education, health and disease 
     prevention, nutrition, and housing;
       ``(3) strengthening the rule of law through improved 
     efficiency and transparency in government services and 
     increasing civil society participation in government; and
       ``(4) reducing poverty and eliminating the exclusion of 
     marginalized populations, including people of African 
     descent, indigenous groups, women, and people with 
     disabilities.
       ``(c) Terms and Conditions.--Assistance under this chapter 
     may be provided on such other terms and conditions as the 
     President may determine, consistent with the goal of 
     promoting economic and social development.

     ``SEC. 499I. TECHNICAL REVIEW COMMITTEE.

       ``(a) In General.--There is established within the United 
     States Agency for International Development a technical 
     review committee.
       ``(b) Membership.--
       ``(1) In general.--The President, by and with the advice 
     and consent of the Senate, shall appoint to serve on the 
     technical review committee--
       ``(A) individuals with technical expertise with respect to 
     the development projects, including grassroots development of 
     Latin America and the Caribbean; and
       ``(B) citizens of the United States with technical 
     expertise with respect to development projects and business 
     experience.
       ``(2) Criteria for appointment.--Technical expertise shall 
     be the sole criterion in making appointments to the technical 
     review committee.
       ``(c) Duties.--The technical review committee shall review 
     all projects proposed for funding using assistance provided 
     under section 499H(a), and make recommendations to the 
     President with respect to the guidelines to be used in 
     evaluating project proposals and the suitability of the 
     proposed projects for funding.
       ``(d) Conflicts of Interest.--A member of the technical 
     review committee shall not be permitted to review an 
     application submitted by an organization with which the 
     member has been or is affiliated.

     ``SEC. 499J. CONSULTATIVE COMMITTEE.

       ``(a) In General.--A country that receives assistance under 
     this chapter shall establish a Consultative Committee to make 
     recommendations regarding how such assistance should be used 
     to carry out the policy set out in section 499H(a).
       ``(b) Membership.--A Consultative Committee should include 
     individuals from civil society organizations that represent 
     or have experience in working in the following:
       ``(1) Marginalized populations.
       ``(2) Trade and small farmer unions.
       ``(3) Rural development and agrarian reform.
       ``(4) Microenterprise and grassroots development.

[[Page S3064]]

       ``(5) Access to government social services.
       ``(6) Rule of law and government reform.
       ``(c) Duties.--A Consultative Committee for a country 
     shall--
       ``(1) make recommendations to the technical review 
     committee established under section 499I and to the 
     appropriate country mission of the United States Agency for 
     International Development on projects proposed to receive 
     assistance under section 499H(a) that affect such country;
       ``(2) have access documents and other information related 
     to project proposals and funding decisions that affect such 
     country; and
       ``(3) develop and publish rules and procedures under which 
     the Committee will carry out its duties.
       ``(d) Conflicts of Interest.--A member of the Consultative 
     Committee may not be permitted to review an application 
     submitted by an organization with which the member has been 
     or is affiliated.

     ``SEC. 499K. REPORT.

       ``The President shall prepare and transmit to the Committee 
     on Foreign Relations of the Senate, the Committee on 
     International Relations of the House of Representatives, and 
     other appropriate congressional committees an annual report 
     on the specific programs, projects, and activities carried 
     out under this chapter during the preceding year, including 
     an evaluation of the results of such programs, projects, and 
     activities.

     ``SEC. 499L. AUTHORIZATION OF APPROPRIATIONS.

       ``(a) In General.--There are authorized to be appropriated 
     to carry out this chapter $250,000,000 for each of the fiscal 
     years 2006 through 2010.
       ``(b) Additional Authorities.--Amounts appropriated 
     pursuant to subsection (a)--
       ``(1) may be referred to as the `United States Social 
     Investment and Economic Development Fund for the Americas';
       ``(2) are authorized to remain available until expended; 
     and
       ``(3) are in addition to amounts otherwise available for 
     such purposes.
       ``(c) Funding Limitation.--Not more than 7 percent of the 
     amounts appropriated pursuant to subsection (a) for a fiscal 
     year may be used for administrative expenses.''.

     SEC. 4. AMENDMENT TO THE INTER-AMERICAN DEVELOPMENT BANK ACT.

       The Inter-American Development Bank Act (22 U.S.C. 283 et 
     seq.) is amended by adding at the end the following:

     ``SEC. 39. SOCIAL INVESTMENT AND ECONOMIC DEVELOPMENT FUND 
                   FOR THE AMERICAS.

       ``(a) In General.--The Secretary of the Treasury shall 
     instruct the United States Executive Director of the Bank to 
     use the voice, vote, and influence of the United States to 
     urge the Bank to establish an account to be known as the 
     `Social Investment and Economic Development Fund for the 
     Americas' (in this section referred to as the `Fund'), which 
     is to be operated and administered by the Board of Executive 
     Directors of the Bank consistent with subsection (b). The 
     United States Governor of the Bank may vote for a resolution 
     transmitted by the Board of Executive Directors which 
     provides for the establishment of such an account, and the 
     operation and administration of the account consistent with 
     subsection (b).
       ``(b) Governing Rules.--
       ``(1) Use of funds.--The Fund shall be used to provide 
     assistance to reduce poverty and foster increased economic 
     opportunity in the countries of the Western Hemisphere by--
       ``(A) nurturing public-private partnerships and 
     microenterprise development;
       ``(B) improving the quality of life and investing in human 
     capital, specifically targeting education, health and disease 
     prevention, nutrition, and housing;
       ``(C) strengthening the rule of law through improved 
     efficiency and transparency in government services and 
     increasing civil society participation in government; and
       ``(D) reducing poverty and eliminating the exclusion of 
     marginalized populations, including people of African 
     descent, indigenous groups, women, and people with 
     disabilities.
       ``(2) Application for funding through a competitive 
     process.--Any interested person or organization may submit an 
     application for funding by the Fund.
       ``(3) Technical review committee.--
       ``(A) In general.--The Fund shall have a technical review 
     committee.
       ``(B) Membership.--
       ``(i) In general.--The Board of Executive Directors of the 
     Bank shall appoint to serve on the technical review committee 
     individuals with technical expertise with respect to the 
     development of Latin America and the Caribbean.
       ``(ii) Criteria for appointment.--Technical expertise shall 
     be the sole criterion in making appointments to the technical 
     review committee.
       ``(C) Duties.--The technical review committee shall review 
     all projects proposed for funding by the Fund, and make 
     recommendations to the Board of Executive Directors of the 
     Bank with respect to the guidelines to be used in evaluating 
     project proposals and the suitability of the proposed 
     projects for funding.
       ``(D) Conflicts of interest.--A member of the technical 
     review committee shall not be permitted to review an 
     application submitted by an organization with which the 
     member has been or is affiliated.
       ``(4) Review of proposed projects.--Not more frequently 
     than once each year, the Board of Executive Directors of the 
     Bank shall review and make decisions on applications for 
     projects to be funded by the Fund, in accordance with 
     procedures which provide for transparency. The Board of 
     Executive Directors shall provide advance notice to all 
     interested parties of any date on which such a review will be 
     conducted.
       ``(5) Consultative committee.--
       ``(A) In general.--Each country that receives assistance 
     under this section shall establish a Consultative Committee 
     to make recommendations regarding how such assistance should 
     be used to carry out the policy set out in section 2(b) of 
     the Social Investment and Economic Development Fund for the 
     Americas Act of 2005.
       ``(B) Membership.--A Consultative Committee should include 
     individuals from civil society organizations that represent 
     or have experience in the following:
       ``(i) Marginalized populations.
       ``(ii) Trade and small farmer unions.
       ``(iii) Rural development and agrarian reform.
       ``(iv) Microenterprise and grassroots development.
       ``(v) Access to government social services.
       ``(vi) Rule of law and government reform.
       ``(C) Duties.--A Consultative Committee in a country 
     shall--
       ``(i) make recommendations to the technical review 
     committee established under paragraph (3) and appropriate 
     country representative of the Bank on projects to receive 
     assistance provided under this section that affect such 
     country;
       ``(ii) have access documents and other information related 
     to project proposals and funding decisions that affect such 
     country; and
       ``(iii) develop and publish rules and procedures under 
     which the Committee will carry out its duties.
       ``(D) Conflicts of interest.--A member of a Consultative 
     Committee may not be permitted to review an application 
     submitted by an organization with which the member has been 
     or is affiliated.
       ``(c) Contribution Authority.--To the extent and in the 
     amounts provided in advance in appropriations Acts, the 
     United States Governor of the Bank may contribute 
     $1,250,000,000 to the Fund.
       ``(d) Limitations on Authorization of Appropriations.--
       ``(1) In general.--For the contribution authorized by 
     subsection (c), there are authorized to be appropriated for 
     payment to the Secretary of the Treasury $250,000,000 for 
     each fiscal year beginning with the fiscal year in which the 
     resolution described in subsection (a) is adopted.
       ``(2) Additional authorities.--Amounts appropriated 
     pursuant to paragraph (1)--
       ``(A) are authorized to remain available until expended; 
     and
       ``(B) are in addition to amounts otherwise available for 
     such purposes.
       ``(3) Funding limitation.--Not more than 7 percent of the 
     amounts appropriated pursuant to paragraph (1) for a fiscal 
     year may be used for administrative expenses.''.

     SEC. 5. SENSE OF CONGRESS.

       It is the sense of Congress that--
       (1) the countries of the Western Hemisphere should 
     collectively provide assistance equal to the amount of United 
     States bilateral assistance provided under chapter 13 of part 
     I of the Foreign Assistance Act of 1961, as added by section 
     3 of this Act, and multilateral assistance provided by the 
     Social Investment and Economic Development Fund for the 
     Americas under section 39 of the Inter-American Development 
     Bank Act, as added by section 4 of this Act, for the same 
     purpose for which such assistance was provided;
       (2) funds authorized to be appropriated to carry out this 
     Act or the amendments made by this Act should be in addition 
     to funds otherwise made available on an annual basis to 
     countries in the Americas pursuant to other United States 
     foreign assistance programs; and
       (3) it should be the policy of the United States to seek to 
     increase the amount of assistance provided to the countries 
     of the Americas from the United States and other members of 
     the Inter-American Development Bank for a fiscal year 
     beginning after the date of the enactment of this Act to an 
     amount that is more than such amount provided during fiscal 
     years beginning prior to such date.
                                 ______