[Congressional Record Volume 165, Number 194 (Thursday, December 5, 2019)]
[Senate]
[Pages S6879-S6880]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                               World Bank

  Mr. GRASSLEY. Mr. President, I come to the floor this afternoon to 
discuss two issues: one dealing with the World Bank and another one 
dealing with the Department of Defense's inability to get clean audits.
  Today the World Bank is releasing its country partnership framework 
with China. Reportedly, this includes $1 billion to $1.5 billion of 
loans to China per year and $800 million to $1 billion in private 
sector investment.
  Keep in mind that the World Bank was created to help economic 
development in the world's poorest countries. China is now the world's 
second largest economy after the United States. Also, the United States 
is the World Bank's largest contributor. I think many Americans would 
question why so many American tax dollars are going to support low-
interest loans in China.
  In China, there is a large and growing body of evidence of human 
rights abuses in Xinxiang, including mass internment camps. Reports 
indicate that these camps are centers for social control and political 
indoctrination. Chinese authorities reportedly mistreat or even torture 
detainees, while requiring them to engage in forced labor and to 
renounce their religion and their culture. Yet the World Bank has 
supported a program called Technical and Vocational Education and 
Training Project in Xinxiang Province.
  This is wording very close to what the Chinese Communist Party 
euphemistically calls its internment camps. Plus, one reporter has 
uncovered documents that these schools purchased barbwire, tear gas, 
and body armor using other funds--and, of course, funds are fungible.
  Institutions like the World Bank have a great responsibility to 
further assess critical human rights risk and religious freedom, such 
as those exhibited in Xinxiang in any region where it lends money.
  The World Bank's own social framework standards state that when 
assessing social risk and impacts, the Bank must assess threats to 
human security and impacts on the health, safety, and well-being of 
workers and project-affected communities. The Bank and other such 
institutions cannot adequately assess a project's full impact without 
monitoring and examining reports of widespread human rights abuses in 
any local area.
  On November 16, the New York Times published leaked Chinese records 
indicating a coordinated effort going back years, directed by General 
Secretary Xi, to detain hundreds of thousands of Uighurs, Kazakhs, and 
other Muslims in internment camps and to unleash the tools of 
``dictatorship'' on the Xinxiang Muslim population. Given these 
repeated reports about repression in Xinxiang that date back even 
years, it is hard to see how any project in that region could meet the 
Bank's social framework standards. There needs to be a periodic 
internal review of risk assessment mechanisms to ensure that they are 
appropriately calibrated to capture changing risk profiles.
  I question whether the Bank's oversight processes are adequate, given 
its own assessments saw no issue with these intern camps that go by the 
professional name of Technical and Vocational Education and Training 
Project--and I am referring particularly to those in Xinxiang Province.
  In a statement on August 29, the World Bank stated that it had 
conducted supervision missions twice a year since the project started 
and that these missions included a review of social safeguards and a 
monitoring and evaluation review. The World Bank found ``no evidence 
from subsequent reviews that funds were diverted, misused, or used for 
activities not in line with project objectives or World Bank policies 
and procedures.''
  However, just last month, the Bank raised the environmental and 
social risk ratings from moderate--the second lowest level--to 
substantial and then to high--the highest level. It is very 
disappointing that very little happened in upgrading the risk 
assessments on this project until after congressional attention, even 
with an internal whistleblower raising the matter. This seems like a 
failed process to me when routine audits and a whistleblower complaint 
do not catch anything, despite increasingly concerning reports in the 
media about mistreatment and abuse.
  I have written a letter to the Bank President, Malpass, asking 
questions about these systemic concerns. Moreover, I questioned why a 
country like China, whose economy has far surpassed the threshold at 
which it is supposed to graduate from rural bank funding, is now and 
forever still taking loans.
  The World Bank was created for a very worthwhile purpose--to help 
poor countries that cannot, on their own efforts, assess capital 
markets.
  Both China and Russia today have well surpassed the World Bank's 
graduation threshold and have access to capital markets. Yet American 
taxpayers are called on to do more. Yet China then continues to borrow, 
on average, $2 billion a year from the World Bank, making it one of the 
Bank's top borrowers--the second largest economy in the world and one 
of the Bank's top borrowers.
  Countries like China or Russia that have seen the most economic 
progress should not seek to maintain access to the Bank's preferential 
lending rates and technical support. Moreover, these are our two major 
geopolitical foes.
  I have previously highlighted China's intellectual property theft and 
foreign influence activities at American universities as just an 
example of other things I looked at in the case of China.
  Russia's illegal occupation of territory in Georgia and Ukraine and 
its ``active measures'' against democracies, including the U.S. 
democracy, make it effectively an outlawed state. Meanwhile, China does 
substantial foreign lending of its own, which it uses as a tool of 
geopolitical influence over other countries.
  Now, just think, through the World Bank, they get U.S. taxpayer 
dollars, and then the country is still so rich that they can lend to 
many other nations around the world to increase the geopolitical 
influence of China, and that country's lending does not follow 
international development finance standards, nor does China disclose 
the amounts or terms for loans that it offers.
  Through the Belt and Road Initiative in China--this initiative is a 
process where they invest in other countries to have Chinese influence 
in these other countries--this Belt and Road Initiative in China has 
raised concerns about debt sustainability in recipient countries. They 
can invest money in these countries, and then they have an agreement 
that if the loan isn't paid, then China takes over, enhancing their 
influence--a lot of it for military purposes.
  A March 2018 report from the Center for Global Development assessed 
the current debt vulnerabilities of the countries I just referred to, 
identified as potential Belt and Road Initiative borrowers. Out of the 
23 countries determined to be vulnerable to debt distress, the center 
identified 8 countries ``where Belt and Road Initiative appears to 
create the potential for debt

[[Page S6880]]

sustainability problems, and where China is a dominant creditor in the 
key position to address these problems.''
  The World Bank, again using American tax dollars, should not be 
lending to wealthy countries that violate the human rights of their 
citizens and attempt to dominate weaker countries through their loans, 
whether it is done for military reasons or for economic reasons.
  The State-Foreign Operations appropriations bill contains funding and 
authorization for a large capital increase for the World Bank. In other 
words, what I just said--the Senate is going to be facing this issue. I 
have developed an amendment to this bill that would insert language 
requiring the U.S. representative to the World Bank to work to defeat 
any project in a country that has reached the World Bank's own 
``graduation threshold'' and, secondly, that is designated by the State 
Department as a ``country of particular concern for religious freedom'' 
or is on the watch list for such designation. Both of those would 
include China and Russia at this point. Countries with broadly 
documented violations of international norms, human rights, and 
religious freedoms should not be given the privilege of accessing 
preferential loans that then limit access to other countries in need.
  In other words, the second largest economy in the world--China--by 
getting loans from the World Bank at the same time they violate the 
human rights of their people--developing countries that need the loans 
and resources are not getting them because they are going to the 
wealthy nations.