WASHINGTON (MNI) – The following is U.S. Treasury Secretary Tim
Geithner’s statement Saturday morning to the Development Committee of
the International Monetary Fund and World Bank:

We meet at a time of new challenges to economic growth and
development. These challenges require governments working together with
international financial institutions. In the advanced economies, growth
has slowed and financial stresses have intensified in Europe. In
middle-income countries undergoing historic transitions, specifically in
North Africa, growth has slowed just as expectations for greater
opportunity, especially among the region’s youth, have soared. In some
low-income countries, specifically in the Horn of Africa, famine and
drought are pushing millions of people into poverty and hunger,
reversing decades of development gains.

The Middle East and North Africa is undergoing one of the most
important transitions of our time. We are committed to working with our
partners to support transitions in Egypt and Tunisia. The success of
these emerging democracies will hinge on building strong and inclusive
economies that improve people’s lives, especially the lives of young
people. International financial institutions will be central to this
effort. We appreciate the efforts of the multilateral institutions in
supporting near-term financial needs of transition countries and in
supporting home grown reforms that improve governance, enhance growth,
and expand opportunities for citizens.

Let me welcome to the international community Libya’s Transitional
National Council, which led the struggle to overthrow the Qaddafi regime
and is now leading the effort to establish new political and economic
institutions to provide a better future for the Libyan people. As
endorsed in the latest U.N. Security Council Resolution, we welcome the
role of the International Monetary Fund (IMF) and the World Bank in
helping Libyan authorities to develop transparent and accountable
mechanisms for managing the country’s public finances.

In Africa, several countries, including Djibouti, Ethiopia, Kenya,
and Somalia, face one of the worst famines in decades. At this very
time, we commend the response of the World Bank and other multilateral
agencies to this acute crisis which threatens over 13.3 million people –
2 million of whom are children under the age of five. To help prevent
such catastrophes from continuing to strike the region, we support the
decision by members of the International Development Association (IDA)
to mobilize nearly $1.9 billion in resources, including from the new
crisis response window to increase safety nets, jump-start crop and
livestock production, and improve the region’s resilience through
investments in drought-resistant agriculture and climate-resilient
technologies.

This crisis, coupled with two food price spikes in the past three
years, calls for concerted global action to strengthen food security and
agriculture. Our investments in agriculture must spur long-term
transformations by increasing agricultural productivity and incomes of
smallholder farmers. This is one of the best ways to build the
resilience of communities that depend on agriculture and are vulnerable
to shocks. Furthermore, since most small farmers are women, investments
in agriculture are also a strategy for advancing gender equity. We
applaud the World Bank’s important work promoting gender equality as a
critical element of sustainable and inclusive economic growth in
agriculture, as well as other sectors.

These principles are at the heart of the Global Agriculture and
Food Security Program (GAFSP), which is now in its second year of
operation. GAFSP has proven to be a key source of transparent and
competitive financing for country-led, evidence-based agricultural
development strategies in the world’s poorest countries, encouraging
countries to take a comprehensive and inclusive approach to agricultural
investment and reform. While GAFSP has been able to provide grants to
12 countries that will improve the incomes of nearly 7.5 million people,
the fund has been depleted and we have had to turn away more than 20
countries. Even within a difficult budget environment, we are striving
to accelerate our contributions, and we call on other international
donors to do the same.

The drought in the Horn of Africa demonstrates the severity and
intensity of risks associated with changing climate conditions that will
only intensify over time. Our developing country partners are designing
and implementing innovative programs through the multi-donor Climate
Investment Funds (CIFs), and Global Environment Facility (GEF), which
will help mitigate the worst effects of climate change and develop local
expertise in the process.

From global poverty to historic transitions to climate change, the
World Bank and the regional development banks are on the front lines of
the globe’s most pressing economic and national security challenges. In
an environment of tight national budgets in advanced economies, no other
institutions can so effectively leverage our limited resources or more
strongly reflect our shared priorities of reducing poverty and hunger.
They are vital for addressing the challenges of the moment and will be
integral for responding to changes that lie beyond the horizon.

We will seek to increase the effectiveness of the World Bank and
the regional development banks in this time of heightened need and
constrained resources. We will also continue to monitor implementation
of each bank’s reform agenda and seek improvements in the definition,
measurement, and delivery of results to maximize our investments. These
reforms will be essential as we work closely with our Congress to meet
our capital increase commitments and replenishment of the International
Development Association.

** Market News International Washington Bureau: 202-371-2121 **

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