United States Relationship with Multilateral Development banks. Assistant treasury secretary Alexia Latortue answers questions on support for ukraine , Digital Divide, and debt restructuring developing countries. Hour. I am ready for my close up. We are live. Im just kidding. Alexiala tut y is a effective Public Servant and lucky to have her as the assistant secretary of the treasury for International Affairs for trade and development. Its a really big job at the Treasury Department. She oversees the relations and has served at the Treasury Department before. She is really smart and really effective. You can read her bio. But i like her personally and everybody in town thinks she is smart, effective and dont want to mess with her. So im really happy to be having this conversation. Im interested and i hope if i call you lexi. Wonderful. She has an Important Role at treasury, but im obsessed with leadership. Did you follow my work and i have written after poem after poem and paper after paper. The United States has to ride on the Multi Lateral system. That is not the term but for my people, we need to mind the story. Need to mind the store. Part of the way we do that is through effective leadership like alexia. They are a force multiplier in my view if we are writing heard of a western form of globalization and if we are not writing heard it is another form of globalization and you leave a vacuum someone else is going to fill that vacuum. And but i would just say because i think there is a lot on the agenda because of the work shes doing and the impact shes having. So, ok. Having said all that, thanks for being here and welcome. So could we just start, how did you get into this business . How do you get into the Development Business . Thank you so much for having me. If there is someone with smart, with flair with frank talk, who is a patriot himself and everything he does every day and [indisindiscernible] he makes our job easier because we benefit. I want to thank you, dan, for your tireless commitment. You know, i got in this business almost by osmosis. My father worked in international development. I grew up for 10 years in west africa and austria and he was working for an international organization. All our dinner table why did some people live in countries that have less opportunities than others and how do you change that . And i have to admit, i wasnt particularly creative or rebelled against what my parents did, i was drawn to it and i would say this idea of equality of opportunity is a red thread in my professional career that matters to me deeply. We drove around m. B. D. Multi Lateral Development break. When you speak to people what is the world bank. These are very smart people. But they dont follow the finer points or something called the you can get a car loan from these organizations. Not because they are dumb, because they speak in not accessible to earth people and explain to staffers who are starting for a staffer tore an important member of congress, how do you explain what these organizes are. I know what this is and the folks in this audience know but folks in Television Land who may not follow this, what is these institutions important . We need the support of people including on the hill who are working on thousand different issues. Its not surprising they dont its not a crack on them but to your point, they have 25,000 other things to deal with and the finer points of something called a Capital Increase or quota reform is 250 on the list. If you go to the creation of these institutions, postworld war ii. Countries have been devastated. You need to rebuild those countries and economies and that costs a lot of money. So what is an effective, efficient way to do that . And these Development Banks are just that, by pooling capital from countries from around the world. Its pooling capital from countries around the world, using that capital to go to Capital Markets to rise even more money and the taxpayers money is plult applied over and over again. You have a fantastic value for money and Financial Model. Thats the first message i would give. Secondly, these institutions have learned it is not just about money but what are the right policies, what are the right reforms and right choices that countries make to enable development and these institutions because they work around many countries in the region and around the world have a lot of Lessons Learned about what works and what doesnt and feed them back out in the form of support to policy makers in the form of Technical Assistance and countries build their own capacities and abilities for the work they do. Highly leveraged, super great knowledge and the last thing, they are a place that bring people around the table, not just peoples money but bring people around the table. That is the definition of Multi Laterallism. And having people around the table trying to think through what is the best way to think about primary education or response to a Global Pandemic having people around the world and same table trying to slug through solutions have values in and of itself. Money, knowledge, convening power. Collective action and a form of cautionary and burden sharing, right . They do grants. Super duper. Ok. Ok. So theres the world bank, there are a series of regional Development Banks. The Interamerican Development bank, Asian Development bank and erbd and now p parts of subsaharan africa. Collective action. So the there is a series of specific questions one might think, but let maybe we might talk about climate has been an important priority. If i said to you the World Bank Group and regional Development Banks and Climate Change, how has the Biden Administration approached the mbds and approaching the challenges of climate . The Biden Administration and Treasury Department has been approaching climate in a very bullish way. We talked about what benefits of these Development Banks. The world bank being created after world war ii. The world has changed since their creation. Secretary yellen went to these Development Banks and said given that we have seen for example for covid extreme poverty increasing for the first time after decades of progress and not be educated, we see not just the pandemic example with Climate Change, we see reversal of Development Gains whether in the agricultural field, for example, but also increasing violence that we see around the world how serious and strains on fiscal budgets because they have to spend more and more on security. Given these three global challenges, Climate Change and pandemics and and conflict are not just threatening but reversing Development Gains, we need the institution to address that. So they need to think about infrastructure, operating models and Financial Capacity to help countries respond to these global challenges in a way that commits sustained progress on Poverty Reduction and sustained progress on inclusive works. That means integrating and their country diagnostics thinking through the positive and negatives of all these global challenges. Let me be a more simple, you are building a road today, if that road is not resist tapt to extreme heat or water, you are going to have to rebuild again. Lets spend the dollars wisely and build it smartly the first time. And thats a simple way of talking about how these institutions need to take account and the banks have stepped up in massive ways. Theres been a series of International Agreements on climate. Concept called just transitions where countries who are poor say i didnt contribute to the challenge of climate. I want to build a gap pipeline or take oil out of the ground, should m. B. D. s be funding oil and gas projects which is the technical how should they be funding oil and gas projects . I want to be very clear. There is no resilient longterm inclusive growth that is also not green. I do not one person around the world, one leader around the world, how do you transition to that. And thats difficult and thats where the just piece comes through, not Just Energy Transition. As you figure out how to unlock the plentiful green jobs that will be unlocked because that has to be front and centerrer and manage that people dont lose out in shortterm ways. So, you know, the United States is very clear that we believe that countries need to develop including in the energy space without using fossil fuels. We have a collective of methodologies about how to Design Projects in line with the Paris Agreement and contributions. And so we work with the m. B. D. s to look where the Clean Energy Alternatives in a way that supports Energy Access and that remains a huge challenge in too many parts in the world and promotes Energy Security because we much seed the risk of reliance and on Energy Sources. All three of those, clean energy, Energy Security have to come together. We prioritize clean energy. We asked countries in the m. B. D. s to do that. In the instances where there is no alternative particularly for lowIncome Countries there are are exceptions where we can support, for example, gas if thats needed. Big message is the trajectory of the future is clean energy. We have three goals that go together and for some countries where there is no alternative or Major National security prioritization there is a small window because we are pragmatic to consider other sources of energy. Mining and minerals and trying to get smarter about mining and minerals and i think if we are going to have a carbon transition for e. V. Batteries and defense and iphones, we are going to need a bunch of rocks out of the ground and turning them into minerals. I dont believe the American People are going to be cool with the idea, 40 70 that these minerals that are important are controlled by the Chinese Communist party. And this is my view, i think we are going to have a lot of problems in the United States saying ok, i was with the governor of arkansas two days ago and told me the Third Largest deposit of lithium is in arkansas and what oil has done for tesla and maybe this is the wrong place to say that she wants lithium that to be. If you said lithium. Third largest resource in the world is arkansas for lithium, i would have never in a million years thought about that. I dont want a that we are going to solve nimby problems in the United States and the way with lawsuits and Everything Else and permitting reform, i dont believe it, so we have to go to the global south and different kind of partnership. The m. B. D. s are like the accelerant for that. We should be like if we were serious about it, we would have a vice presidency for mining and minerals. I know how they work. When you grow up, you can become Vice President of minerals at the world bank. There is not a Vice President i dont think there is a directorship for mining and minerals. And im sure there is like a sprinkling, i dont want to say crumbs or pebbles but pebbles across the system but not a big initiative. I want to talk about if we want to have a carbon transition, tell me, 30 times, amount of cobalt. Aint going to be here and when the smoke clears, when the American People figure out they are switching their dependence from oil to the peoples republic of china there is going to be a collective freakout. What is the picture of mining and minerals . I have to get smarter about mining and more comfortable about mining and what the smart mining and responsible mining look like. What you you were saying you were alluded that the m. B. D. s have been they break out into cooties and work on six root canals than mining and minerals . There are a lot of risks, environmental risks, social risks and there was a retrenchment we have got to look at mining again. And for the reason that you just mentioned, nickel, cobalt and lithium and not have the energy transition. Dive into complexity and figure out how to support countries and by the way, it happens to be a beautiful thing where a lot of emerging markets happen to have those resources that is in perfect alignment of what the Global Economy needs that could be a winwin when they are shoveling a lot. The question becomes what do you need to do. Mining isnt just about getting the stuff out of the ground but the right policy regimes in place around mining, lead issues. How do you spread the residue for mining that is shared and enjoyed and all those issues of governance around this is important. And i think countries are saying this time around, we just dont want to be exporting materials but want to extract more value and we want to see refinement in our countries as well. You alluded to this in your brilliant opening, a lot of that processing is dirty, the technology in the United States dirty. Very Energy Intensive and there is a lot of research and Development Needed to find the most efficient clean ways to do the processing and that is a big area of work as well and environmental labor standards. And under the japanese e7 presidency, they came up with the idea of resilient and inclusive surprise chain enhancement. The rise proposal and not only talk about the financing but do that work around of how these countries can answer the Global Supply chains and what work is needed, policy work and so countries can engage in this. And Vice President is here he has come back. And made a return. Youre right [indiscernible] they are working right now with part of the americas prosterity partnership and doing competitiveness analysis. Several supply chains including Critical Minerals to figure out what they can be competitive in this space. I want to come to other things and there is. [indiscernible] what is that and tell us about what the Biden Administration is supporting . One of my favorite topics and great to my colleagues here, in march, the i. D. B. Group made the important decision notably its private sector arm part of the group that works with the private sector called i. D. B. Invest and the shareholders approved a new Business Model for that institution and 3. 5 billion Capital Increase. The super model is powerful because at its base the way im going to have impact is not deploying by my 3. Billion but my dollars and skill sets and develop them when they get to a point that the return on investment might be attractive to the private sector and go to go share that asset and that investment with the private sector and bring them earlier. Doing its role of taking the risk and identifying and inviting the private sector. This is originate the share model and doing this not only on a transaction basis which is tiny for the private sector but pool approaches to have a bunch of assets together. With the new capital i. D. B. Will take more risk including in smaller economies in the caribbean, and do more equity which is a high impact instrument as well. So we expect to see about 102 billion over the next 10 years and whats important is we not only discuss i. D. B. Invest in march, to have a strong private sector and bunch of reform that we adopted around the new strategies of the public side of the house to make sure Investment Climate that the private interest sector will come and we looked at i. D. B. Labs which is the entrepreneurial part of startups and does the building of the private sector and had a holistic strong group coming out of the march meeting. The Biden Administration has made a request to support this Capital Increase for i. D. B. Invest . Absolutely. It is in the fiscal 2025 budget. The argument would be if the Congress Supports this and makes a small contribution, theyll leverage multiples of that money . Absolutel