2:35 P.M. EDT
MODERATOR: Good afternoon. We'd like to welcome Assistant Secretary Clayton 
Lowery, who is the Assistant Secretary of the Treasury Department for International Affairs. He'll make a few comments and then he'll take your questions.
ASSISTANT SECRETARY LOWERY: Thank you very much and I apologize for being a little bit late. I got stuck in traffic. I'm here, basically, in New York on a couple different purposes and then I wanted to talk a little bit about some upcoming things that we have going on and then just take your questions.
I'm here in New York for two basic reasons. First is -- one of the things that we work on at Treasury is looking at foreign investment in the United States and the openness of our markets. So we want to talk to people that are in Wall Street and that are in daily contact with the markets and understand what's really going on to see if our people are -- the United States capital markets are as competitive as they've always been -- are people still welcoming mergers from abroad.
And that's kind of one of the things that we're very interested in, because we want to make sure that -- you know, we've taken a lot of discussion in Washington about what's called CFIUS, the Committee on Foreign Investment in the United States. And the Committee on Foreign Investment is to look at the transactions that are happening in the United States to make sure that national security concerns are addressed, but at the same time, it is supposed to be looking at what is foreign investment, to make sure we can protect foreign investment. And we believe that these goals are very compatible; protecting the United States, that's the most important, but also welcoming foreign investment.
And the second purpose of why I'm up here is to talk -- and I just actually finished over at the Council on Foreign Relations -- on just development purposes. We were talking about aid effectiveness. Both -- the Treasury Department has responsibilities in the multilateral development banks. We also have some responsibilities with some of our bilateral assistance and we are having what I would think of as a pretty wide-open discussion about what is working, what's not working in the development community.
And this leads to a couple of things that we have upcoming. Treasury has responsibility for the U.S. Government in all of the multilateral developments banks: World Bank, Inter-American Development Bank, African Development Bank, European Bank for Reconstruction Development Bank, the Asian Development Bank. In the next couple weeks, we're going to have teams going to Ouagadougou, Burkina Faso for the African Development Bank. We're excited about being there because African Development Bank, which is based in Tunisia, has got a new president, it seems to have new energy, and we're hopeful that we can make some progress on getting this institution to focus and be an effective institution for the people of Africa.
The second is the European Bank for Reconstruction Development, which is about a week-and-a-half from now. There's a governors meeting in London. We're excited about that for a different purpose, which is that there's been a series of negotiations over the last -- well, basically, a year or so -- on what's called the CRR, the Capital Resource Requirements for the Bank. And what all that really is, is basically, over the next few years, where are we going to see the institution putting its money?
And our argument has been that the countries in the EU, which needed this institution to help with their transition to more stable economics and market-based economies, have basically transitioned. And it's time for them to graduate so that resources can be used more effectively and where they're more needed and that is in the south and eastern parts of Europe and former Soviet Union, so countries as poor as Kyrgyzstan and Georgia and Armenia -- so that the EBRD could focus its talents and its energy and its finances more towards those regions and less towards these countries that have, basically, access to capital markets.
And an interesting statistic for us is that in the EU-8 countries -- so, the countries that borrow from the EBRD, but are now part of the EU -- the per capita income is roughly about $10,000, something like that. And the countries that are outside of the EU, the per capita income is about $2,500. Obviously, that's a huge difference and that's kind of our point -- let's go towards those countries that need the resources more. And if you go back to the early 90s, when the EBRD started, the countries that are now in the EU also had per capita income of roughly $2500. They've grown to $10,000. That's what we want to see now, but I see that happening in these countries in southern Europe and also in former Soviet Union.
So I wanted to make sure that people understood this because there have been a lot of negotiations going on. The management of the institution, the EBRD, and the President Lemierre have done a good job of pulling together a consensus on a very difficult subject and we're looking forward to those meetings.
Anyway, thank you all very much for being here and I'm happy to try to answer any of your questions that you might have.
MODERATOR: Please speak into the mike and give your name and affiliation before you ask your questions.
QUESTION: Huaiqian Lu with the Xinhua News Agency. Can you share with us your view on the impacts of the current oil price on the U.S. economy? Thank you.
ASSISTANT SECRETARY LOWERY: I think oil prices are obviously high and it does have an effect. In terms of the U.S. economy -- I mean, the U.S. economy is still growing at a very good clip. Jobs are being created. Wealth is being created and even with such high oil prices, I think that basically, we want to see -- you know, the market work as well as it possibly can. The high oil prices are having an impact, but I think that where you see that they're having an impact more is some of the poorer countries that can't adjust as well as an economy as big as the United States.
And so you see this in Africa, you see this in some of the Asian and Latin American countries. It's difficult for some of the real oil importers to deal with this type of price shock. And the United States has been able to overcome it, frankly, because of sound policies and -- you know, a very vibrant, dynamic economy.
QUESTION: Thank you. My name is Choongo Moonga from Incisive Media New York. I wanted to know whether there was some specific focus as far as the group that is going to meet the AFDB. You mentioned the new president who you think is going to inject some renewed focus. What are you expecting there, are you going with special proposals or anything like --
ASSISTANT SECRETARY LOWERY: Well, I think that what usually happens at these banks is, sometimes there's a negotiation that has been going on like what I was talking about for the EBRD. There hasn't been anything like that for the African Development Bank. I think instead, what we have is a new president trying to figure out how to take this institution and make -- get it to the next level. I think for us, we would suggest that the best thing that they can do is to keep some focus.
If you look at the African Development Bank, the list of goals that they have over the last six years or so, they've gone from this big to this big to this big. And that needs to stop. I mean, they can't be -- the institution, in order to be a sound institution and to really help the people of Africa can't be all things to all people. We have ideas as to where we think the institution should focus. We need it to focus on things like making good, sound infrastructure, working with the private sector wherever possible, fighting corruption. And I think that the institution can take that forward. It doesn't have to be necessarily our ideas. We're willing to talk about that. But we do want it to be a focused institution.
The EBRD is an interesting example. It's an institution that has not tried to be all things to all people. It has tried to focus on very specific areas and it's been pretty effective and done a good job. We think the African Development Bank can do the same type of thing. It doesn't have to do the EBRD model, but it should have its focus and figure out what it should be. It should not try to be a mini World Bank.
QUESTION: I am Prakash Swamy from Industrial Economist in India. They talk about outsourcing and it was an issue in the presidential elections, like jobs that have been taken away to India and a few other countries. Now I see a lot of Indian companies doing mergers and acquisitions and coming to U.S. setting up units and creating jobs and employments and just kind of working (inaudible).
What exactly do you think, in your mind, that -- how these two countries can work in developing a strong economy, because the U.S. has been working very closely with India in developing the Indian economy? What do you think that India could do to open the -- or the FDI, the Foreign Direct Investment, in this country? Because India is now cash rich and got billions of dollars as a result and they're looking for opportunities to come to U.S. and your kind answer would help me to do a report back home in India, which would be helpful to the Indian businesses.
ASSISTANT SECRETARY LOWERY: Let me just ask one clarification. Do you mean what can India do to attract more investment or what --
QUESTION: No, no. What can U.S. do to attract investment from India?
ASSISTANT SECRETARY LOWERY: Okay. Well, actually it's a good question. I think that for what India can do and what the United States can do are very different things. The United States needs to be open to investment, open to investment from Indians, who are making money and have good things, good ideas. And the way we -- I think we can do that is basically to keep a sound investment climate for the United States, which means we have to be careful on making -- we want to welcome foreign investments and we think that the people of India could be very good foreign investors for lots of different things. That helps create jobs in our country, so it's good for the United States, and it helps with productivity issues most of the time when we look at foreign investment.
For India, my view is that one of the things that they have to look at, I think, very carefully is investor dispute mechanisms. I'm not an expert, but what we hear from the investment community is that India's investment climate has become more welcoming and more open, but still there aren't really good, sound investment dispute mechanisms to work problems out. And so it's obviously an issue, because investors care about making sure that -- you know, there's going to be disputes and when there are, it should be done as fair and judiciously as possible. And I think that that's something that India could do some work on.
QUESTION: Chris Reese from Reuters news. I was just wondering, with the EBRD -- I know earlier this week you folks said you're going to double your staff there or the EBRD is going to double their staff there in Russia. And I'm just wondering why Russia is a recipient, really, of EBRD attention, when -- you know, it's really got kind of a nice oil income. You know, their per capita figure probably is about $2,500.
ASSISTANT SECRETARY LOWERY: Well, if you look at -- Russia's a huge -- I actually just got back from Russia last night, I think. I just arrived from there. Russia's a huge, huge country. And it has something like -- and this you can't quote because I don't know, but I think it's 87 or 88 different regions within Russia. Some of those regions are as poor as any African country, some of them are much more wealthy and are much more like -- have a wealth of Western Europe or maybe like one of the EU-type of countries. So I think that if the EBRD is moving staff to Russia, what we would probably suggest is that they work as hard as they possibly can on the poorer regions of Russia so that they can actually start seeing greater development in the small and medium enterprises.
I was just actually at a small -- factory is probably the right word. They basically build plastic to kind of -- you know, for housing and things like that. It has gone from a -- they had received money through an EBRD program to help small and medium enterprises develop, it has gone from basically having, you know, five or ten people working for it, to 100 people. And it is something that -- the reason they were able to grow, and I asked them about this, is because of the EBRD financing through a banking system. So it's helped building up the banking system, but it was also helping with the small and medium enterprise development.
Russia still has many needs and the EBRD can help in that area. We think the ERBD needs to move even more of its resources to the countries that are basically the south of Russia, countries like Georgia and Armenia, which have much more poverty -- have much more poor problems and are much further behind Russia even, I think -- I mean, in just what we read, in the transition to a more market-oriented economy. That said, Russia also has lots of areas that it needs assistance with.
QUESTION: What is the message from Wall Street? What are these folks telling you?
ASSISTANT SECRETARY LOWERY: I think that, you know, there's some worry. I mean, there are concerns out there that the investment climate for the United States is there. Are we as welcoming as we used to be? And is there competition from other markets -- and so, are countries looking elsewhere to make their investments. And they just -- I think that right now the data is not saying that it's completely that way, but I think, that it's a worry, it's a concern. And so they're just -- is it as bad as sometimes it looks or is it, you know, better and you just don't see the data?
And what we're hearing right now is that there's a lot of concern. It is concern that people have been testifying on lately in front of Congress, to make sure Congress understands these concerns. And then some of the things like the FCC Commissions that people can understand what's going on with the FCC. And I think that it's a concern we take seriously. Foreign investment in our country is vital and we're open to it and we want to see if we're making mistakes in Washington -- how do we correct those mistakes.
QUESTION: Hi. My name is Yan Juan Wang from Beijing Review. Your department just released the semi-annual report on the exchange rate policies of other countries. It's recognized that China has made some progress in making the exchange rate more flexible, but it's not enough. To what extent do you expect RNB appreciation? And some people say RNB has the (inaudible) value about 40 percent. What do you think about it?
ASSISTANT SECRETARY LOWERY: I think that what our issue is, is that it is the pace of making the exchange rate more flexible has not been fast enough. That is the issue that is of most concern. Actually -- if you ask -- if you sat here with a room full of economists, they'd give you different views on what the exchange rate should be. I don't actually have a view.
What we're saying is that we think that the exchange rate regime needs to be more flexible. We think that that is something that can be helpful for the global economy; we think that it can be helpful for the Chinese economy in terms of long-term growth sustainability. So I don't have a comment on the exact level. What I have a comment on is that we think that China's made some progress, but we would like the speed of what they're doing in terms of making their exchange rate regime more flexible to increase.
MODERATOR: Any additional questions? Okay. If not, thank you for coming. Mr. Lowery, thank you very much for coming.
ASSISTANT SECRETARY LOWERY: Thank you very much.
