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The Overseas Private Investment Corporation (OPIC) is the US government’s development finance institution, mobilizing private capital to address development challenges and advance US foreign policy priorities. CGD analysis of its structure, guidelines and investment decisions equips policy makers with evidence and ideas to make an effective institution ever stronger. Our work on how to scale up OPIC has broad bipartisan support in Congress.
Demand for development finance as a key complement to traditional aid is growing, but despite the impressive strength of the US private sector, the US government’s ability to respond—to date— has fallen short. The good news: Congress got the memo.
Center for Global Development
HShulman@cgdev.org, (202) 674-8757
Washington – Today, the Trump administration included in its budget funding for a new Development Finance Institution (see page 129 here).
Below is a statement from Todd Moss, a senior fellow at the Center for Global Development, who has been a leading advocate for modernizing U.S. development finance over the past several years:
“Because of the changing global landscape, development finance – rather than aid – is the future. Many previously poor countries are richer today and are looking for partnerships with the United States to deliver jobs, roads, and electricity instead of just aid.
“That’s why it’s so important that the administration included a proposal in its budget to create a new development finance institution. Expanding our commitment to development finance promotes deep capital markets, our culture of entrepreneurship, and our belief in free markets while at the same time spurring economic growth in the developing world.
“The White House today has shown its willingness to build markets for American goods in fast-growing emerging markets, support private sector led growth in our strategic allies, and ensure that U.S. companies are competing in these markets with Chinese and European firms—all at less than zero cost to taxpayers. Now, it’s up to Congress to finish the job.”
OPIC recently announced it will invest $2 million in a Development Impact Bond (DIB) aimed at improving the availability and quality of cataract surgery services in Cameroon. Specifically, OPIC’s investment will support the Magrabi ICO-Cameroon Eye Institute, a new hospital with an efficiency and financing model based on the acclaimed Aravind Eye Hospitals, over several years. The OPIC news is particularly exciting for four reasons.
On June 5, President Trump announced his intent to nominate Ray Washburne as the President of the Overseas Private Investment Corporation (OPIC) and David Bohigian as Executive Vice President. OPIC, as America’s development finance institution, advances US foreign policy priorities by leveraging debt and insurance to unlock private capital in developing countries.
Congress has officially wrapped up the FY2017 appropriations process—a mere seven months behind schedule. Much has changed since last fall, including the rhetoric on US foreign aid spending from the sitting administration. And big questions have been swirling about whether the bipartisan consensus in Congress on the importance of effective foreign assistance will hold in this new environment. At least in very short term, the answer appears to be yes.