Tomorrow, the House Committee on Foreign Affairs is scheduled to hold a hearing entitled “Financing Overseas Development: The Administration’s Proposal.”
The Administration strongly supports the goals of H.R. 5105/S.2463, the ‘‘Better Utilization of Investments Leading to Development (BUILD) Act of 2018,’’ to consolidate the Overseas Private Investment Corporation (OPIC) and certain aid programs into a reformed international Development Finance Institution (DFI) that catalyzes market-based private sector development and economic growth in less developed countries to advance the national interests of the United States. Current U.S. development finance tools are outdated and fragmented across multiple Federal agencies, and often are not well coordinated. This has hampered our ability to achieve key U.S. foreign policy and national security objectives and resulted in inefficient use of taxpayer dollars. Reform will catalyze market-based solutions as a clear alternative to state-led financing initiatives that undermine state sovereignty. Reform will also help the United States compete more effectively in this new era of strategic competition.
The legislation is broadly consistent with President Trump’s statement at the Asia-Pacific Economic Cooperation forum in November 2017 that committed the United States to reforming its development finance institutions to better incentivize private sector investment in developing countries. The goals of the legislation are also consistent with the President’s National Security Strategy and the Fiscal Year 2019 Budget Request, which proposed the creation of a consolidated, reformed DFI with strong institutional linkages to the Department of State and the United States Agency for International Development (USAID) to enhance America’s global competitiveness and help drive economic growth in the developing world.
The Administration looks forward to continuing to work with Congress on H.R.5105/S.2463 as the bills progress through the legislative process. In particular, we believe the bills need to be strengthened to further ensure that the important work of this institution aligns with U.S. national interests and has strong institutional links to the programming of USAID and other development agencies. The bills must also include a revised funding structure for the institution and reforms to better manage risk to the U.S. taxpayer and avoid displacing private sector resources.