Rethinking how we handle development finance
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Way back in July 2015, Center for Global Development researchers Ben Leo and Todd Moss revealed the new landscape of development finance.

It turns out that in developing nations, a small minority of citizens were most concerned about food, education and health care -- the areas most targeted by U.S. development policy. What most people worried about, in fact, was employment, infrastructure and economic policy.

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In the evolving space of increasingly prosperous nations, they noticed two key deficiencies in traditional U.S. aid policy:

  1. “development dynamics are shifting rapidly from a donor-recipient aid relationship to win-win partnerships involving public and private actors;” and,
  2. “aid agencies typically are not positioned to address many pressing development priorities, such as expanding economic opportunities in frontier markets.”

The development finance arms of the world’s other prosperous nations have been modernized to include the capacity for investment in equity, technical assistance and first-loss funding. The Overseas Private Investment Corporation remains lacking in these areas, which leaves U.S. private sector development unable to take advantage of many mutually beneficial opportunities.

What Leo and Moss proposed as a remedy for these inefficiencies makes for prophetic reading: the creation of a full-service, self-sustaining U.S. Development Finance Corporation that delivers development results, advances U.S. foreign and commercial policy objectives and reduces the federal deficit through modest operating profits.

Now before the Senate, The BUILD (Better Utilization of Investments Leading to Development) Act of 2018 does exactly that. The BUILD Act has been a long time coming, and at The Borgen Project we applaud the work of Sens. Chris CoonsChristopher (Chris) Andrew CoonsDemocratic senator: Attacks on Saudi oil refineries 'may call for military action against Iran' Senator asked FBI to follow up on new information about Kavanaugh last year The 13 Republicans needed to pass gun-control legislation MORE (D-Del.) and Bob CorkerRobert (Bob) Phillips CorkerTrump announces, endorses ambassador to Japan's Tennessee Senate bid Meet the key Senate player in GOP fight over Saudi Arabia Trump says he's 'very happy' some GOP senators have 'gone on to greener pastures' MORE (R-Tenn.) and Reps. Ted YohoTheodore (Ted) Scott YohoCNN slams GOP for not appearing on network after mass shootings, conservatives fire back Conservatives call on Pelosi to cancel August recess The 27 Republicans who voted with Democrats to block Trump from taking military action against Iran MORE (R-Fla.) and Adam SmithDavid (Adam) Adam SmithIran talks unlikely despite window of opportunity GOP lawmakers call for provisions barring DOD funds for border wall to be dropped Warren's pledge to avoid first nuclear strike sparks intense pushback MORE (D-Wash.) to bring this piece of truly bipartisan legislation before Congress.

That OPIC requires congressional discretion to approve even its most basic ongoing expenses is representative of how ossified these instruments have become. By combining the four vehicles for development finance -- OPIC, USAID’s Development Credit Authority, Enterprise Funds, and the Office of Private Capital and Microenterprise -- the BUILD Act has the opportunity to modernize and streamline development finance with one move.

The reality of helping other countries build their way to sustainable prosperity is that the dividends of development are shared among all parties. More than half of all U.S. exports go to developing countries, and a rising tide of infrastructure and stability in these nations will lift the boats of more potential consumers in these U.S. company markets.

Any opportunity for coherence and synergy in the delivery of development finance should be welcomed, from the perspective of nations in need, companies with untapped potential and the U.S. taxpayer.

Brendan McBryde is a managing editor for The Borgen Project, a national campaign working to make global poverty a focus of U.S. foreign policy. The Borgen Project works to build support in Congress for initiatives that improve living conditions for people hit hardest by poverty and hunger.