Investing to end poverty and improve social outcomes around the world is gaining favor.
Now, the Trump administration, with bipartisan support, is working on plans for a new U.S. development agency, reports Devex.
Such a bank, which could be announced by the end of the year, would “signal a remarkable turnaround for President Donald Trump’s administration, whose 2018 budget proposal had sought to gut the existing development finance agency, the Overseas Private Investment Corporation,” says Devex.
In April, Rick Beckett, CEO of impact investing firm Global Partnerships made the case for expansion. “What sense does it make to eliminate, rather than expand, OPIC’s successful efforts to expand market-based solutions to poverty in many of the worlds’ poorest countries?” asked Beckett on ImpactAlpha. “What sense does it make to eliminate an agency that makes money for US taxpayers, reduces the US deficit, creates US jobs, and effectively promotes economic development on a global scale?”
The new bank could expand OPIC and fold in agencies that touch development finance, including the U.S. Trade and Development Agency and the U.S. Agency for International Development’s Development Credit Authority. The plans for an expanded OPIC might also include adding new financial mechanisms such as direct equity investments.
“European and Chinese counterparts are truly investing trillions of dollars in these sort of efforts,” David Bohigian, OPIC’s executive vice president, said earlier this year. “America is ready for a 21st century OPIC.”
Over the past five years, former OPIC CEO Elizabeth Littlefield told Devex, the agency put in place new systems for risk, client and information management, giving it the “institutional architecture build for scale.”