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One of the most dependable areas of bipartisan consensus has always been the United States government’s support for global development. And now it seems the Trump administration has found agreement with some members of Congress on at least one critical part of the global development agenda: Supporting U.S. commercial engagement in emerging markets.
The White House has unveiled plans to transform the small 250 person Overseas Private Investment Corporation into a more robust global financing platform — what they are calling the “U.S. development finance institution.”
It calls for the consolidation of the United States Agency for International Development’s flagship private sector engagement tool, the Development Credit Authority, into the new DFI. For the past 18 years, DCA has been partnering with local banks to channel local private capital toward U.S. development objectives.
Since its creation in 1999, it has unlocked nearly $5.2 billion of private capital in some of the world’s toughest sectors and countries and has transformed the way USAID development professionals think about market-based solutions to poverty.
Having seen the development of the DCA tool and its significant expansion within USAID, we are alarmed by the notion that it should now be stripped from the agency and placed into the new DFI to “increase operational efficiencies” and “reduce redundancy.”
In our view, doing so will have the exact opposite effect and will greatly reduce USAID’s ability to incorporate the private sector into its development work.
Read the source article on Development Credit Authority by Eric Postel and Andrew Natsios at Devex International Development