Keith Krach
Under Secretary for Economic Growth, Energy, and the Environment
U.S. State Department
September 26, 2019
AS DELIVERED
I would like to thank the President of the General Assembly, His Excellency Tijjani Mohammad Bande, and the Permanent Representatives of Ghana and Canada for organizing today’s event. Thank you as well to the other esteemed delegates who have helped make these interactive dialogues a success.
The United States’ commitment to international development is enshrined in President Trump’s National Security Strategy. We recognize that stable and prosperous economies enhance international security and boost opportunities for worldwide investment. Our commitment to financing sustainable development is clear in everything we do.
The United States is the largest donor of Official Development Assistance in the world and a long-standing champion of private sector investment in developing countries. We will remain a stalwart defender of international norms and the highest standards of accountability and transparency. Good governance and the rule of law, paired with a market-based economy, are key to sustainable economic growth.
I’d like to highlight two initiatives that are illustrative of U.S. leadership and innovation in private financing for development.
The first is the Mobilizing Institutional Investors to Develop Africa’s Infrastructure initiative, or, MiDA, funded by USAID. MiDA harnesses the expertise and innovativeness of American private-sector financial institutions and helps them scale up their activities. MiDA helps address the significant gap in investment needed for Africa to achieve its sustainable development objectives. MiDA does this through a market-based approach, by leveraging U.S. institutional investors’ desire for success and diversification in faster-growing developing markets. Through delegations of pension-fund managers, pitch sessions, peer-to-peer events and transaction facilitation, the program has helped mobilize $1 billion in commitments to date from both U.S. and African institutional investors.
Secondly, by establishing a new U.S. International Development Finance Corporation, or DFC, the United States is expanding its capacity to mobilize and facilitate the participation of private sector capital in the economic development of emerging markets. Once operational, the DFC will retool and expand the U.S. government’s approach to development finance. It will more than double the financial exposure cap of the Overseas Private Investment Corporation’s (OPIC) existing portfolio, from $29 billion to $60 billion. And it will bring to bear new tools, such as the ability to make equity investments and perform feasibility studies, and increase integration with the State Department and USAID.
U.S. government support can catalyze significant amounts of private capital into emerging markets. This model of mobilizing private investment is critical to addressing the needs of the developing world, which are too great to meet with government resources alone.
Our model is to promote free enterprise and entrepreneurship that build self-reliance, rather than predatory lending or debt dependency. The DFC will advance private-sector-led development, resulting in projects that adhere to high standards and are financially viable over the long haul. The DFC will ensure contracts are transparent, financing is sustainable, economic and social impacts are properly assessed, and projects are able to help local economies in many ways.
For private sector partners, I hope you will approach us with projects that may qualify for support. And we welcome your feedback on how to maximize the effectiveness of this new entity. For our partner governments, I encourage you to make the U.S. government and – more importantly – our private sector aware of deals that might qualify for support, as well as assistance needed to improve the environment for bringing in more private investment. You can maximize the potential impact of tools such as the DFC through transparency in investment opportunities, fair bidding opportunities based on lifecycle costs, measures to fight corruption, and other steps to improve the business climate.
These game changing initiatives will mobilize investors, help emerging economies develop sustainably, and uphold important standards of transparency and accountability. Thank you.
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