Hearing of the Senate Foreign Relations Committee - Opening Statement of Sen. Corker, Hearing on Modernizing Development Finance

Hearing

"I thank all of our witnesses for being here today as we consider how the U.S. can modernize our development finance efforts.

"Our foreign assistance programs should set the goal of putting themselves out of business.

"We should promote economic growth and job creation that will enable developing countries to stand on their own and provide their citizens with opportunity and lead them out of poverty.

"At no net cost to taxpayers, development finance institutions can play an important role in facilitating lending to help local businesses in the developing world grow and attract foreign investors.

"But our current agencies are not equipped for the 21st century challenges and opportunities.

"The Overseas Private Investment Corporation, as we call it, uses public sector tools, such as loans, guarantees and insurance to provide private sector investment flows into the developing world where access to capital at market rates may not be accessible.

"However, as OPIC approaches 50, the corporation lacks the modern tools to fully engage the private sector in developing countries.

"To address those deficiencies, we have introduced the Better Utilization of Investments Leading to Development, or the BUILD Act. Our bipartisan legislation will reform and consolidate financing activities of OPIC and [the United States Agency for International Development].

"The administration and key stakeholders, including the ONE Campaign, the U.S. Global Leadership Coalition, and the U.S. Chamber of Commerce, have strongly embraced the goals and concept of our legislation and a companion bill introduced in the House.

"In a statement of support released last month, the White House said the BUILD Act is "broadly consistent' with President Trump's commitment at the Asia-Pacific Economic Cooperation forum last November that the U.S. is committed "to reforming its development finance institutions to better incentivize private sector investment in developing countries' as a "clear alternative to state-led financing initiatives that undermine state sovereignty'.

"The White House also warned that our development finance tools are "outdated', "fragmented' and "often…not well coordinated', hampering "our ability to achieve key U.S. foreign policy and national security objectives' while contributing to an "inefficient use of taxpayer dollars'.

"They also agree that reform will help the U.S. "compete more effectively' in a "new era of strategic competition'.

"Establishing a new development finance corporation provides the private sector an alternative to China's aggressive and potentially damaging lending through the Belt and Road Initiative and other finance efforts.

"China seeks to promote a state-led, centrally planned development model that benefits China first and foremost.

"While China's lending practices are opaque, estimates of Chinese current and planned lending, often to countries with high debt-to-GDP ratios, ranges from $100 billion into the trillions.

"The new U.S. International Development Finance Corporation (IDFC) created by our bill instead would advance responsible lending so citizens in recipient countries will be full participants in economic growth. With a modern development finance corporation, we could increase the effectiveness and reach of U.S. aid and strengthen market economies abroad.

"We could better promote private sector economic growth that creates middle-class consumers and industries.

"Not only would this growth help reduce our foreign aid budgets over time, it can lead to consumers abroad who can buy U.S. exports.

"Both the public sector and private sector interests can benefit from the growth of market economies in developing nations.

"It is in our national interest to encourage the opportunities that can result from this common interest in economic growth in the developing world.

"We thank our witness for being here. We thank him for his service to our nation.

"And with that, I will turn to my friend, our distinguished ranking member, Bob Menendez."

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