U.S. Rep. Francis Rooney, R-Fla., the vice chairman of the U.S. House Foreign Affairs Committee, has thrown his support to a proposal from a fellow Florida Republican which reforms how the federal government manages international development finances.
Rooney announced on Friday he was backing U.S. Rep. Ted Yoho’s, R-Fla., “Better Utilization of Investments Leading to Development (BUILD) Act." Yoho’s bill streamlines a host of federal programs into a single development finance corporation. The Trump administration made a similar proposal in its FY 2019 budget request.
“As a former United States ambassador to the Holy See, I understand the important role soft power diplomacy, including our foreign assistance programs, plays in resolving problems and advancing United States’ strategic interests around the world,” Rooney said. “It is imperative that our foreign aid be efficient and rigorously aligned with our priorities.
“Accordingly, I am co-sponsoring the BUILD Act, which will modify our foreign aid programs to ensure better use of funds, eliminate duplicative efforts, and increase our leverage of the private sector. These reforms will generate economic development, and promote stability and security abroad,” Rooney added. “This week I chaired a meeting between USAID Director Mark Green and members of the House Foreign Affairs Committee where we discussed various opportunities and challenges facing our foreign assistance programs at present. The BUILD Act received a warm reception and I look forward to working with my colleagues on the committee to implement these concepts.”
Yoho, the chairman of the U.S. House Asia and Pacific Subcommittee and the vice chairman of the Foreign Affairs Committee before Rooney took over, brought out the proposal at the end of last month.
“U.S. foreign aid and development money, when properly implemented, are strong tools of diplomacy,” Yoho said when he introduced it. “When used effectively, these funds help improve our diplomatic, economic, and national security interests around the globe. Today’s introduction of the bipartisan BUILD Act will reform and modernize America’s approach to development finance making it more efficient and effective.
“Right now we have multiple federal agencies distributing foreign aid around the globe. The BUILD Act will consolidate various federal development programs and agencies into one full-service, self-sustaining U.S. International Development Finance Corporation (IDFC). By streamlining our current system, we will not only spark economic growth in developing countries; we will improve America’s global competitiveness,” Yoho continued.
“Taking countries from aid to trade is the end goal,” Yoho added. “We want to help countries become robust trading partners with the United States. By doing so, we will be helping create stable, self-sufficient societies around the world and open new markets for U.S. goods and services. There is truth to the saying a rising tide lifts all boats. The BUILD Act will help make this a reality.”
Yoho has reeled in U.S. Rep. Adam Smith, D-Wash., as a cosponsor. The bill was sent to the House Foreign Affairs Committee.
Over in the Senate, Foreign Relations Committee Chairman Bob Corker, R-Tenn., and U.S. Sen. Chris Coons, D-Del., introduced a similar proposal. Corker’s office insisted the new development finance corporation “will leverage the U.S. private sector’s expertise and investment capital to generate economic growth in the developing world that will support American interests.”
“Taking a free-market approach to development finance will provide more accountability for taxpayers at no expected cost, create new opportunities for U.S. businesses to invest overseas, and expand American influence around the world,” said Corker. “The president embraced this concept in his budget because sustainable growth in the developing world promotes U.S. interests in security and stability while expanding markets for American companies. I am proud to join Senator Coons in this effort and look forward to working with my colleagues to make it a reality.”
“The bipartisan BUILD Act will create a 21st century development finance institution with the full suite of tools to attract private sector investment to low income countries,” said Coons. “This new institution will make targeted investments to reduce poverty in countries that are critical to our national security. I look forward to working with my cosponsors to pass a strong bill that helps make markets work throughout the developing world.”
The proposed U.S. International Development Finance Corporation (IDFC) will take over efforts currently scattered in a host of federal offices including the Overseas Private Investment Corporation (OPIC), USAID’s Development Credit Authority, USAID’s Enterprise Funds and USAID’s Office of Private Capital and Microenterprise.
“The IDFC will operate in low and lower middle-income countries where it furthers the U.S. national security and economic interests and where the project can be shown to have a demonstrable development outcome. Congress will maintain oversight of the IDFC by reviewing the agency’s public reports on its development impact and through independent audits and the establishment of an inspector general in the corporation,” Corker’s office noted. “The IDFC will have the authority to: issue direct loans, including local currency loans; issue guaranties, including local currency guaranties; provide political risk insurance; fund first losses; participate in equity investments; provide technical assistance; make limited grants to unlock larger investments; and attract private sector talent.”
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