By Judith Pryor
Vice President, OPIC Office of External Affairs
In 2010, President Obama unveiled the National Export Initiative to remove trade barriers abroad and help American business compete globally. With about 95 percent of the world’s consumers living outside U.S. borders, it’s hard to overstate the importance of this initiative and I’m happy to say it has been a success. In 2012 U.S. exports reached a record $2.2 trillion and exports accounted for 13.9 percent of GDP, tying the record set in 2011. These exports support more than 11 million U.S. jobs.
May is World Trade Month, an occasion for the Obama Administration to mark its progress and unveil a new initiative aimed at helping small and medium businesses export more.
How does the Overseas Private Investment Corporation support these efforts? As head of the external affairs team at this small U.S. government agency, I’m asked that question a lot. The short answer is that while much of OPIC’s work helping businesses invest in the developing world indirectly supports trade, OPIC is not a trade agency.
Confused? You’re not the only one. That’s why one of the first projects Elizabeth L. Littlefield’s leadership team took on four years ago was a messaging exercise. We developed the following language, which was the shortest way we could find to describe work we do and the broad impact it has:
OPIC is the U.S. Government’s development finance institution. It mobilizes private capital to help solve critical development challenges and in doing so, advances U.S. foreign policy. Because OPIC works with the U.S. private sector, it helps U.S. businesses gain footholds in emerging markets, catalyzing revenues, jobs and growth opportunities both at home and abroad. OPIC achieves its mission by providing investors with financing, guarantees, political risk insurance, and support for private equity investment funds.
OPIC is, first and foremost a development agency working to address critical development challenges such as poverty, food insecurity and a host of other problems from insufficient electricity to a lack of financial institutions and modern infrastructure. While these challenges impair the quality of life and limit opportunity for people throughout the developing world, they also prevent developing countries from becoming players in the global economy.
You can’t reasonably expect a country to buy American goods and services until it has a relatively stable economy of its own. Over the years OPIC has helped American businesses build power plants, low- and middle-income housing, water filtration systems and other infrastructure, often in many countries that went on to become U.S. trading partners. Yet, while this is one of the many reasons our work is so important, it is not our primary mission, of mobilizing private capital to address major development challenges around the world.
While OPIC is not a trade agency like the Export-Import Bank of the United States, that provides direct support for U.S. exports, the development work we support often leads to procurement of U.S. goods and services and benefits the U.S economy. What happens over there matters over here.
Consider one of our longstanding clients, Ellicott Dredges LLC of Baltimore, which has sold its American-made dredging equipment to markets around the world for more than 100 years. OPIC supports the sale of this American-made equipment to more challenging markets such as Iraq by providing political risk insurance. And those overseas sales support jobs at Ellicott’s manufacturing facilities in Maryland and Wisconsin.
In the almost four years that I’ve spent at OPIC, I’ve repeatedly been astonished by how such a small agency … we have fewer than 230 employees … can accomplish so much. We’ve supported construction of renewable power plants from Sub-Saharan Africa to South America, a major hospital project in Asia, helped bring clean drinking water to regions from Algeria to Jordan, advanced microfinance lending all around the world and much much more. These successes are due in part to the fact that we have a specific, clearly defined mission. And that’s why I am always careful to respond “not quite,” when people say to me, “OPIC. Aren’t you guys like Ex-Im Bank?”
I’m delighted that President Obama’s National Trade Initiative has helped so many businesses access new markets for their goods and that the U.S. government has so many resources to promote trade. Trade and development are both critical tools for engaging with the rest of the world. And while OPIC’s main focus will always be development, we fully support increased trade. You can read more about World Trade Month here.