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Supporting job creation and economic growth in Asia-Pacific: A conversation with OPIC’s Geoffrey Tan

Geoff Tan

While the vast majority of OPIC’s staff is based in Washington, the Agency has in recent years established a handful of small local offices to support business development in key regions. Geoffrey Tan, OPIC Managing Director for Asia-Pacific, relocated last year to Bangkok, where he heads outreach and business development across a long list of countries in the region. Here he describes the opportunities for American investors in Asia-Pacific, and some of the development OPIC is helping support.

 

 In 2012, President Obama adopted a pivot – or rebalance – to Asia strategy to broaden and deepen U.S. ties to the region. How is OPIC supporting that initiative? 

OPIC plays an important role in U.S. efforts to expand trade with and invest in Asia, and facilitate U.S. private sector participation in those opportunities. We currently support major infrastructure investments such as power generation, but also provide financing to support local small businesses and entrepreneurs, which are key to local job creation and economic growth.

 

OPIC is a small agency with a staff based almost exclusively in Washington. How does having a local presence in Thailand help support OPIC’s efforts in the region?

 

Establishing a Bangkok office has helped underscore OPIC’s commitment to the Asia-Pacific region. We have been able to initiate dialogues with individuals, companies and governments that would not have been possible operating out of Washington. Since opening the office in July 2014, OPIC has committed more than $400 million of support to investments in the region, which is significant in a challenging investment environment.

 

You are a one-person office covering a huge region. How do you spend your time?

 

I travel frequently: often two to three times a month. Establishing OPIC’s name in the region requires being on the ground in each country, speaking and networking at industry conferences as well as reaching out to the American business community. While those activities will continue, I am now shifting to more focused events such as sector specific workshops and more in-depth meetings to explore individual opportunities. A fair amount of my time is also spent liaising and coordinating with relevant U.S. Government colleagues throughout the region.

 

What are some of the major development challenges you’re seeing in Asia?

 

It’s a huge region: Asia Pacific alone has countries at many different stages of economic development, from the relatively advanced emerging economies of Malaysia and Thailand to the many economies that are less developed. When combined with each country’s unique political context and a rapidly changing global economic and political environment, it gets complicated. But there are some consistent themes to the region’s development challenges, a major one being associated with host country policies. Currently the financial markets are very liquid, with equity investors and financial institutions ready to invest and to lend. But the lack of international standard “bankable” investments – the facilitating legal and regulatory environments necessary to create them – presents a key constraint. Most countries are moving in the right direction but doing so slowly, not necessarily consistently, and in their own way. That said, OPIC is at home in this type of operating environment, and we help mitigate these risks in investments we support.

 

Describe the level of American investor interest in the region and what are some of the opportunities for these investors?

 

American investor interest in the region is strong, but relatively speaking lower than that of investors from Europe or those within Asia. That’s unfortunate because the opportunities are tremendous for those with the commitment and capacity to develop and execute. There’s a tremendous need for investment in power, water, logistics, telecommunications and transportation infrastructure required to provide basic services to a growing population and support economic growth. There’s also increasing demand for financial services and quality education, housing and health care by a growing middle class. Many countries in Asia are also seeking foreign direct investment for manufacturing facilities and other investments to help move their economies up the value chain, and would welcome U.S. technology and world class products and processes.

OPIC Managing Director of Micro and SME Finance Loren Rodwin, left, visits the home of a Cambodian grocery store owner who used a $3,000 home improvement loan from Thaneakea Phum to expand her house and business in the traditional Khmer architectural style.
OPIC Managing Director of Micro and SME Finance Loren Rodwin, left, visits the home of a Cambodian grocery store owner who used a $3,000 home improvement loan from Thaneakea Phum to expand her house and business in the traditional Khmer architectural style.

 

Can you talk about any one specific project that OPIC is supporting and how OPIC’s participation is making a difference?

 

OPIC’s $5 million loan to Thaneakea Phum, a Cambodian microfinance institution, is helping as many as 5,000 borrowers access home improvement loans and individual loans that otherwise would be unaffordable. Because OPIC provided a loan with a long, seven-year tenor, TPC has been able to extend the terms of its microfinance loans and reduce the amount of each repayment. These loans are improving the lives of homeowners and small business owners, many of them women, in predominantly rural and agricultural areas who otherwise would not have access to financing.

 

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