CGD Policy Blogs
Last week, a high-powered group of investors, foundations, and academics called for the establishment of a US Development Finance Bank – which would combine existing programs at the Overseas Private Investment Corporation (OPIC), USAID, the US Trade and Development Agency, and the Treasury Department.
Within the last two weeks, top American and Chinese officials completed major trips to Sub-Saharan Africa. In classic Chinese style, Premier Li signed a laundry list of commercial deals and bilateral agreements across four countries.
The Rethinking US Development Policy team has launched a new tool: “US Development Initiatives: Where in The World Are They?” This allows users to geographically explore US development policy efforts as well as the quantity of aid commitments, and the magnitude of trade and investment.
Following its recent 90 percent GDP adjustment, Nigeria is now a solidly middle-income country. With an income per capita of $2,700, it now stands alongside countries like the Philippines and Morocco. Not exactly a rich country per se, but with a GDP of roughly $500 billion, it’s far from an impoverished one in terms of national resources. With donors providing $2 billion a year in aid to Nigeria, this raises the natural question: If Nigeria is significantly wealthier than previously thought, then should we still be providing large-scale assistance there?
Trade policy is one of America’s most potent development tools, particularly for the world’s poorest countries. The big question has always been how best to use it. Should the US give away duty-free access to its $17 trillion market? Essentially opening the door to anyone in the hopes of benefitting as many people as possible.
Over at the Council on Foreign Relations website, Michael Levi posted a reply to our recent paper on estimating the tradeoffs between OPIC power generation investments based upon natural gas and renewable sources. We are grateful to Michael for his thoughtful comments and for instigating a sensible discussion of the underlying issues.
This is shaping up to be a big year for US trade policy. Most eyes are on potential deals with the Pacific Rim and Europe (and reeling from Senator Reid’s latest blow to their prospects). Those of us concerned with trade as a driver for development should also be watching Congress’ and the Obama Administration’s review of the African Growth and Opportunity Act (AGOA).
Of the many outcomes in the FY2014 Omnibus Appropriations legislation, one that stood out was buried in section 7081. This provision now allows the Overseas Private Investment Corporation (OPIC) to invest in fossil fuel power projects in IDA and IDA-blend countries. In other words, OPIC’s carbon cap has been lifted at least until the end of September.