‘It’s The Perfect Counter To China’s Belt And Road Initiative’: Gabe Amo On DFC Reauthorization

13 hours ago

During a House Foreign Affairs Committee hearing prior to the congressional recess, Rep. Gabe Amo (D-RI) discussed his recommendation to reauthorize the U.S. International Development Finance Corporation.

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Transcript

00:00recognizes Mr. Amo. Thank you, Mr. Chairman. As others have mentioned, the

00:06Development Finance Corporation provides enormous return on investment for the

00:10American taxpayer. By working with the private sector to build development

00:15projects, whether it's strengthening mineral supply chains in Angola or

00:19expanding fish farms in Vietnam, the DFC advances the United States' foreign

00:24policy goals and our economic interests. The DFC opens up markets to American

00:31businesses, thereby reducing the reliance on foreign aid and shifting our

00:35relationship toward an equal playing field where American investment advances

00:39American diplomacy. In doing so, it's the perfect counter to China's Belt and Road

00:45Initiative, a coercive financing scheme that pressures countries into accepting

00:50unfavorable investment terms while forcing them to look the other way on

00:54China's human rights abuses. If we want government that is both efficient and

00:59effective, then Congress must reauthorize the DFC to extend and expand their track

01:05record of success. Thankfully, we already have a blueprint in hand, the bipartisan

01:11DFC Modernization and Reauthorization Act of 2024, which passed through our

01:16committee last Congress. This bill would make key reforms to strengthen American

01:21competitiveness while authorizing the DFC to continue its unique role for

01:27another seven years. And I use that word intentionally because the DFC does play,

01:30in fact, a unique role. First created in 2019, the DFC consolidated the various

01:37development finance tools from across the federal government, including USAID

01:41and the Overseas Private Investment Corporation, to better coordinate our

01:45development finance work. And while the DFC consults with USAID on projects

01:50related to foreign assistance, they serve separate and distinct roles. So that

01:55raises some alarm on the Trump administration's activity to openly

02:00float moving some of USAID's work into the DFC as they try to unlawfully shut

02:06down USAID. So Ms. Collinson, could you please explain how USAID and DFC's roles

02:13are different? How would shutting down USAID while folding some of its work

02:18into the DFC harm the DFC's core functions? Yeah, thank you, Congressman. I

02:24mean, as I mentioned before in my testimony, I think, you know, that one of

02:28the biggest deleterious effects of USAID's dismantling for DFC will just be

02:33not having sort of folks on the ground in missions who can help with deal

02:37origination in particular. Again, they helped set up this mission transaction

02:41unit that was really critical in that arena, but also as DFC is trying to do a

02:45much better job of monitoring and tracking their impact, then, you know,

02:49if there are not USAID staff there, they just have much less presence and DFC's

02:53presence overseas is quite limited. Thank you. And as we know, the DFC is also a

03:00key tool in the United States as the United States deploys our support to our

03:04ally Ukraine in their fight for survival against Russia's unlawful

03:10invasion. Last year, I led a bipartisan letter requesting that the DFC scale up

03:15their work in Ukraine to support the Ukrainian economy and business community.

03:19Ukraine's economy is vital to success in this war. A stronger Ukrainian economy

03:25benefits the war effort, supports Ukraine's capacity for reconstruction,

03:29and reduces future reliance on foreign aid. I'm glad, especially glad, that the

03:36DFC committed to providing over $400 million in additional political

03:44risk insurance for companies investing in Ukraine. Again, Ms. Collinson, how does

03:48the DFC political risk insurance for private sector investments in countries

03:53like Ukraine support those countries' economies and encourage American

03:58companies to invest? Yeah, maybe I'll start by just noting that the political

04:03risk insurance tool that DFC had is actually a pretty unique one. There's

04:06sort of a few other actors that have a comparable tool, multilateral investment

04:10guarantee agency being one of them, but it's really been shown to be catalytic

04:14and fragile in conflict-affected states in particular. And you could imagine just,

04:18you know, being able to offer and take on at least, you know, assume a part of that

04:23non-commercial project risk in a setting like Ukraine has really been a vital, a

04:29vital way to just grow private investors' confidence in the economy and lend both

04:35to the economy now, but also Ukraine's recovery and reconstruction down the road.

04:39Thank you. With that, I yield back the rest of my time.

‘It’s The Perfect Counter To China’s Belt And Road Initiative’: Gabe Amo On DFC Reauthorization

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