The Case Against the Overseas Private Investment Corporation
The Overseas Private Investment Corporation (OPIC) is a U.S. federal government agency with three key policy objectives:
- Stimulate economic development in developing countries;
- Make foreign policy gestures on behalf of the U.S. government; and
- Help U.S. businesses operating in other countries, particularly in the renewable energy sector.
OPIC pursues its mission by offering a variety of financial products including loan guarantees, direct loans, and political risk insurance. It also supports various investment funds.
The agency’s charter requires occasional reauthorization by Congress, without which it would be forced to close. The current version of its charter expires on September 30, 2015. Congress should allow OPIC’s charter to expire.
OPIC is institutionally ill-suited to its mission and harms poor people around the world. Its investments in developing countries are well-intentioned, but intentions are not results. That is because OPIC’s investment decisions are heavily politicized, which means that many OPIC-financed projects, rather than helping the least well-off, end up enriching the politically connected.