1971 TO 2019 48 years of Investing in Emerging Economies Developing Stable Societies Transforming Lives and looking forward to the new U.S. International Development Finance Corporation 48 YEARS OF MOBILIZING INVESTMENT | 1 1970s Men and women everywhere can be grateful that OPIC is providing important services toward the social and economic progress of the developing nations. — President Richard Nixon A vital element of our foreign policy is our relationship with the developing countries in Africa, Asia and Latin America. — President Gerald Ford 1990s One of the greatest challenges before us as a nation, OPIC is a government corporation run as a sound and therefore one of our greatest opportunities, is to business... At OPIC, we call this investing in freedom. participate in molding a global economic system which — OPIC President and CEO Fred Zeder will bring greater prosperity to all the people of all countries. — President Jimmy Carter As OPIC expands into new markets and countries, it is at the crest of a new wave of American assistance, bringing growth, business know-how and prosperity to the developing world. — President George H. W. Bush 1980s OPIC has harnessed the resources of American businesses to build hope and opportunity through The greatest contribution this nation can make to investment and commerce in countries around the developing countries is through increased investment world. in their developing markets. OPIC fulfills an important responsibility by encouraging greater involvement — President Bill Clinton of American business in developing countries, in the process helping our own economy to expand as well. World events of the past quarter century have revealed — President Ronald Reagan that OPIC was ahead of its time. Now there is a widespread consensus that the private sector is the best engine for fueling economic growth. — OPIC President Ruth Harkin 2 | THE HISTORY OF OPIC 2000s Development assistance should light a path to reform and economic growth rather than perpetuate the need for further aid. — President George W. Bush In every region of the world, we see new examples of the catalytic role that investment and economic development plays in improving the quality of life for people, encouraging the growth of democratic institutions and the rule of law, and in fostering political 2019 stability. For almost 50 years, OPIC has been committed to — OPIC President Robert Mosbacher advancing American values around the world. As Thomas Jefferson said, ‘I like the dreams of the future better than the history of the past.’ We cannot imagine the infinite opportunities of the next 50 years. While the world changes, our mission will 2010s remain helping people to improve their lives, exercise their liberties, and enjoy an ever expanding array of The next chapter of development cannot just pursuits of happiness. be about what governments spend, it has to harness the unprecedented resources of our I am confident DFC will advance global peace and interconnected world. prosperity for generations. — President Barack Obama — Acting OPIC President and CEO David Bohigian With each passing year, OPIC becomes more responsive, more effective, and more necessary to America’s role and leadership abroad. — OPIC President and CEO Elizabeth L. Littlefield We are committed to reforming our development finance institutions so that they better incentivize private sector investment in emerging economies. — President Donald J. Trump The United States is entering a new era in development finance. —OPIC President and CEO Ray W. Washburne 48 YEARS OF MOBILIZING INVESTMENT | 3 I am a strong believer in the importance of private investment to the development process. It is the most effective way of transferring the financial resources, technology and management skills which play so vital a role in stimulating development in poorer nations. – President Richard Nixon, 1972 4 | THE HISTORY OF OPIC Beginnings: A Modern Day Marshall Plan When the United States committed to rebuilding Europe after World War II, it recognized that private investment would be essential to address this massive need. The Marshall Plan authorized the U.S. Government to insure private U.S. investors against the risk that their earnings generated overseas in foreign currencies might not be convertible into U.S. dollars. This powerful new tool was political risk insurance and it became the first financial tool the U.S. offered to support investors in emerging markets. Congress created OPIC in 1969 through an amendment to the Foreign Assistance Act and two years later, in 1971, the agency began operations with a portfolio of $8.4 billion in political risk insurance and $169 million in loan guaranties. During the first year in operation, OPIC provided political risk insurance to projects in 39 countries, including a petrochemical plant in South Korea, a food processing facility Left and above: Empowering local communities in the Dominican Republic, and a flavor and — An early OPIC project introduced a fragrance manufacturer in Indonesia. Community Credit Guaranty Program to support small businesses and community projects. Although insurance was OPIC’s core product The program enabled the small town of San for years, the agency also began providing Matias in Guatemala to obtain a loan to build investment guaranties to projects such as a a downhill gravity flow system to access clean fertilizer manufacturer in Brazil, a copper mine drinking water. The loan was repaid through in Indonesia, and other projects to improve a monthly subscription by 154 families in San the quality of life for people in developing Matias. countries. 48 YEARS OF MOBILIZING INVESTMENT | 5 A New Strategy for Addressing Major World Challenges At a time when money flowing into developing economies was mostly in the form of aid, OPIC’s model of mobilizing private investment channeled more resources toward some of the world’s most urgent challenges. Many early OPIC projects were in the agriculture sector and focused on not only producing more food, but on building value chains to help food produced reach more people and larger markets. OPIC support helped a shrimp operation in Cameroon establish a system of freezing and packaging for export as far away as Japan. Other projects brought more refrigeration to Ghana, improved the quality of beef produced in Kenya, and helped expand dairy production in Thailand. Meanwhile, support for the construction of fertilizer plants in India and Latin America helped increase food production for a global population. Right: An OPIC-supported fertilizer plant in India. 6 | THE HISTORY OF OPIC Above: An OPIC-supported dairy processing facility in Thailand made milk, cheese and ice cream more widely available. The developing countries must look increasingly to private investment for the capital resources they need for growth. – Secretary of State Henry Kissinger Above: An OPIC-supported flour mill in Nigeria. 48 YEARS OF MOBILIZING INVESTMENT | 7 Were it not for the availability of OPIC programs, we would not be involved in five developing nations. – Early OPIC client investing in Africa and Latin America 8 | THE HISTORY OF OPIC Advancing American Competitiveness With more than two-thirds of the world’s population living in developing countries, these markets held growing interest to American businesses. Demand for OPIC services was strong from the beginning and helped businesses operate in places that would have otherwise been inaccessible. In the late 1970s, OPIC began domestic outreach to educate small American businesses about the opportunities in emerging markets. This focus would remain a priority throughout the agency’s history and would result in small businesses eventually accounting for more than half of all the projects OPIC supported. In response to strong demand, OPIC gradually increased the amount of financing and political risk insurance it offered. In addition to helping American businesses gain entry into many rapidly-growing emerging markets, OPIC projects also supported the U.S. economy. In 1999, a single OPIC-supported power plant in Indonesia led to the procurement of $1 billion in U.S. goods and services and The major U.S. businesses OPIC supported supported 3,000 U.S. jobs. included a Colgate-Palmolive manufacturing plant in Egypt, a Ford Motor Co. plant in India, a Mack Truck distributorship in Honduras, and a flour mill in Liberia. 48 YEARS OF MOBILIZING INVESTMENT | 9 A Commitment to Fiscal Responsibility OPIC was established as a self-sustaining agency that would operate at no cost to American taxpayers. Skeptics challenged the idea that the U.S. could generate returns by investing in some of the world’s poorest countries, but during OPIC’s first year in operation, the agency reported a net income of more than $25 million. Years later, in 1983, OPIC strengthened its commitment to fiscal responsibility when it presented President Ronald Reagan with a $56 million check, fulfilling its promise to pay back the funds that Congress had You’ve proved it is possible to allocated to start the agency in 1971. introduce efficiencies and put Because OPIC maintained a small staff government on a business-like and an efficient operation, its profit per basis...you’ve set a trend that all employee exceeded $1 million by 1990. should follow. The money generated contributed to – President Ronald Reagan U.S. deficit reduction. Total amount generated for deficit reduction since 1971: Record net income in 1982 enabled OPIC to $8.7 billion return $56 million to the U.S. Treasury. 10 | THE HISTORY OF OPIC 48 YEARS OF MOBILIZING INVESTMENT | 11 12 | THE HISTORY OF OPIC Transforming Lives By focusing on solutions to some of the world’s most urgent challenges, OPIC helped transform lives around the world. Support for Small Farmers By helping the world’s smallest farmers access equipment and training, OPIC enabled them to increase their yields. Critical Infrastructure OPIC supported construction of roads, hospitals, power plants, ports, airports, and other critical infrastructure projects.