The US’ Global Development Daydreams
Years after its formation and member appointments, the US Global Development Council established as an outside advisory body to the State and Treasury Departments and specialist agencies held its inaugural meeting and presented a broad outline of conceptual and detailed work priorities. The document appeared as numerous think tanks convened events and research around the UN’s post-2015 poor country agenda to be debated among heads of state later this year with input from civil society and business interests. The Secretary-General envisions extreme poverty eradication by 2030 with a large private sector role, as a recent Brookings paper notes that one-third of low-income economy external funding is from these sources, and that both profit and sustainability criteria increasingly guide company investment and operations. For natural resources the Extractive Industries Initiative offers a model for voluntary reporting of revenue and contract terms, and it can generate spinoff small business supplier and local community education and health relationships. The blueprints urge better use of bilateral and multilateral risk-mitigation tools with debt-equity hybrids and guarantees as many providers lack capacity and the culture to act as “one-stop shops” for commercial deals. Early stage patient capital in the $20 million range is a particular gap, with different decision and measurement norms on both sides. OPIC’s inability to take equity for its own account although it participates with venture capital firms is routinely cited as an obstacle, and both the President’s panel and activist groups urged removal of the restriction as well as possible merger into an umbrella Development Finance Institution alongside AID, Ex-Im Bank and other efforts. The Brookings report acknowledges such consolidation may be too ambitious and that alignment of personnel and procedures may be more realistic as Congress could reprogram $50 million for share stakes and technical assistance. President Obama could host a major conference to consider these steps as the second quadrennial diplomatic and development strategy is charted at the State Department. The original approach under Secretary Clinton championed “economic statecraft” promoting trade and investment with aid, but multinational giants were often favored over average competitors and credit outside micro-finance was overlooked. Secretary Kerry is due to appoint his own chief economist soon to facilitate deliberations, as Treasury rebuilds its international affairs wing following the departure of senior officials.
The Office of Foreign Assets Control remains busy with sanctions now extended to Russia in addition to enforcing longstanding ones as in a recent action against Zimbabwe. The stock market there has tumbled on a 30 percent consumer sales drop, as President Mugabe threatens to reintroduce the local dollar resuscitating the specter of hyperinflation. However his administration has retreated from possible confiscation to comply with the 51 percent indigenization law as elections in next-door South Africa may cut the vital remittance and employment lifeline as the ANC to preserve power has campaigned on harsher immigrant and security visions.
