June 28, 2018 (WASHINGTON) – This statement is delivered on behalf of the Modernizing Foreign Assistance Network (MFAN) by Co-Chairs George Ingram, Tessie San Martin, and Connie Veillette.
The Modernizing Foreign Assistance Network is encouraged by the revisions and passage in the Senate Foreign Relations Committee this week of the bipartisan Better Utilization of Investments Leading to Development Act of 2018, or BUILD Act (S. 2463). This follows approval of the BUILD Act in the House Foreign Affairs Committee last month (H.R. 5105). The BUILD Act would expand U.S. development finance capabilities by establishing a new Development Finance Corporation (DFC). The amended version of BUILD includes improvements that align with MFAN’s recommendations for the legislation.
MFAN has championed U.S. development finance reform, noting that private investment is key to unlocking development progress, and that joining assistance resources with private finance can expand the universe that advances inclusive economic development. The White House Office of Management and Budget referenced MFAN’s leadership in a recent proposal, echoing the importance of consolidating and leveraging development finance tools.
MFAN has recommended improving the bill in the following ways: prioritizing development objectives consistently; strengthening linkages with USAID, the U.S. Government’s lead development agency; ensuring greater consultation and transparency; establishing and prioritizing evaluation and learning systems; and protecting environmental and labor standards. The amended bill includes a number of positive changes reflecting these priorities, including:
- Ensuring Development Leadership and Expertise at the DFC. The amended bill includes the requirement that the appointment of the DFC’s Chief Development Officer (CDO) be made in consultation with the USAID Administrator and expands the CDO’s role, including the responsibility to coordinate agreed upon transfers of resources between the agencies. It also establishes a Development Advisory Council of experts to provide direction as to the Corporation’s development agenda. The changes also expand the definition of “relevant experience” for private sector board members to include those with labor, environment and development expertise. This reflects MFAN’s call for development experience within the DFC.
- Maintaining USAID’s Office of Private Capital and Microenterprise. Any transfer would need to be done with the concurrence of the USAID Administrator, which ensures that moving DCA and enterprise funds to the new DFC would not weaken USAID and the U.S. Government’s ability to drive a coherent inclusive economic growth and reform agenda and to support small and local investments.
- Publishing Project-Level Data. This change ensures that the DFC will be making information on each project public, thereby ensuring consistency with the 2016 Foreign Aid Transparency and Accountability Act (FATAA) and facilitating reporting to the International Aid Transparency Initiative. An additional amendment, originally sponsored by Rep. Gerry Connolly (D-VA), requires that the new DFC be covered under FATAA, a critical provision in furthering transparency and evaluation.
- Increasing Transparency and Public Engagement with the Board of Directors. This modification is consistent with MFAN’s recommendation of greater consultation and transparency of DFC policies, activities, and results.
MFAN is pleased to see these and other key changes and wishes to thank the bipartisan leadership of the Senate Foreign Relations Committee, Chairman Bob Corker (R-TN) and Ranking Member Bob Menendez (D-NJ), as well as the House Foreign Affairs Committee, Chairman Ed Royce (R-CA) and Ranking Member Eliot Engel (D-NY). Additional thanks go to the bill sponsors – Senators Bob Corker (R-TN) and Chris Coons (D-DE) and Representatives Ted Yoho (R-FL) and Adam Smith (D-WA) – for their continuing efforts to maximize our development impact. MFAN urges the full House and Senate to consider the strengthened BUILD Act as soon as possible.