Conversation in Public Policy: Trade, Finance & Development
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Conversation in Public Policy: Trade, Finance & Development


– Howdy. – [Audience] Howdy. – I love it, I love it! I’m Frank Ashley, the Senior Associate Dean here at the Bush School of
Government and Public Service. And on behalf of Mark Welsh, our Dean, I’d like to welcome everyone to the Mosbacher Institute Conversation in Public Policy, Trade,
Finance and Development; a new role for the United States. You know, last night I was thinking, and if you ask my wife,
she’d say that scary. But, you know, in the 30 plus years that I’ve been here at
A&M, and at the A&M system, I’m currently in my eighth position. Eighth position. That’s not because I couldn’t keep a job. (audience laughing) But to be honest with you, my current position as
Senior Associate Dean, is the best one that I’ve ever had. And let me tell you why I say that. I say that, first of all, because of the faculty and
staff that I have to work with, here at the Bush School. Secondly, because of
the incredible students that I interact with every
day here at the Bush School. But thirdly, because of the great events like this one tonight, that I have the honor and
the privilege to attend. But I guess the biggest thing is my part in helping fulfill President Bush’s legacy, and his dream, his vision. President Bush stated that, “In 100 years, I hope the Bush
School family and historians “can look back and say
that from our school, “came generations of
people who are committed “to public service for the right reasons. “I hope it will be said
that our students believe “that they can make a difference. “And they did.” That’s why the faculty,
the staff, and students come to the Bush school every day to help fulfill that vision. Now there are a few
people here in attendance that I’d like to recognize who all also work with us to help
us fulfill this vision. First of all, we have members of the Bush School advisory board here. Bookman and Florence Peters,
Chuck and Teddy Ellison. Would you raise your hands please? (audience clapping) Secondly, we have the Director of the George and Barbara Bush Foundation, David Jones, David. (audience clapping) I hope everyone understands that the foundation is a big partner in everything that we do
here at the Bush School. And David, we thank
you for your leadership and the things the foundation does for us. We really appreciate that. And last but not least,
we have the Director of the George Bush Presidential
Library and Museum, Warren Finch and his wife, Mary. (audience clapping) We really have a unique
situation here at Texas A&M, because the Bush School,
the Bush Foundation, and the Bush Library, operate as a team. That’s not typical at other
universities at other sites. And we work as a team to preserve the legacy of George HW Bush. And it’s a team that I’m
very proud to be a member of. So really, as a team, the three of us really welcome you to tonight’s event. And now I’d like to invite
Dr. Raymond Robertson, the Director of the Mosbacher
Institute, to the stage. Raymond. (audience clapping) – Howdy. – [Audience] Howdy. – I’d like to thank you all so
much for joining us tonight. Just a couple of weeks ago, we had the pleasure of having congressional representative
Will Hurd here. And he spoke a lot about
his Aggie experience. And he also in his remarks, talked about the importance
of international development and specifically mentioned the Overseas Private
Investment Corporation. And I was really excited to hear that because we’d already
been planning this night quite some months before then. So it was a great advance
plug for this event. We’re really, really excited and honored to have here tonight what I consider to be not only two great Americans, but also people who are leading the way for presenting America’s
image throughout the world in a way that lifts people up. And I’m really excited about the conversation that
they’re going to have. The first one, of course,
is Rob Mosbacher Junior, who is the Chairman of the
Mosbacher Energy Company and obviously he doesn’t need much of an introduction for y’all, and it’s full introductions
in the program, but I like to highlight a couple things, including that he was President and CEO of MEC, from 1986 to 2005, and also he’s the Vice Chairman of the Mosbacher Power Group, an independent electric power developer, beginning in ’95, and sold in 2003. But of course, most relevant tonight, was that he was sworn in as the ninth President and
Chief Executive Officer of the Overseas Private
Investment Corporation; and was in that position
from 2005 to 2009. He’s been a tremendous
friend of the Bush School and the Mosbacher Institute, of course, and we’re very excited to
have him here with us tonight. Thank you very much for joining us. (audience clapping) I’m also extremely excited and proud to be able to introduce to you today, David Bohigian, who’s the
Acting Chief Executive Officer of the US International
Development Finance Corporation. Previously, Mr. Bohigian served as Acting President and
Chief Executive Officer of the OPIC, the Overseas
Private Investment Corporation. And led its transformation
to the current DFC, under the BUILD Act, which I’m
sure he’ll be talking about. He also led efforts to
catalyze investment, impact investment in particular, to really support women’s empowerment and raise standards for
foreign direct investment. He joined the OPIC in August 2017, after having been appointed
by President Trump, confirmed by the Senate, and to serve as the
Executive Vice President. We’re very excited and honored
to have you with us tonight. Thank you very much for joining us. And I’d like to invite
you now both to the stage. (audience clapping) Thank you very much. – Okay, let’s see this works. Howdy. – [Audience] Howdy. I thought so, I thought it worked. (laughing) – Thank you. Well, great to be here. Thank you all very much
for your attendance. Let me first thank Frank
for setting the stage and Raymond for your introduction and your great support here. And I want to thank Dave. David, I call Dave. But I wanna thank Dave for joining us and for participating in this. And for the job that he’s done at the Overseas Private
Investment Corporation. So let me try to tee this up for you. When we think of foreign
policy in the United States, we typically think of three buckets. Defense, diplomacy, and development. And there are some of us who believe that we have not historically put as much emphasis on
development, as we should, and that, frankly, if we are going to lead with something that perhaps is the greatest competitive
comparative advantage we have, as Americans, it would be to project
entrepreneurial capitalism, and how you can build inclusive,
sustainable economies, that are built around strong,
healthy middle classes, that are made up of private sector folks. But let me touch on a
couple of other tools. And then I’m going to
turn to Dave and ask him to really explain to you what the third tool is that he helps run and I was privileged to
be part of years ago. So when we think of these tools, I’d start by saying international trade is one of the most important,
the most dynamic and, frankly, in many ways, the most sustainable
way of growing economies. And I wanna take a personal note to say when President Bush announced
in November of 2009, at a dinner in Houston, I’ll never forget, that he wanted to create a
Mosbacher Institute on trade. My dad having been very involved in the North American Free Trade Agreement was very committed as
Secretary of Commerce, to not only expanding trade but also expanding economic opportunities for American businesses. To compete abroad, to help not only support the economic growth of
countries around the world, but also to create new customers for American goods and services. So I’m absolutely thrilled that we have you here Raymond, as Head of the Mosbacher Institute, to put the kind of emphasis on trade and the kind of direction and guidance that I think you’re bringing. So I’m absolutely thrilled
that you’re doing that. And I know my dad would be deeply, deeply appreciative of what you’re doing. So trade is one of the tools. And you all spend a lot of time, I think entertaining
conversations about that. We’re not going to focus
so much on that tonight. Second, is what you
know in Washington speak is official development assistance, ODA. Translation, foreign aid. You know, many think of
foreign aid in negative terms. Some think of it positively. I would just say a couple of things about foreign assistance as a tool. One, a great, a high percentage, of what we spend on foreign assistance, which incidentally, is
1% of the federal budget. Not 10, not 15, not 25; 1%. That foreign assistance, large part of it spent
on reducing suffering. On crisis suffering reduction, disease, hunger, and the like. And as it relates to economic development, foreign assistance can be used to help facilitate investments, that, frankly, otherwise
would make economic sense. Let me give you one small example. I was in the power development
business for a while, and mostly in developing countries, emerging market countries. You know, you can construct a power plant in a foreign country that
will make economic sense if it’s structured properly. But then there’s a question of how do you take that electricity from that plant to the customers? You need transmission lines, you need wires, as we say. You need a grid. Well, it’s really hard to make money on building a grid in
most of these countries. Because price of electricity
is so low, it’s so cheap, that there’s not a whole
lot of margin in there to pay for the cost of
building transmission lines. That’s where American foreign assistance can actually come in to help facilitate investment in things
like power generation. So it has a role to play. And it’s something that we
should never lose sight of. Now the third category, and the one that I think
is frankly, in many cases, the least well understood, is what we call development finance. And development finance is what Dave is in the business of doing. He heads the development finance
agency for our government. Anyway, that’s what really we’re going to talk about tonight. So I wanna turn to him and ask you, please, if you would
explain to our friends here, what development finance is all about? How is it used to stimulate investment in countries around the world, particularly middle and
lower income countries? And finally, how does it
support American foreign policy? – Absolutely. First, thank you all for being here. And Frank and Raymond,
thank you for all you do. And on a personal note, it’s extraordinary
special for me to be here because, as many students
here looking for internships, my first internship was
with President Bush in 1991, where I worked in presidential personnel. So I feel like I’m coming
a little bit full circle here tonight to be here. And especially with you, Rob, who inspired me when I
got to watch you work at the Overseas Private
Investment Corporation and really been the honor of my life to be able to run that. As I was walking through
the library this afternoon, President Bush had a quote to say, “To serve and to serve well,
there’s no greater honor.” And you served extraordinarily well, continued to serve your country beyond your official service. And we really appreciate that. Development finance, through OPIC, which maybe last week you did not know was not an oil cartel, (audience laughing) is really trying to advance development goals and foreign policy by investing with the
private sector, right? We are catalyzing countries
to come up the economic scale by truly investing in them. We are looking on behalf
of American taxpayers to advance foreign policy with countries that we can help create an economy and a more stable societies with. We’re also looking to make
sure they’ve got basic needs that we take for granted here every day. Things like clean water,
affordable housing, infrastructure. And so we’ve got about $25 billion invested across 90
countries around the world. And those are typically low and low middle income countries. So you think about El Salvador, I was recently for the inauguration
of the president there. We’re helping them get 20%
more baseload energy power, when you talk about
putting a grid together. That’s gonna keep people in El Salvador and their families in Salvador for a more prosperous life there. Or I can flash over to a
Cameroonian eye hospital where we’re gonna cure
18,000 people of blindness, in a way that actually makes
healthcare affordable for many, but also profitable for the
people who have invested in it. So we’re really looking
to try to make sure that we’re between that grant,
official development systems that you’re talking about and into where markets
are self-sustaining. I like to think of what we do as the successor to the Marshall Plan. And you all know that the Marshall Plan helped rebuild Europe after World War Two to make it a prosperous
and stable society. It just seemed impossible at the time. But Americans went in, helped create trading relationships, helped create the infrastructure that Europe needed to
rebuild, and they did. And so what good looks like I think, which we’ve done in
Korea after the war there and after the Marshall Plan, is for Germany just two years
ago to be able to announce they’re doing their own
Marshall Plan for Africa. Because when you look at the demographics, as Africa goes, it’s the
way the world’s gonna go. These emerging markets are gonna have billions of new people. And if we’re not working to
make sure that they’ve got lives that they consider
prosperous and meaningful, then the world is gonna be more chaotic in the 21st century
than it was in the 20th. So I think we’re part of
managing a major transition. And I’m really proud to
be in the middle of it. – Speak a little bit about particular foreign policy objectives and challenges, and how OPIC are now the newest US Development Finance Corporation, can help be an integral part of our response to some of
these foreign policy hotspots? – Sure. Well, I’ll quickly go around the world. And I’d love to hear some of your stories about the Middle East also. But for instance, I mentioned El Salvador, one of the issues of our generation, obviously, is migration. Around the world, there are
70 million migrants now, who are spending more than
20 years in that status. And clearly, when it came
into this administration, that was an issue for
the Trump administration. And thinking about how 60% of migration through our southern border
comes through Mexico, meant that we wanted to try and help in El Salvador, Guatemala and Honduras, we call the northern triangle. So we directed more than a billion dollars in new investment there. Into the infrastructure, I
talked about like electricity, into affordable housing, into small, medium sized businesses so people can grow their
own business at home. I flash over to Africa, where I think about the needs that I mentioned earlier are so great. And trying to make sure that
logistics works over there. To get something from the
middle of continent here can take overnight with FedEx. But to get something from the
middle of continent in Africa, can take weeks, if not months. So to make them part of
the global trading system, logistics is key. So we’re working there. We’re working in their
communications technology as they come into the 21st
century in interconnectivity. We’re also working on a
value added manufacturing because so much what they do is create the raw products but they don’t actually
add the value to them before they export them. So that’s in Africa. I think about what we’re
doing in Southeast Asia. And we’re not only from a
foreign policy standpoint, helping build out their infrastructure, but we’re also, importantly I think, countering the influence of
China and other countries that are striking a tough and bad bargain for a lot of these countries, right? If you’re faced with
building infrastructure for your country, and
China comes knocking, they’re gonna offer you
extraordinarily cheap loans. But it’s not cheap over the long term. Because it’s gonna threaten
your nation’s sovereignty, it’s gonna not upskill your own workers, it’s gonna hurt your
environmental conditions. Some of the money is going to corruption and going to Switzerland rather than where your
taxpayers want it to go. And it’s not built to last. We’ve seen dams collapse
and bridges fall down. So there’s all sorts of
foreign policy reasons we’re working around the globe. But one that we’re
extraordinarily proud of is a women’s initiative that
we started two years ago with the Alumni of the Year
from here, Katie Kaufman, who, before she got there, only four out of 137 of our
deals were supporting women. Either women-owned businesses
or women-managed businesses or women-empowering businesses. Now we look around the world, we’ve helped almost $6 billion move towards empowering businesses and half of our deals go there. Because when you invest in women, they invest in their families, right? Guys put about 30 cents
per dollar they earn, back into their families. Women, 90 cents, right? So when we’re creating stable families, we’re creating stable communities, we’re creating stable
countries, and a stable globe. And you do that in the Middle East when we’re talking earlier about some of the work
you did with Israel. – Yeah, at the time. So I served in George W. Bush’s
administration, as did Dave. And at the time our
approach to the Middle East, particularly Israel and Palestine,
was a two state solution. In other words, we wanted to help create a state of Palestine that could live peacefully
side by side with Israel. Now Israel has a very robust economy. And at that time, the
Palestinian territories were struggling economically. And the policy of the administration was we can’t afford to create two
states next to each other, one of which is an economic implosion, and the other one is prospering. So our mandate was to try
and stimulate economic growth in the West Bank of Palestine. So I spent a lot of time working on that. And one of the projects I was proudest of, we supported a small and
medium sized financing facility for businesses in the West Bank. And it involved, and this is the way
these deals kind of work, OPIC typically will put up
like two thirds of the money and then we’ll get local
financial institutions to put up the other one third. So in this case, it was
a $230 million facility, of which OPIC put up 170 million. The local banks had to put up the balance. It started in 2000 I think six or seven. I heard not more than a year ago that they had lent out every
dollar of that $230 million. They had great repayment, and they’d come back to OPIC and said, could we do a second tranche? And instead of it being two thirds OPIC, one third Palestine, we’ll do 50/50. And that was a great tribute to the economic vitality of supporting small and
medium sized businesses. And we were supporting our foreign policy, which was to create a
healthier environment for a merger or, at least not a merger, but rather a coexistence of
two states in the Middle East. All right, I wanna
shift gears a little bit and go to something called the BUILD Act. So when I left OPIC in 2009, I was among many who felt that the tools that OPIC had were good, but they had not been modernized since literally since the
agency was created in 1971. And we were falling behind in terms of our competitive ability with other development
finance institutions. Particularly ones in
Europe and the Orient. So what many of us worked on was putting together a bill that would create or provide these new tools that were missing. And I’ll just mention two or three because I think it’s
important to understand exactly what was important. Today, OPIC can finance transactions that your bank won’t finance and they do that because they’re
willing to take the risk. But they can’t take
equity positions in deals. And in the environments that
Dave’s been talking about, in which they operate, you know, these are environments in which many of these companies are very thinly or lightly capitalized. So the ability to not just
finance a transaction, but also to put a little
equity into the deal makes a difference between whether or not that deal really takes
off or it struggles. So equity authority is
something that every other development finance
institution in the world has. OPIC didn’t. So we put it in this legislation. A second tool was there was a requirement that 25% of every deal that OPIC did be owned by an American citizen. And that’s an important way of
making sure we’re connected. But there were deals which
were foreign policy priorities, where you honestly could not find an American to participate. I’ll give you one quick example on that. I tried for three years to get an SME, small and medium sized enterprise, lending facility going in Afghanistan. And I’d go through Dubai
on the way to Afghanistan, which is where most of
the rich Afghans live. And I’d say, look, you
guys need to help us capitalize this bank. This is critical to
growing the Afghan economy. And they’d say, “Sure,
we’re willing to help you. “But where’s your 25% American partner?” And I tried for three
years to find somebody. And not surprisingly, I didn’t succeed. It’s a tough environment. But today, with these new
authorities that OPIC will have, if there’s a foreign policy
need that’s compelling, and there’s no American that’s interested, you can go forward with the transaction. So those are just a couple of examples. Now, all those different tools went into a proposal called the BUILD Act. And although I was involved
in drafting the proposal, I had nothing to do with
the acronym which stands for Better Utilization of Investment
Leading to Development. And we had a very broad base of support. We had a Freedom Caucus member on the right on House Foreign Affairs, a guy named Ted Yoho from
Florida, great American. We had Adam Smith, Democrat
congressman from Seattle, he should be a Republican. (laughing) And then in the Senate, we had Bob Corker, Chairman of the Senate Foreign Relations; and Chris Coons on the Democratic side. Legislation went through both Houses, passed, was signed into law. And so then the President
signed it in October a year ago. And the clock started running on basically a one year
transition and implementation. So that was Dave’s job. It was, all right, the clock’s running, how are you going to do this transition? So I wanna ask you, first, talk a little bit about the transition. Because OPIC goes away. It’s absorbed into a new US
Development Finance Corporation, as well as there’s some
other programs that go in. So he had to work on that transition, as well as how do you make
best use of the new tools? So if you would, just
pick it up from there. – Absolutely; well, I’ll
go back to go forward. You know, when you’re getting
a bill passed into law, it really started with the think tank that you’re affiliated with, the Center for Global Development, putting out into the world, here’s some tools will be a
good idea in 2011, wasn’t it? – Yeah. – And so that continued to gain momentum through Rob and others
really ensuring that people understood those three Ds we
were talking about earlier and what a key piece of
the puzzle development is. You know, a Secretary of Defense said, “If you cut the development budget, “I need to buy more bullets.” So people on the national
security side understood that. And the national security
strategy of the United States includes investment and trade and includes what
development finance does. Then on the development side, we’ve talked about women’s
empowerment earlier and we’ve talked about
all the wonderful tools we have to lift people out of poverty. So you’ve got this grand coalition, where I can honestly say, I can’t think of something else that Speaker Pelosi and President Trump have agreed on for three years in a row, except the BUILD Act, and that we should continue
to drive development finance. So that’s the stage setting. The bill passed last October. And, as Rob said, we had a clock that we needed to work against. I’ve gone through lots of
corporate reorganizations in my life as an investor
and an operator of companies. This was the first one required by law. So you knew you had a clarity of purpose on what to get done. I’ll tell you one of the
great foreign policy minds of our lifetime, Richard Haass, who also served in the
Bush administration, put together a book that I think
is useful for policymakers, called the “The
Bureaucratic Entrepreneur.” And he oriented around a compass. And I’ll tell you, when you’re trying to get something done in Washington, it’s an important compass to remember, or just in life or in
Austin or in public policy. But if you think about a compass, to your North, the people
you work for, right? The White House, your board of directors. The South, the people
who are working with you in the trenches every day. We clearly have Congress out to the East and other government agencies
that we’re working with, and the press and the NGOs. So it makes it a complicated
stakeholder map, right? So bringing all those folks along for implementation was crucial. We had a series of roundtables, which you participated in, across development and
impact and foreign policy in the business community and our alumni, to really understand
the opportunities ahead. From that we put together 51 different working groups for people. Internally, 250 people thought about how to do change management, which helps you be the
change you wanna be, as Gandhi might say. Beyond that, we had an
800 line item Gantt chart where we had to get
operational things done, everything from the badges
that we wear to work, to the new logo that we’ve unveiled. The one thing that we haven’t gotten done is that Congress hasn’t
passed the budget on time. But they haven’t done
that on time this century, so it’s predictable. (laughing) So we are launching this new agency, because development finance is the tool whose time has come. As you mentioned, equity
wasn’t part of it. Private equity is a major three billion, $4 billion,
part of our portfolio. Didn’t really exist in 1971, right? Political risk insurance,
which is a big part of it, OPIC really invented that 1971 and has been reinvented since. And then the project finance
needs are massive in the world. So they’ve taken our $25
billion portfolio today, that give us the ability
to invest $60 billion, which is a lot of money. But also the needs of the world
are in the trillions, right? So we’re gonna take that $60 billion, work with the private sector for 100s of millions of dollars. But we’re also going to work more closely with our European counterparts,
with our Asian counterparts. Because truly if you think
about the development needs and the sustainable development goals that the United Nations have put out, they’re calling about a $3.5 trillion gap to try and get to where the
world needs to be in 2030. So the needs’ massive. I think the Congress recognize it, I know the Administration recognize it, as a development tool, and also as a foreign policy tool. – And you touched a little
bit earlier on China. Many of you have heard
that China is involved in a very aggressive development program, that’s called One Belt, One Road. That’s one way it manifests itself. In other ways, it has bilateral
economic relationships with countries like Pakistan. It’s 100s of billions of dollar effort. It’s not clear whether or not in fact, what they’ve announced
in terms of commitments, is exactly what the full
commitment is going to be. But it’s a very challenging
situation around the world. Let me give you one statistic before I ask Dave to
talk a little bit about what the administration’s
response to this is. So China controls interest
or has a substantial interest in over 70 ports in over 35
countries around the world. Now, I don’t know a lot
about the port business, but I’ve been in that
business a little bit, in terms of transportation
of oil and gas products in barges and tugboats. That’s not the most lucrative
business in the world. Port terminals can make money for people, often they make money in
international relations, that’s not not on the up and up. But that’s not a great economic
sector to be in necessarily. My point is, China’s doing
this for geopolitical reasons. They’re building a blue-water navy. And the day may come before too long, where there are a whole bunch
of ports around the world where US ships are not allowed or it’s difficult to get into those ports. And so this is something
that has to be a high foreign policy priority
of this administration. And so I wanted to ask you, because you’ve been involved, you’ve been to the inner Pacific region particularly where they’ve
been most aggressive. But tell us a little bit about, what the Administration’s
response to this is, what OPIC’s response to this is? – Yeah, well I think back to my days as Assistant Secretary
of Commerce for Trade in the George W. Bush administration in the 2005 2009 period. And at that point, Hank
Paulson and I and others were trying to launch this
strategic economic dialogue to bring China into the
global trading system as a responsible stakeholder. The Chinese were talking
about harmonious development. And I would lead Clean Energy
trade missions to China, and we’d have dialogues about how the economic freedom
they were enjoying was gonna lead to democratic freedoms. Well, then I went away
for eight years, right, and came back, and the music has changed. They’re no longer talking
about harmonious development. Their authoritarian streak
is stronger than ever. And the hope for the democratic reforms that we might have expected
10 or 20 years ago, has not manifested itself. So in the national security strategy, we named China as a strategic competitor. Not an adversary. But somebody who is clearly looking to accede to superpower status, and trying to expand beyond
an Asian footprint, globally. And I think that what
the United States offers, not just the US government,
but our private sector, is frankly, just a better deal. Because as I said earlier, there are countries around the world that has surrendered their sovereignty because they can’t pay back the Chinese. There are 13 countries, at least according to the think
tank you’re on the board of that will be in sovereign
risk of losing their rating because they can’t pay back the Chinese. I’ve been to Sri Lanka
where they’ve got a port that the Chinese have now
seized for a 99 year lease. It’s right on the doorstep of India. It’s not an accident. So we’re going toe to toe with the Chinese all over the world with what
I think is a better offering. Not just on sovereignty,
but as I mentioned, we do a tremendous amount of due diligence on ensuring and respecting
the environment. We also are really trying to
empower these local societies, not just when it’s the
US government going in, but you know when our big
energy companies go in, and our big infrastructure
companies go in, they’re employing local workers. That’s not the way the
Chinese model works. Again, the money that we
spend on these projects goes to these projects. It doesn’t leave the country
by the billions sometimes when people are taking it out. Elites are taking it out
for their own purposes, for their own family, rather
than their own society. And last, build to last. It’s so crucial to have
quality infrastructure built around the world that
does last for generations. But I’ll tell you, here’s
why I think we win, and here’s where the difference is. By being private sector-led, it’s not just the 100s
of billions of dollars that Rob was talking about, it is trillions of dollars that we have in foreign direct investment that comes from Exxon, that comes from Procter and Gamble, that comes from Coca-Cola,
International Paper. All our great companies are
investing all over the world, and they’re investing
with American values, they’re investing with Aggie values. And they’re making sure
that we’re projecting the right way to do
business around the world. And again, 100s of billions
of dollars for China dwarfs what we’re doing
as a US government, but is dwarfed by what our
American companies are doing and Dutch companies are doing and Japanese companies are doing to raise standards for
societies around the world. So I do think countries
have a choice to make, and in infrastructure, they
can choose cheap or good. And I continue to the
hope they choose good. And then beyond that, a couple other legs of stool
that China doesn’t have. The women’s initiative
I talked about earlier. We have a society that has been
empowering women for decades in a way that China hasn’t
even started to try. So I think that’s an important element of our foreign policy and our soft power. Also, I’ve traveled to more than 70 countries around the world. Every one of them wants to have a Silicon Valley of that country. And the small medium sized businesses that we help support at OPIC, or that we’re known for
in the US government, are also a part of our secret sauce. That entrepreneurial
capitalism we talked about. So I also think that entrepreneurs are some of the world’s great citizens. Those are the folks who are
gonna go to their governments and say, “We need a better court system “so I can enforce my contracts. “We need intellectual property rights “so that I can enforce my patents. “We need less corruption “because I can’t afford to pay “what the big guys and the
elites are trying to pay.” So I really feel like it’s not just the infrastructure we’re competing on China with, it’s the small businesses
and the women empowerment, that’s gonna lead to a more democratic and prosperous 21st century. – Right. And by the way, I don’t
travel as much as Dave does, but I do work in a variety of markets in sort of emerging areas. And I’ve yet to hear a single person in a government say to me, we would much rather do business with the Chinese than you all. It’s the reverse. And in fact, many of them bemoan the fact that we’re not there competing, so that there is an option. And that’s part of what the
BUILD Act was all about. It was about trying to create the tools, to create the momentum, to create the focus to, as Dave said, go out and and strategically compete. We can’t match the
Chinese dollar for dollar, we don’t have to. We just need to be smart about
where we do decide to engage. So I’ve got some questions
from the audience that I’m gonna start with in a minute. But we have a great audience
that includes many students. And this is an institution
that’s all about service. So Dave, I want you to
talk a little bit about if folks are interested in going into the economic development field, or going into the service field as it relates to international assistance, what are some of the options they have? – Gosh, there’s options across the board. I think the world is
starting to understand what Einstein said decades ago, which is you can’t solve problems, in the same level of thinking in which they were created. And I think today that means that non-government organizations and governments and the private sector are coming together to solve problems they couldn’t with siloed solutions. So the first thing I’d say to students is think about it interdisciplinary. Think about ensuring that
you understand economics. Think about that you understand
how to read a balance sheet. Think about that companies that
are taking business classes need another geopolitics, whether that, again,
is in the oil business where those markets are global, or really just anything you do, in the stock market or otherwise, being driven by global events in a way that hasn’t been the past. But thinking across disciplines
is enormously important. When you get to Austin or Washington, there’s just so many different
options that you can pursue. In Washington, economic development. The State Department’s
working with us closely, the Treasury Department’s
working with us closely, the Commerce Department, an alphabet soup of other acronyms that include the Millennium
Challenge Corporation, the US Trade and
Development Administration, the US Agency for
International Development. Just get in there, get in
the mix, get the internships. Like I got to skip school in high school to work for my Congressman. I told you about my
White House experience. I got to skip a semester in law school to work for Newt Gingrich
and he became speaker. And just working in the system, whether that’s in government or whether that’s with
some of these think tanks that are putting together
the big thoughts become bills or whether that’s working anywhere where you’re contributing, which I know, I’m so proud
to see the ethos here of 70% of the students here
will serve in government. So just, I think, get in the mix, and there’s so many ways to do it. – Yeah. I might just say, I worked for George Herbert Walker Bush when he ran for the Senate in 1970. I was very young man. I was still in school. But I was so seized by
the opportunity to serve and, you know, that campaign
started out thinking that he was gonna be running
against Ralph Yarborough, who was the incumbent senator. And many of us felt Ralph
Yarborough was out of step with the majority of the state. Well, Lloyd Bentsen of
course beat Ralph Yarborough in the primary, and the rest is history. So I went and visited
with Congressman Bush in November of 1970. He was sitting in the Rayburn Room writing notes to probably half
the people in this audience, thanking them for what
they’d done in his campaign. And, you know, I said, “Congressman Bush, “I’d love to work on Capitol Hill.” And he said, “Well, where
would you like to work?” And I said, “Well, my mother,” who had actually literally
just passed away that August, “was from Tennessee.” And I said, “You know, there’s a senator “from Tennessee named Howard Baker, “that I’ve been very impressed by.” And I went to work for Howard
Baker in January of 1971 because George Herbert Walker Bush called Howard Baker and said, “Would you put this young guy to work?” So I started as an intern practically, and worked my way into a full time job. So, and it all started with
George Herbert Walker Bush. Okay, first question, in what sectors do you think OPIC will, or has had the most success, in attracting private investment, and why? – Well, really across the board, we work with Kiva, a
nonprofit organization, where we’ve supported
200,000 entrepreneurs to help their small businesses. And that the big dollars are clearly when we talk about
attracting the most capital into infrastructure. We just built a billion or building a billion dollar
toll road in Argentina, to try and help stabilize their economy. When you talk about airports,
like we have in Quito, those are big dollar items,
ports and affordable housing. So lots of the money
goes into infrastructure. But I think. equally important, isn’t the number of dollars
that we’re catalyzing, it’s the lives that we’re
changing on the ground, whether that’s a small
and medium sized business or somebody who’s getting a
mortgage for the first time or somebody who’s gaining
site for the first time. – In what area, geographic area I guess
they’re talking about, of the world, do you think OPIC is having the greatest impact through its programs? – You were the one that said geographics. So I’m going to go back to
the original intent maybe because I think we’ve
had an enormous impact throughout Latin America, when I talk about trying
to stem some migration and really working in El Salvador, Guatemala, Honduras closely, to help transform those economies. I also think in Africa, we make an enormous difference when I go to meet with
the Prime Minister there who’s now the Nobel Peace Prize winner, and talk about the reforms he’s making and how we can support what he’s doing as a model for Africa. But when it really comes down to what area we make the most difference in, it’s the women’s economy. When I talked about where are we having the most
ability to attract capital? It’s a $13 trillion opportunity. The biggest emerging market in the world is getting women engaged in
the market as much as men are. So I do think that’s a global opportunity, a generational opportunity. And if we do it right, we’ll create more peace
and prosperity globally. – How does trade policy impact entrepreneurial interventions, and how does OPIC help with
entrepreneurial engagement? – Well, I’ll also flash back to some of my Commerce
Department days there, where my job at the time was
knocking down trade barriers. To go to countries where
we had a trade dispute and say, “Gosh, you really
shouldn’t be stealing “intellectual property rights of Disney.” Or “you need to make sure that “our companies are competing
fairly for the tenders “that you’re putting
out in infrastructure.” And what I did at that point, was engaged entrepreneurs. And now that program has
spread to 120 countries where they exercise their
first amendment rights for the first time. You guys are used to
screaming at your Congressman and your President and
everybody else in between. They’re not used to that in Brazil, they’re not used to that in Mexico, they’re not used to
that in Russia and China and some other places. So to engage entrepreneurs
to say what I was saying, was an important force multiplier. Now when I think about where
OPIC can make a difference, I do think that entrepreneurship
is somewhat cultural. You need to have an ecosystem
in place for entrepreneurship. And I don’t just mean
Silicon Valley capital. I mean, a willingness to take risks. There are certain countries out there that don’t have that culture. So I think you need to
find the right places where people are willing
to start a small business, rather than just go into the
large data and enterprise. I think that’s crucially important. And so having these interventions
with these entrepreneurs, helps them grow their business, helps them employ people. And then most importantly,
helps them transform societies. I forget if it was Benjamin
Franklin or Adam Smith who said, “A nation of
shopkeepers is a stable society.” And so to have those, the people who are working in
small medium sized businesses, I think are enormously important
part of foreign policy. – And this question is
what are the top three most pressing areas of
institutional reform, where you feel more remains to be done? – Well, you’ve been
toiling in these fields longer than I have so I
might leave two for you. – Okay. (laughing) – No, for one, I think it really is trying to ensure that
major pools of capital, understand there’s a
global economy out there. There’s still a major home bias, even though the Fortune 500 gets half their revenue from overseas, I still think there’s too many pension fund managers,
foundation trustees, who think about only the US stock market. And I think for people
to think more broadly, isn’t necessarily an OPIC tool, but it’s important for our country to be more engaged in the world. And I think, again, that Einstein approach to being able to have public institutions work with private capital is what’s really gonna
help transforms things. So the more capital I
can catalyze this space, with the tools that
you were talking about, but not necessarily
having a US connection, or being able to invest equity, are absolutely crucial. But I bet you know two
more better than I do. (laughing) – Well, one statistic that I think is really important to understand is, if you went back 40 years and looked at capital flows
into the developing world, you would assume, and you
would assume correctly, that the vast majority of that was from public sector sources, in the form of foreign aid or
grants or some type of giving. That statistic is totally flipped. Today, 90% of the capital
flows into the developing world comes from private sector sources. So the public sector
part is only down to 10%. And so when I think of reforms, I hear a lot of people who are in that 10% part in Washington, who keep trying to figure out how to get the 90% folks into their 10%. Whereas they ought to be figuring out how to leverage the 90% to support American foreign policy. And give you an example of what
I wish happened more often, but still doesn’t happen nearly enough. And that is, many American businesses that do business abroad, don’t really engage with our government, unless an employee gets thrown in jail, then they’ll call the embassy and say, “Could you get
this person out of jail?” Or something happens;
it’s a rare occasion. And so there’s not that much dialogue between our government and
our business community. And yet in many ways, the objectives of those
businesses that are investing are very much similar to the objectives of our foreign policy and our presence in those countries. You know, they’re interested
in reducing poverty and they’re interested
in encouraging the kinds of approaches like being mindful of how many women are hired
for this or what’s going on. And yet, that dialogue
doesn’t happen enough between businesses that are
operating and our government. Give you one example that
kind of broke my heart, and that was Dole Foods created a pineapple and papaya operation in Mindanao in the
Philippines a few years ago. And they employed 4,000 people in an area that was in the
middle of a Muslim insurrection. The women were primarily
the people who were employed to work in this pineapple
and papaya plant. And they told the men,
“Lay down your arms.” And they did. And it brought peace to this area, it created kind of a governing council that was interactive
among multiple parties. And it was a huge success. And I’ll never forget
asking David Murdock, who was head of Dole, like 98% owner, and we were trying to get
him to help in Afghanistan. “So how often did you work with
the US government on this?” Never. And so, I think, one of the reforms we need to think about is, you know, we don’t want to burden
American businesses with bureaucratic challenges, but we need to kind of talk more about what our respective objectives are, so that where it’s possible, we can leverage each other and take advantage of
what one company is doing, to help support what our
government’s trying to do. So that’s an area where I
wish we could do better. Okay, last question for you. You’ve been in and out of government, you had the great privilege
of serving our country. And as you look back on
your experience at OPIC, what would you identify as the single most gratifying thing that
you’ve been involved in? – We have 700 projects
across 90 countries, I mentioned earlier, so
it’s hard to pick one. But I can trace my family’s history through some of OPIC’s projects. My grandfather left Armenia
as a refugee in 1915 when his village was destroyed. And a forced migration
forced him to leave his home. His sister was killed
and he and his mother walked across Asia for
the next five years, to eventually get to America. And so for me, to go back to Armenia, where OPIC is helping provide
a mortgage for a family, and I get a chance to talk to the father, and the son, who’s about my son’s age, is sitting there playing video
games like my son would be, I think, wow, he doesn’t
have the same kind of worries that my grandfather did. And part of that is because
what OPIC was able to do. My father went to medical
school and became an eye doctor. So when I visited that
Cameroonian eye hospital and they’re curing
18,000 people blindness, I get to go home with a
certain sense of pride and say, “Look what I did, dad.” And that’s special to me. And then the women’s
empowerment work that we do with two daughters at home as well. I know we’re creating a
better world for them. So it’s hard to pick any one deal. There’s so many great deals. I’d be interested in what you say, between the Middle East,
in the affordable housing, and everything else? – Well it’s, you know,
a lot of these projects have long sort of cycle times, to get them up and operating. And so, you know, when I hear somebody say somebody built a power project in Togo, that increased the power,
electricity availability, by 30%, transformational in people’s lives. – 300%, three times. – 300%, left off a zero.
– Yeah, exactly. – 300%. And now they’ve come back to
say, “We wanna to build more.” When I hear somebody say, boy,
that was a great investment. I was very proud of the fact that I was in the middle of
that and helped it happen. – My first experience with OPIC was I went to Iraq on a US Commerce
mission and went to Erbil, one of the oldest cities in the world. And visited a housing complex that you helped build with your financing. And the name of the housing project in the middle of one of the most ancient cities in the world in Iraq is called American villages. And so when people there want to buy something on California
Street or New York Avenue, (audience laughing)
I think that tells you that America is doing a pretty good job of continuing to be a beacon for democracy and
prosperity for 21st century and that’s one that you
did that I always felt– – Well, we both did, very fortunate. Okay, Raymond, I think
you’re going to wrap up. Ladies and gentlemen, thank you very much. – Thank you. (audience clapping) – Just a couple of housecleaning things. First of all, we’d like to
thank our fabulous speakers. Before you guys leave, could you just stay up
here for just a second? We do have a plaque to
commemorate, for you David. – Oh my gosh.
– If you don’t mind. This is obviously because
it’s your first visit but hopefully not your last. And we hope you’ll
consider this another home for you away from home. And obviously, y’all
made such a great team, and we know that you already
consider the Bush School home, but we have “Called to Serve “the history of the Bush school.” – That is awesome.
– And it’s marked in there for both of you, and we hope that you will treasure that, now we consider you part
of our Bush school family. So thank you all very much.
– It’s awesome. – And please I’d also like to thank Jennifer Moore and Cindy Gause for all their hard work for
making this happen tonight. And to all of you for coming. So thank you all very much and please join me in
thanking our speakers. (audience applause) – [Speakers] Thank you. – Fantastic job.

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