The budget just released zeroes out the Overseas Private Investment Corporation, the nation’s development finance institution. In an era where many government agencies are under threat, it may not be surprising that OPIC would come under fire. Yet, none of the arguments often used to justify killing off OPIC are logical. Here’s why.
CGD Policy Blogs
The debate at a recent CGD event eloquently demonstrated once again that this is a moment of deep uncertainty and basic disagreement about the future and purpose of aid programs and development agencies. But even more risk is introduced into this perilous mix if we fail to understand what we already have in the toolkit and how these tools can be used to meet needs.
The rate is still very low at 0.75% in the US, and, in addition, there is no perception or expectation that rates are about to rise in other advanced economies such as Japan or the EU. Taken together then, interest rates in advanced economies look set to stay extremely low. So, for now at least, emerging markets may not need to worry too much about capital inflows drying up. But in the medium to long term a problem may loom for emerging markets.
The Foreign Aid Cuts Look to Be Real Enough, but the Trump Administration Doesn’t Necessarily Want to Own Them
So it turns out the “skinny budget” released by the White House is really just a press release—a sprinkling of numbers amidst a lot of assertion and characterization of the real budget that is yet to come. When it comes to foreign assistance, the skinny budget doesn’t quite know what it wants to be, with statements that are both confused and confusing.