TACOMA, Washington — The United States International Development Finance Corporation (DFC) is a relatively new development agency that targets low- to middle-income countries for development initiatives. Coming about as part of the Better Utilization of Investments Leading to Development Act, or the BUILD Act, in 2018, the DFC promotes a culture of accountability and transparency among developmental policies. Additionally, its board members have vital experience in labor organization, environmental protection and various diplomatic fields, as well as in private sector management and investment. Working closely with the U.S. Agency for International Development (USAID), the organization’s goal is to support developing economies on the road to self-sufficiency. To demonstrate the agency’s success thus far, here are three examples of developing nations that benefit from the DFC.
How Countries May Benefit From The DFC
- Pakistan: The rate of poverty in Pakistan fell, by trend, from 64.3% in 2001 to 24.3% in 2015, showing remarkable progress in the eradication of poverty. However, the nation lacks strong government institutions to adequately facilitate further development and a large portion of its population still lives in poverty. The DFC’s development initiatives, therefore, aim at rebuilding Pakistan’s civic infrastructure. This includes supporting the construction and repair of roads and electric infrastructure while providing a jolt to Pakistan’s economy and securing U.S. foreign policy interests.
- Indonesia: Although Indonesia’s official poverty rate is reported at less than 10% of the population, the bar for being considered impoverished in the archipelagic nation is much too low. As such, poverty in Indonesia is much more widespread than the numbers indicate. For years, Indonesia had relied mainly on China for development funds, but Indonesian President Joko Widodo seems to favor the DFC’s transparent business policy over the often-impenetrable apparatus of China’s international development organization, exemplified by its Belt and Road Initiative. President Widodo has also been critical of China’s policy of exporting Chinese workers to Indonesia to work the jobs it helps create there. On the other hand, although COVID-19 halted a deal with the DFC to begin a significant infrastructure project, President Widodo remains hopeful that progress with the U.S.’s programs will resume in 2021.
- Kenya: Poverty remains a serious concern in Kenya. In 2015, more than 85% of its population made less than five dollars per day. Perhaps comfortable doing business with both China and the U.S., Kenya currently has trade agreements with both countries. However, the African nation received more than $3 billion worth of imports from China in 2019, compared to $391 million from the U.S. Therefore, as a part of the current China-U.S. animosity, the U.S. is seeking to compete with its Asian rival by fostering greater economic influence in developing countries. One way the U.S. may achieve this is by increasing the number of American imports to Kenya and fostering grassroots development. As such, the new U.S. development agency is seeking to do just that, simultaneously demonstrating the potential that other countries may have to benefit from the DFC.
With the ever-growing threat of China on the horizon, the U.S. is working harder than ever to secure its national interests against foreign adversaries. As shown in the cases of South Korea and Germany, the provision of aid is the most effective way to foster a future ally, not to mention the countless ways humanitarian issues are softened by sustainable development. By committing to the DFC’s sustainable development initiatives, therefore, America seeks to lead low- to middle-income economies on a path to self-sufficiency and higher standards of living.
– Taylor Pangman