Summary: The Overseas Private Investment Corporation (OPIC) was created to mobilize and facilitate the participation of U.S. private capital and skills in the economic and social development of less developed friendly countries. GAO was asked to review OPIC to determine the developmental impact of OPIC-supported investments, the effects of these investments on the U.S. economy, and the participation of small U.S. businesses in OPIC programs.
OPIC has made progress in diversifying its finance and insurance portfolios toward the poorer developing countries and has adopted project screening criteria consistent with congressional guidelines. However, OPIC has only limited opportunities to enhance the developmental aspects of individual investment projects or to be particularly selective in choosing investments to support. For the poorer countries and for small business investors, the availability of OPIC services has some importance in the decisions of potential investors. GAO believes that a restriction on OPIC activities in countries having per capita incomes above $1,000 could be removed. The kinds of investments likely to spur U.S. exports and the possible conflicts that might arise between country development interests and U.S. export interests need to be more fully explored. OPIC needs to examine each investment proposal thoroughly for trade effects and possible development conflicts. GAO did not find a direct relationship between overseas investment and subsequent U.S. job losses but found clear inadequacies in aspects of the OPIC screening and monitoring processes. Large U.S. firms remain the major users of OPIC as small businesses generally lack the resources and expertise to establish ventures overseas and to remain for long periods. OPIC could increase small business participation through closer collaboration with embassy and Agency for International Development (AID) officials and by providing more advantageous insurance rates for small businesses.
