{
  "id": "R45461",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "R45461",
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  "source": "EveryCRSReport.com",
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      "id": 589896,
      "date": "2019-01-15",
      "retrieved": "2019-01-16T23:11:03.415099",
      "title": "BUILD Act: Frequently Asked Questions About the New U.S. International Development Finance Corporation",
      "summary": "Members of Congress and Administrations have periodically considered reorganizing the federal government\u2019s trade and development functions to advance various U.S. policy objectives. The Better Utilization of Investments Leading to Development Act of 2018 (BUILD Act), which was signed into law on October 5, 2018 (P.L. 115-254), represents a potentially major overhaul of U.S. development finance efforts. It establishes a new agency\u2014the U.S. International Development Finance Corporation (IDFC)\u2014by consolidating and expanding existing U.S. government development finance functions, which are conducted primarily by the Overseas Private Investment Corporation (OPIC) and some components of the U.S. Agency for International Development (USAID). \nWhile the IDFC is expected to carry over OPIC\u2019s authorities and many of its policies, there are some key distinctions. For example, in comparison to OPIC, the new IDFC, by statute, is to have the following: \nMore \u201ctools\u201d to provide investment support (e.g., authority to make limited equity investments and provide technical assistance). \nMore capacity (a $60 billion exposure cap compared to OPIC\u2019s $29 billion exposure cap).\nA longer authorization period (seven years compared to OPIC\u2019s year-to-year authorization through appropriations legislation in recent years). \nMore specific oversight and risk management (including its own Inspector General [IG], compared to OPIC, which is under the USAID IG\u2019s jurisdiction). \nA key policy rationale for the BUILD Act was to respond to China\u2019s Belt and Road Initiative (BRI) and China\u2019s growing economic influence in developing countries. In this regard, the IDFC aims to advance U.S. influence in developing countries by incentivizing private investment as an alternative to a state-directed investment model. The BUILD Act also aims to increase the effectiveness and efficiency of U.S. government development finance functions, as well as to achieve greater cost savings through consolidation. \nThe BUILD Act requires the Administration to submit to Congress a reorganization plan within 120 days of enactment of the act, and the IDFC is not permitted to become operational any sooner than 90 days after the President has transmitted the reorganization plan.\nThe 116th Congress will have responsibility for overseeing the Administration\u2019s implementation of the BUILD Act. As the IDFC is operationalized, Members of Congress may examine whether the current statutory framework allows the IDFC to balance both its mandates to support U.S. businesses in competing for overseas investment opportunities and to support development, as well as whether it enables the IDFC to respond effectively to strategic concerns especially vis-\u00e0-vis China. Congress also may consider whether to press the Administration to pursue international rules on development finance comparable to those that govern export credit financing. More broadly, the IDFC\u2019s establishment could renew legislative debate over the economic and policy benefits and costs of U.S. government activity to support private investment, and whether such activity is an effective way to promote broad U.S. foreign policy objectives.",
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  "topics": [
    "Appropriations",
    "Economic Policy",
    "Foreign Affairs",
    "Industry and Trade"
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}