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The Overseas Private Investment Corporation (OPIC) was an institution created by US government in 1971 with the mission of fostering economic development in emerging markets. The national government realized that foreign policy objectives were best achieved by acting in partnership with private enterprise and encouraging the participation of private capital in the development of these countries. Thus, OPIC was established to attract and motivate overseas investment.
OPIC saw itself as a bridge between the public and private sector, providing investors with insurance or guarantees against political or commercial risks with which companies might be faced when engaging in business abroad. Financial instruments such as direct financing, risk insurance and finance guarantees provided by OPIC — alongside political risk insurance offered by the US government — enabled investors to commit capital to financially sound, potentially high-yielding projects in developing and emerging market countries, while simultaneously protecting the company's foreign investors from unforeseen and often unique risks associated with projects in these markets.
Moreover, OPIC only acted on projects that were in line with US foreign policy objectives and that were seen as having a national security significance. These projects were able to bring economic development and stability to certain regions in the world, create job opportunities and avoid destabilizing the country in which it was being implemented, thus providing investment stability over time.
OPIC was, therefore, an innovative initiative that managed to bring private capital to developing countries and to promote the economic growth in emerging markets. In 2019, OPIC fused with the USAID’s Development Credit Authority to form the US International Development Finance Corporation, an entity with the same highly successful development model that enabled investors to expand their reach to the most vulnerable countries.
Overall, OPIC was an essential institution for US foreign policy that provided long-term development and stability abroad, helping both emerging markets and US investors. It served as an example of how the public and private sectors can work together towards the common goal of global stability.
OPIC saw itself as a bridge between the public and private sector, providing investors with insurance or guarantees against political or commercial risks with which companies might be faced when engaging in business abroad. Financial instruments such as direct financing, risk insurance and finance guarantees provided by OPIC — alongside political risk insurance offered by the US government — enabled investors to commit capital to financially sound, potentially high-yielding projects in developing and emerging market countries, while simultaneously protecting the company's foreign investors from unforeseen and often unique risks associated with projects in these markets.
Moreover, OPIC only acted on projects that were in line with US foreign policy objectives and that were seen as having a national security significance. These projects were able to bring economic development and stability to certain regions in the world, create job opportunities and avoid destabilizing the country in which it was being implemented, thus providing investment stability over time.
OPIC was, therefore, an innovative initiative that managed to bring private capital to developing countries and to promote the economic growth in emerging markets. In 2019, OPIC fused with the USAID’s Development Credit Authority to form the US International Development Finance Corporation, an entity with the same highly successful development model that enabled investors to expand their reach to the most vulnerable countries.
Overall, OPIC was an essential institution for US foreign policy that provided long-term development and stability abroad, helping both emerging markets and US investors. It served as an example of how the public and private sectors can work together towards the common goal of global stability.