On Sunday’s episode of CBS’s 60 Minutes, Secretary of State Antony Blinken spoke at length about the complexities of America’s relationship with China.
One major aspect of that relationship is economic, with interviewer Norah O’Donnell noting that China may surpass the United States in gross domestic product by 2028. For the U.S. to remain economically competitive on the world stage, the U.S. International Development Finance Corporation, or DFC, must have permanent leadership.
At present, the institution is led by acting CEO and Deputy General Counsel Dev Jagadesan. He has been at the DFC and its predecessor organization since 2001. Given Jagadesan’s institutional memory, he would be a strong choice to lead up the organization on a permanent basis. However, whether it is Jagadesan or someone else who gets the job, the DFC needs a permanent leader at its helm. That leader must ensure the organization prioritizes bipartisanship.
The U.S. needs strong alliances, and not just with more economically developed countries. Put simply, we must build better bridges with developing nations. Consider how China has made major investments through its Belt and Road Initiative. We need to offer a better alternative to Beijing’s always-strings-attached approach to foreign investment. Fortunately, the DFC is not prohibited from working in upper-middle income countries and can do so either for development or national security reasons, which is a major change from the authority granted to its predecessor organization.
It gets better, because the Development Credit Authority, previously part of the United States Agency for International Development, guarantees up to 50% of financing on investments that private sector entities might normally deem too risky. The Authority is now housed within the DFC. This should help get valuable projects, and associated positive American influence, up and running sooner rather than later. Facing China’s grand competition, the U.S. can no longer excuse lethargy at the action level of its development policy apparatus.
The DFC and its mission are of the utmost importance to U.S. foreign policy and national security. President Joe Biden should give the DFC the leadership it needs.
J.P. Carroll is a senior fellow for national security and inclusive governance at the Joseph Rainey Center for Public Policy. He tweets @JPCarrollDC1
