Overseas Private Investment Corporation
Overseas Private Investment Corporation
THE OVERSEAS PRIVATE INVESTMENT CORPORATION (OPIC) CAN BE VERY USEFUL when dealing with developing countries. It is unlike any other federal agency in its entrepreneurial approach. With the Agency for International Development (AID) operating mostly on a government-to-government basis, in 1971 it was felt a separate, business-oriented organization should exist to assist American business-people and investors interested in doing business in friendly Third World developing nations. OPIC's operations are restricted to this area of some 100 countries.
Organized as a self-sustaining corporation, OPIC received only start-up funding, which has been repaid. Its purpose is to promote economic growth in developing countries by encouraging American private investment in those nations. As in the case of Eximbank, it enjoys the "full faith and credit" backing of the U.S. government. Its primary functions are project-related medium- to long-term political financing and political risk insurance. OPIC also has a special, small business orientation and engages in educational and informational undertakings notably through its investment missions. The Omnibus Trade Bill of 1988 increased its overall guarantee ceilings and loan funds.
Because of OPIC's unique characteristics, it can be difficult to clearly determine its programs, which might shift at times as a result of budgetary restrictions and congressional mandates. The same is true to an extent of the countries in which OPIC can operate. Some countries might emerge from developing-nation status, while others become so destabilized that it is impossible for OPIC to acceptthe risks any longer. Since OPIC is always attempting to add other developing countries to its list of eligible nations, it is best to check with OPIC if you are uncertain about the status of a program or country.
A sovereignty must permit OPIC operations in its country through a government-to-government agreement. This agreement includes certain conditions that are not always acceptable to that country. An example is Mexico, a nation that could have greatly benefited from OPIC operations, but has refused to agree to certain arbitration conditions, and therefore, OPIC involvement. Finally, Mexico is reconsidering this position. Following is an overview of OPIC's current programs.
THE OVERSEAS PRIVATE INVESTMENT CORPORATION (OPIC) CAN BE VERY USEFUL when dealing with developing countries. It is unlike any other federal agency in its entrepreneurial approach. With the Agency for International Development (AID) operating mostly on a government-to-government basis, in 1971 it was felt a separate, business-oriented organization should exist to assist American business-people and investors interested in doing business in friendly Third World developing nations. OPIC's operations are restricted to this area of some 100 countries.
Organized as a self-sustaining corporation, OPIC received only start-up funding, which has been repaid. Its purpose is to promote economic growth in developing countries by encouraging American private investment in those nations. As in the case of Eximbank, it enjoys the "full faith and credit" backing of the U.S. government. Its primary functions are project-related medium- to long-term political financing and political risk insurance. OPIC also has a special, small business orientation and engages in educational and informational undertakings notably through its investment missions. The Omnibus Trade Bill of 1988 increased its overall guarantee ceilings and loan funds.
Because of OPIC's unique characteristics, it can be difficult to clearly determine its programs, which might shift at times as a result of budgetary restrictions and congressional mandates. The same is true to an extent of the countries in which OPIC can operate. Some countries might emerge from developing-nation status, while others become so destabilized that it is impossible for OPIC to acceptthe risks any longer. Since OPIC is always attempting to add other developing countries to its list of eligible nations, it is best to check with OPIC if you are uncertain about the status of a program or country.
A sovereignty must permit OPIC operations in its country through a government-to-government agreement. This agreement includes certain conditions that are not always acceptable to that country. An example is Mexico, a nation that could have greatly benefited from OPIC operations, but has refused to agree to certain arbitration conditions, and therefore, OPIC involvement. Finally, Mexico is reconsidering this position. Following is an overview of OPIC's current programs.
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