Economic Growth and Development Act

The promotion of sustainable economic growth is the only long-term solution to lifting people out of poverty and addressing development challenges such as infectious disease, food security, education, and access to clean water.

Several of the greatest development success stories in the last 50 years demonstrate how private sector investment and economic growth are fundamental to lifting populations out of poverty.

There has been a dramatic shift in the composition of capital flows to the developing world. Whereas 40 years ago more than 70 percent of capital flowing to developing countries was public sector foreign assistance, today 87 percent of capital flowing to the developing world comes from the private sector.

Eleven of the 15 largest importers of United States goods and services are countries that graduated from United States foreign assistance, and 12 of the 15 fastest growing markets for United States exports are former United States foreign assistance recipients.

With 12 departments, 26 agencies, and more than 60 Federal Government offices all involved in the delivery of United States foreign assistance, it is extremely difficult for United States businesses to navigate the bureaucracy in search of opportunities to partner with such United States agencies.

Although many United States development agencies have taken steps to improve their private sector coordination capabilities in recent years, these agency-specific strategies remain opaque and must be integrated into a coherent interagency coordination structure to engage the private sector.

President Barack Obama's 2010 Policy Directive on Global Development created an Interagency Policy Committee (IPC) for Global Development. However, the IPC has not yet established a streamlined, interagency mechanism for coordination with the private sector.

In order to better leverage United States foreign assistance dollars and to promote sustainable economic development in partner countries, the private sector should be consulted during development planning and programming processes.

Whether it is in the context of country, sector, or global development strategy, decisions on program prioritization and resource allocations would benefit greatly from private sector perspectives and market data.

By consulting with the private sector from the outset, development programs can be designed to better attract private sector investment and to promote public-private partnerships in key development sectors.

The Millennium Challenge Corporation and the Partnership for Growth both analyze constraints to growth as part of their planning processes, but these analyses need to be included in agency country, sector, and global development strategies to more effectively inform and guide the full spectrum of United States development programs.

Administrator— The term Administrator means the Administrator of the United States Agency for International Development.

United States development agencies— The term United States development agencies means the Department of State, the United States Agency for International Development, the Millennium Challenge Corporation, the Overseas Private Investment Corporation, the Trade and Development Agency, the Inter-American Foundation, and the African Development Foundation.

Private sector— The term private sector means for-profit United States businesses.

Secretary— The term Secretary means the Secretary of State.

enhancing coordination between United States development agencies and their programs and the private sector and its investment activities;

integrating private sector input into United States development agencies planning and programming processes;

institutionalizing analyses of constraints to growth and investment throughout United States development agencies planning and programming processes; and

ensuring United States development agencies are accountable for progress toward improving coordination of United States development programs and private sector investment activities.

In general— The President, in consultation with the Secretary, the Administrator, the Chief Executive Officer of the Millennium Challenge Corporation, the Department of Commerce, and the heads of other United States agencies that undertake development efforts, shall establish a primary mechanism to assist the private sector in coordinating United States development programs with private sector investment activities.

Duties— The mechanism established under subsection (a) shall—

In general— The Secretary, the Administrator, and the heads of other agencies that conduct relevant development activities shall ensure that rigorous constraints to growth and investment analyses are available and integrated as a component of all appropriate country, region, and sector development strategies.

Matters To be included— The analysis required under subsection (a) shall include, at a minimum, an identification and analysis of—

Conduct— If a credible constraints analysis meeting the requirements set out in subsection (b) for a particular country, region, or sector has not already been conducted by another United States Government entity or multilateral institution, the analysis shall be conducted by teams composed of representatives of relevant United States agencies which will consult with international organizations, the private sector, including representatives from commercial sectors of recipient countries, and other stakeholders. In all instances, whether using an existing constraints analysis or a specially conducted one, the constraints analysis shall be made available to the public, and for comment by all stakeholders prior to finalization of development strategies.

Results— The results of the analysis required under subsection (a) shall be incorporated into development strategies of United States development agencies and shall be used to inform and guide resource allocations.