Section 1 Short title
This Act may be cited as the “Economic Growth and Development Act”.
Economic Growth and Development Act
A BILL
To direct the President to establish an interagency mechanism to coordinate United States development programs and private sector investment activities, and for other purposes.
Sec. 2 Findings
Congress makes the following findings:
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, access to education, and access to clean water, as reflected in the Sustainable Development Goals adopted at the United Nations Sustainable Development Summit on September 25, 2015.
Several of the greatest development success stories of the past 50 years demonstrate that private sector investment and economic growth are fundamental to lifting populations out of poverty.
A dramatic shift in the composition of capital flows to the developing world necessitates a new approach to official development assistance; whereas 40 years ago more than 70 percent of capital flowing to developing countries was public sector foreign assistance, today over 80 percent of capital flowing to the developing world comes from the private sector.
In order to better leverage United States foreign assistance dollars and to promote sustainable economic development in partner countries, the United States Government must seek to promote economic growth through private sector investment by consulting United States business during development planning and programming processes.
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 involved in the delivery of United States foreign assistance and the promotion of United States investment overseas, it is unnecessarily difficult for United States businesses to navigate this bureaucracy in search of opportunities to partner with such United States agencies.
Although many United States development agencies have taken steps to improve the private sector coordination capabilities of such agencies in recent years, these agency-specific strategies are not integrated into a coherent interagency coordination structure to effectively engage the private sector.
The United States Government has no streamlined, interagency mechanism for coordination with the private sector for the purposes of development or promotion of opportunities for investment, nor are the activities of the United States Government in this area guided by a coherent set of strategic objectives, targets, or operating principles.
Whether in the context of a country, sector, or global development strategy, decisions regarding program prioritization and resource allocation would benefit greatly from private sector perspectives and market data and coordination 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 on growth as part of the planning processes of these organizations, 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.
Sec. 3 Definitions
In this Act:
Administrator— The term Administrator means the Administrator of the United States Agency for International Development.
Appropriate congressional committees— The term “appropriate congressional committees” means—
the Committee on Foreign Relations and the Committee on Appropriations of the Senate; and
the Committee on Foreign Affairs and the Committee on Appropriations of the House of Representatives.
Private sector— The term private sector means for-profit United States businesses.
Secretary— The term Secretary means the Secretary of State.
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.
Sec. 4 Purpose
The purpose of this Act is to maximize the impact of United States development programs by—
enhancing coordination between United States development agencies and the programs of such agencies and the private sector and the investment activities of the private sector;
integrating private sector input into the planning and programming processes of United States development agencies;
institutionalizing analyses of constraints on growth and investment throughout the planning and programming processes of United States development agencies;
ensuring United States development agencies are accountable for improving coordination between United States development programs and private sector investment activities; and
promoting and facilitating private sector investment.
Sec. 5 Sense of Congress on United States Development Assistance
It is the sense of Congress that—
United States development assistance should be pursued in a way that aims—
to build and strengthen civic institutions;
to provide for public accountability; and
to serve as the basis for a democratic social contract between the people and their government, and as a basis for graduation from assistance;
United States Government policies and decisions should be guided by clear benchmarks for the evaluation of partner country commitment to funding development priorities, including the “investing in people” metric of the Millennium Challenge Corporation;
United States Government programs should be guided by a unified strategy, ambitious targets, and a robust monitoring, evaluation, and public accountability plan;
United States development assistance should aim to help build the capacity of partner countries to raise and commit partner country resources toward development goals, including—
the capacity to increase revenues;
transparent budgeting and expenditures;
policies and laws that increase domestic investment; and
the ability to address the illicit flows of capital from domestic and international sources;
the Addis Ababa Action Agenda, reached at the Third International Conference on Financing for Development, and the emphasis of the Addis Ababa Action Agenda on economic growth and the commitment of greater domestic resources towards development goals, serves as a basis for concrete actions by donors and partner countries to achieve greater accountability and to foster broad-based economic growth and the establishment of prosperous, middle class-based societies;
domestic resource commitments and domestic resource mobilization for development purposes provide a greater chance for sustainability and an alignment of incentives among stakeholders, including donors, partner countries, citizens, and the private sector that drives economic growth;
the domestic resource commitments described in paragraph (6) are opportunities to provide for greater accountability and the building of strong, just social contracts between people and their governments, allowing governments to raise revenue, address citizen priorities, and be held accountable for results;
fostering domestic capacity and domestic responsibility for outcomes is the basis of true country ownership and a transition from assistance to sustainability by achieving development goals;
public sector development finance programs, which mobilize private capital to achieve development objectives, are projected to soon overtake traditional grant-based assistance as measured by total capital investments, reflecting an increasing recognition by both donor and recipient countries of the potential that development finance holds for driving inclusive, sustainable economic growth;
United States development finance programs should be used for development purposes, complement but not displace private capital, and operate free of political agendas;
while the United States has the ability to carry out development finance programs through the Overseas Private Investment Corporation, the Development Credit Authority of the United States Agency for International Development, and the United States Trade and Development Agency, that ability is under-appreciated as a matter of policy and underutilized as a matter of development strategy;
the Overseas Private Investment Corporation lacks certain development finance tools, including the ability to make limited equity investments in projects rather than issuing debt and the authority and resources to provide first-loss guarantees or technical assistance;
the Overseas Private Investment Corporation is also limited by uncertainty around the renewal of its legal authorities and would be more effective with the stability and predictability provided by a multi-year authorization and a reformulation of how the agency may use its proceeds for essential staff and overhead expenses while still returning money to the Treasury; and
United States development assistance should prioritize and better coordinate resources that support enhanced trade capacity and facilitate fairer and more sustainable trade with partner countries.
Sec. 6 Interagency Strategy and Mechanism to Coordinate United States Development Programs and Private Sector Investment Activities
In general— The President shall establish a primary, interagency 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—
streamline and integrate the various private sector liaison, coordination, and investment promotion functions of United States development agencies;
facilitate the use of various development and finance tools across United States development agencies to attract greater private sector participation in development activities; and
establish a single point of contact for the private sector for partnership opportunities with United States development agencies.
Annual Strategy—
In general— Not later than 1 year after the date of enactment of this Act, and annually thereafter, the President shall submit to the appropriate congressional committees a strategy for the facilitation and coordination of private sector investments and activities for the purposes of development.
Elements of the annual strategy— The annual strategy required under paragraph (1) shall include—
country, sectoral, and global targets for private sector investment facilitation and coordination;
a description of the specific roles and responsibilities of United States Government departments and agencies involved in meeting the targets described in subparagraph (A), including within United States missions in-country; and
a plan relating to monitoring, evaluation, and public accountability.
Sec. 7 Integrating Private Sector Coordination in Country, Sector, and Global Development Strategies
The Secretary and the Administrator shall direct their respective policy teams, including the Assistant to the Administrator for the Bureau of Policy, Planning and Learning, and country teams, to include private sector facilitation and coordination in all country, sector, and global development strategies, including integrated country strategies, regional and functional strategies, country development cooperation strategies, mission strategic resource plans, and global development strategies.
Sec. 8 Analysis of Constraints on Growth and Investment in Foreign Countries and Sectors
In general— The Secretary, the Administrator, and the heads of other relevant Federal agencies shall ensure that analyses of rigorous, current constraints on growth and investment guide all country, region, and sector economic development strategies.
Matters To be included— The analysis required under subsection (a) shall include the identification and analysis of—
constraints posed by the inadequacies of critical infrastructure, rule of law, tax and investment codes, and customs and regulatory regimes of recipient countries, as appropriate; and
particular economic sectors that are central to achieving economic growth, such as agriculture, transportation, energy, and financial services.
Results— The results of the analyses described under subsection (a) shall—
be incorporated into the development strategies of United States development agencies;
be used to inform and guide resource allocations; and
be made available to the public, and for comment by all stakeholders, prior to finalization of development strategies.
Sec. 9 Report
Not later than 1 year after the date of the enactment of this Act, the President shall transmit to the Committee on Foreign Relations of the Senate and the Committee on Foreign Affairs of the House of Representatives a report that describes the specific measures that have been taken to implement this Act and the outcomes that such measures are intended to produce.