Moving DCA Out Of USAID Could Reduce Agency’s Ability To Incorporate Private Sector Into Development Work

Devex: Opinion: The Development Credit Authority needs to stay in USAID
Eric G. Postel, associate administrator at USAID from 2011-2017, and Andrew Natsios, executive professor and director of the Scowcroft Institute of International Affairs at the Bush School of Government & Public Service at Texas A&M University

“…[T]he planned legislation [to transform the Overseas Private Investment Corporation into the ‘U.S. development finance institution’ (DFI)] contains one especially destructive provision that is unnecessary to achieve its broader intent [for a more robust global financing platform]. It calls for the consolidation of the United States Agency for International Development’s flagship private sector engagement tool, the [Development Credit Authority (DCA)], into the new DFI. … Having seen the development of the DCA tool and its significant expansion within USAID, we are alarmed by the notion that it should now be stripped from the agency and placed into the new DFI to ‘increase operational efficiencies’ and ‘reduce redundancy.’ In our view, doing so will have the exact opposite effect and will greatly reduce USAID’s ability to incorporate the private sector into its development work. … DCA’s enthusiastic and bipartisan supporters in Congress are unlikely to allow this to happen. And even if they do for political reasons, the need for the tool is so strong within USAID that we predict it will eventually be recreated inside USAID by some future administration. Let’s save the trouble and get this right” (2/26).