The Overseas Private Investment Corporation (OPIC) is a U.S. government agency created to support private INVESTMENT by U.S. firms abroad. OPIC’s primary activities include
• insuring investments overseas against political risks
• financing overseas business investments
• financing private investment funds that provide equity to businesses overseas
• advocating American business interests overseas
OPIC insurance reduces business RISK. Insuring against political risks stimulates U.S. businesses to invest in EMERGING MARKETS where the potential for changing business rules, government expropriation, or political turmoil would otherwise preclude investment. User fees, charged to participating CORPORATIONs, finance political-risk insurance. OPIC offers direct LOANS—up to $200 million per project— and loan guarantees for U.S. businesses investing abroad. Since it was created in 1971, the agency has supported $138 billion worth of investments. OPIC programs are justified on the basis of generating U.S. exports, creating domestic jobs through exports, and generating hostcountry ECONOMIC GROWTH. OPIC also provides private investment funds for developing countries. In 1999 the agency initiated the New Africa Infrastructure Fund, with $227.5 million from OPIC and $122.5 million of institutional-investor funds. The fund, managed by a consortium of financial advisors, invests in telecommunication and other INFRASTRUCTURE needs on the African continent. OPIC’s advocacy mission is conducted through seminars and conferences to increase awareness among U.S. companies and interaction with other agencies and organizations involved with investment in emerging markets. The agency’s critics, point to its support of socially and environmentally harmful projects, including timber, mining, and fishing ventures around the world. OPIC provided political risk insurance for Freeport McMoRan’s controversial copper and gold mine in Irian Java, Indonesia. Critics also object to a U.S. government agency providing financial support for private investment ventures outside the country.
See also U.S. TRADE REPRESENTATIVE.