An audio file of this briefing is available here.
Moderator: Good morning everyone from the U.S. Department of State’s Asia Pacific Media Hub in Manila. We apologize for the brief delay in starting. I am Zia Syed, the Hub Director, and I would like to welcome our journalist participants dialing in from across the continent and the United States.
Today we are very pleased to be joined by Adam Boehler, CEO of the new U.S. International Development Finance Corporation, also known by its initials, DFC. We’ll begin today’s call with opening remarks from Mr. Boehler. We’ll try to get to as many questions as we can during the time that we have, which is approximately 20 minutes.
Finally, as a reminder, today’s call is on the record. And with that, I’ll turn it over to Mr. Boehler. Please, go ahead.
Mr. Boehler: Well, thank you very much for the introduction. And I want to thank everybody for taking the time to speak with me today. What I’ll do is a quick introduction on DFC, why I’m here in the Indo-Pacific region, and then turn it to all of you for questions.
I will note, first off – and I think this is emblematic of the U.S. and DFC’s commitment to the Indo-Pacific region – it’s my first trip since the Development Finance Corporation became an entity, which just happened a week and a half ago when Congress passed the final appropriations bill. And, right away, we wanted to come to the Indo-Pacific, and that’s because the region is critically important to the United States and critically important from an investment perspective.
The origin of the Development Finance Corporation, and our prior origin, was an organization called OPIC, or the Overseas Private Investment Corporation. And what Congress recognized is the need to modernize the United States investment capabilities. They passed something about a year ago called the BUILD Act, and that started the process that became the Development Finance Corporation.
I went through a confirmation by Congress, and I know [there’s] a lot of back and forth and partisan politics that you read about in the United States. I will say that this was something that was non-partisan. I was confirmed unanimously and in record time. And the reason for that is that the idea of supporting global development is not a partisan concept, it’s an American concept, and it’s one that we are strongly committed to. And it’s emblematic, in terms of being unanimous.
The major differences that Congress and the President decided in modernizing OPIC is they’ve doubled the size of the agency. We went from $30 billion to $60 billion of investment. They’ve given the agency the ability to invest in equity projects, which is a third product to our portfolio. So, DFC offers risk-free insurance to private companies; financing, via loans, to private companies; and equity investment in private companies, as well as private investment firms. And so our goal is to drive private investment in emerging countries and companies to benefit global development. And so that was an important change.
We also have the ability to invest in technical assistance. Sometimes, when we work with countries – or in projects – they’re not ready yet for the private market, or to be bankable deals, and we do have the ability to now work to make those bankable deals and provide some technical assistance. So that was important.
The other thing is we have the ability to invest not only in United States businesses abroad, but also in each host country’s own businesses abroad. One of the most important aspects, I think, of the United States foreign policy is a strong, sovereign country. We’ve learned over time that our best ability to collaborate with countries is to look for open, competitive markets, rule of law, and transparency, and individual liberty. Those are important components.
You’ll notice I haven’t talked about strong U.S. influence, and that’s because our focus is on competitive, open markets. And so that – this ability to invest not only in U.S. companies abroad, but also in other companies that are not just U.S., is an important one, as we look forward.
Our commitment to the Indo-Pac – and we have a very strong history here and, obviously, the President’s plan for a strong and open and free Indo-Pacific Region falls into what we want. But you’ll see us very much activate in this area significantly.
We have been asked, hey, is this an alternative to others, from other countries? And at the end of the day, I do think one thing that I’ve noticed in my visits with every head of state has been they’ve been looking for the United States to step up and be a strong partner. And I do think we now will be that strong partner.
In this visit, I started out visiting our friends and allies in Japan – a very close relationship to the United States. I think you’ll see us investing together in emerging countries. I think Japan has a long history of supporting this region, and we will be partners together. In fact, I have some folks from Japan from their JBIC investment organization with me on this trip as a testament to our friendship and our mutual interest in a strong and free Indo-Pacific region.
I’m sitting here now in Hanoi, and I think that’s emblematic of our focus on a country like Vietnam, where you have a people that share, I think, many traits with Americans in being entrepreneurial, industrious, hardworking. I know that we have a massive amount of students that come from Vietnam to the United States and focus on education.
But this is a country where I sit now, where you have a strong growth rate and a strong commitment to competitive and free markets. And so, I think you’ll see us play significantly in this area as a friend of Vietnam. It’s amazing to me that it’s only been 25 years since normalized relations, and look how far we’ve come as countries.
I head off to Jakarta afterwards. Again, a country with fantastic potential – it already is a fantastic country, but significant potential going forward – where I’ll meet there with the president to talk about our partnership and potential to do a significant amount in Indonesia.
I know we have other very strong allies that we will be investing alongside. I think Singapore is a great example of a country and fund, with their sovereign wealth fund, that we’re looking at doing a lot together. So I think, again, we’re looking to do things with allies. I believe that our investment alongside allies is stronger than us alone, so we’ll be partnering significantly as we invest in this region.
I think you should look for multi-billion dollar commitments here in areas of interest. And that could span specific countries, but I think it spans industries, whether that’s energy, education, healthcare, technology, women’s investments. These are all huge focus areas for us, mainly because we’ve heard they’re huge focus areas for the countries that we’re looking at partnering and making investments in. So I’m very happy to be here, and I’ll turn it to you for questions.
Moderator: Thank you very much. We will now begin the question-and-answer portion of today’s call. Our first question will go to Dong Hyun Kim, who’s from the Voice of America Korea Service. Mr. Kim, please, go ahead.
Question: So DFC has been laying down plans for a major investment, specifically in getting out alternatives for Chinese 5G network equipment usage in the region. However, countries like South Korea has already been [inaudible] buying these products, making it costly to replace. How does DFC see its role in addressing such a dilemma?
And could you explain DFC’s role in the broader context on cooperation with South Korea in the Indo-Pacific region? Thank you, sir.
Mr. Boehler: Absolutely. So let me start on the 5G comment and weave in our partnership with Korea, with South Korea.
One, I think what’s important – and I think countries more and more are being thoughtful about their investment in 5G – and I think one of the important things is it’s not just about how cheap the equipment is in the immediate term. But if I’m a sovereign nation, my first question is how secure are those networks, and what is the cost to me and the threat, from a national security perspective, if those networks aren’t secure?
And I think you’re seeing folks realize some of the risks associated. Our job in the United States, or at DFC, is to identify alternatives. I don’t think it’s enough to just say don’t buy from one provider or another, but what are the alternatives?
Now, the advantage that we have with our allies is that we’re not tied to just saying one country and their products are the best, but we can choose the best across the world, because we’re not a state-owned enterprise, and we’re not focused only on what our country does. And whether that’s partnering with others, whether that’s in Japan, whether that’s in Sweden, in Norway, in the United States, in Israel, I think there’s some really fantastic emerging technology in this area that we can advocate for.
With respect to South Korea, obviously, we’ve had a fantastic relationship, the United States and South Korea, and we view the Koreans and the investment fund as fantastic partners in this region to make investments. And so I think that’s a very strong relationship, and we’d like to do even more together.
Moderator: Thank you very much. One question we received in advance – in fact, we received a couple versions of this – but an example was from the South China Morning Post, from Kinling Lo [who] was asking, “Is the DFC aiming to offer alternative funding for Indo-Pacific countries in order to compete with China’s Belt and Road Initiative?” Could you please comment on that question?
Mr. Boehler: I think that the DFC is not a response to one country or another. At the end of the day, I believe you have strength by playing your game, not somebody else’s game. And so I’m less concerned about what projects BRI and others do, and I’m more concerned with what we do.
And so I will say, though, as I mentioned in my opening comments, we have had repeated requests and it is the most common thread in every meeting where people say, “Hey, I may have taken capital, whether it’s from China or from others, and there may be certain risks associated with it, but we didn’t have an alternative here.” And so there is no question that DFC is meant to be a strong investment alternative for nations.
And again, I think what we represent versus other autocratic countries is a very significant focus on an individual country’s sovereignty and success. As I mentioned earlier, this is not about influence one way or the other, this is about a strong, sovereign country. So when I’m here in Vietnam, or I think about the Mekong region here, ultimately, we want a very strong, sovereign Vietnam and Mekong region that is self-sufficient and working together, and we will invest to achieve that. It’s not about U.S. influence there. And by the way, that’s why you see us working and open to working with partners who invest, like Japan, like South Korea, like the British, and others. And so I think that does represent a very significant difference from other choices out there.
Moderator: Thank you very much. One other question that we received was from Kentaro Shinagawa from NHK [in Fukuoka, Japan], and he was asking about: “Tensions between the U.S. and Iran have been escalating. How do you think this may impact the business and investment environment of the Indo-Pacific region, where many countries depend on oil producers in the Middle East?”
Mr. Boehler: Well, I think the President has been clear in this regard that the administration has taken decisive, but also preventative, action here. And so I’ll hearken back to those comments, and so I think taking action in a decisive and preventative way was a critically important action, and I think it lets us create a medium to long-term environment where we can focus on investing, and not focus on responding to terrorist attacks, like we were just a week or two ago.
Moderator: Okay. Thank you very much. We actually – if anyone has any questions – otherwise, we’ll be wrapping up in just a few minutes here. Stand by for just one moment here. Okay, we had a couple of people who went into the question-and-answer queue, and then dropped out. Just stand by.
Mr. Boehler: Sure.
Moderator: Okay. Well, I know that we’re getting close to the end of the time here, Mr. Boehler. If it’s [okay] – unless something pops up here in the next few seconds, I’ll just go ahead and ask if you could please go ahead and provide us some closing remarks and maybe just some further comments on your trip so far and what’s up ahead. Please, go ahead.
Mr. Boehler: Thank you. I mean, I would – sorry?
Moderator: No, I was saying, please go ahead.
Mr. Boehler: I would further emphasize that the $60 billion that we have is just representative of our capital. We catalyze private capital, so that represents hundreds of billions of dollars of potential in investment. And so my – I’d re-emphasize the point that we have a significant amount of capital. The Indo-Pacific region will be a strong focus of the United States going forward, and I would stay tuned for some very significant deals here. We’re open for business and you’ll see us be very active in this region.
Moderator: Thank you. Actually, Mr. Boehler, if it’s okay with you, we just got one more question in if you have just a minute. If that’s okay.
Mr. Boehler: Go for it.
Moderator: Okay, great. Next, if we could turn to Tommy Kurnia Rony from [Liputan6.com] in Jakarta, Indonesia. Tommy, please, go ahead.
Question: About DFC in Indonesia, do you have anything there?
Moderator: I don’t know if you could quite hear that, Mr. Boehler, but Tommy was just asking about what plans there may be for DFC and its work in Indonesia.
Mr. Boehler: So we head to Indonesia tomorrow, meeting with the president as well as many ministers. I will tell you, I think the opportunity for U.S. investment in Indonesia is fantastic, and so we’re going to have a lot of conversations. But I think Indonesia, obviously, is moving from a country that is focused on harvesting its resources to one that’s focused on services and other high-value-add areas, manufacturing services. And I think there can be a very strong partnership between the United States and Indonesia.
So I’m very much looking forward to the visit. I think it’s very important, and I think we are going to lay the groundwork for a lot of investment together. So I appreciate the welcome I know that I’ll get from Indonesia, but I think you may see a lot coming out between Indonesia and the United States in the coming months here.
Moderator: Excellent. Thank you very much. So that will conclude today’s call. Apologies, again, for the late start. I would like to very much thank Adam Boehler, CEO of the U.S. International Development Finance Corporation. And I also thank all of our journalists on the line for participating. Please, stay on the line for information regarding access to an audio recording of the call. Also, please be aware that a transcript of the call will be posted to our social media platforms and sent out to all of you within a day.
If you have any questions about today’s call, you may contact the Asia Pacific Media Hub at AsiaPacMedia@state.gov. Thank you very much.