Erin Collinson, Director of Policy Outreach at the Center for Global Development (CGD), testified before the House Foreign Affairs Subcommittee on East Asia and the Pacific on March 11, 2025, regarding the reauthorization of the U.S. Development Finance Corporation (DFC). In her testimony, Collinson made four key recommendations for lawmakers:
Reauthorize DFC Promptly: Collinson urged Congress to reauthorize DFC promptly to prevent disruptions in its operations. A timely reauthorization is crucial to maintaining the market confidence and operational certainty needed for DFC to continue its financing work. She emphasized the importance of a multi-year reauthorization and increasing DFC’s liability cap to accommodate future growth.
Maintain a Strong Development Focus: Collinson recommended that DFC prioritize investments in lower-income countries, where access to private capital is scarce and the development impact of DFC’s financing is most needed. While the agency could have flexibility in working with middle-income countries, it should avoid crowding out private capital in advanced economies.
Encourage Transparency and Accountability Improvements: Collinson highlighted DFC’s progress in transparency, noting its compliance with the Foreign Aid Transparency and Accountability Act. She suggested further improvements, such as merging the two existing datasets and providing more detailed development impact information at the project level, including narrative explanations to accompany data.
Recognize DFC as Part of a Broader U.S. Development Toolkit: Collinson cautioned against overburdening DFC with too many directives without corresponding increases in resources. While DFC plays a vital role in U.S. development and foreign policy, it should not be seen as the only tool. She emphasized the importance of coordinating with other U.S. agencies, such as USAID, and noted that dismantling USAID’s operations would make DFC’s job more challenging.
Collinson concluded by urging Congress to advance the reauthorization of DFC, reinforcing its development mandate, promoting transparency, and ensuring it is seen as a critical part of the broader U.S. development and foreign policy efforts.
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