Dr. Maura O’Neill – Chief Innovation Officer & Sr. Counselor, USAID

Thank you very much.  I’m delighted to be here.  I hope that you were inspired as much as I was yesterday with the depth and breadth of the conversation and a number of us were talking about the Secretary’s speech and particularly the notion that it’s really all about getting along, and if we could figure out how to do that in a deep and more respectful way.  But I know we are excited at AID and welcome to the Ronald Reagan building and to the Second Annual Global Diaspora Forum – Day Two.

We are particularly excited—and I don’t want to go over everything we did yesterday, but we believe not only in America and the world that great ideas come from all different places and the ability to match-up my expertise, my perspective with yours, with somebody else’s—that’s where in fact the magic happens.  In fact, we did some analysis that says there are over 215 million international people living in countries other than their country of origin.  So there’s a lot of diaspora’s out there—not just in our country but in others.  And collectively, if those 215 million people were a country, they’d be the fifth largest in the world just above Indonesia and just behind Brazil.  So you can imagine in an interconnected world and a Facebook, Twitter, internet world the ability and the power of mobilizing those 215 million people that have domain knowledge, cultural knowledge, financial acumen about what we can do.

Here in America, all of you represent diverse and rich diaspora communities that continue to be the number one destination for immigrants.  And as a country, we continue to hope and aspire to be a place that is the number one place that people want to go to and we hope that you will participate in helping us as Americans realize that dream.

What makes you unique is the mark you are making to America.  It’s new start-ups.  It’s scientific inventions.  It’s establishing new businesses.  It was a great delight for me yesterday to meet the range of people that are here today and I hope that you had that chance.  We’ll have lots of opportunities.  I hope that you will continue to seek out this morning one or two or five or six people that you’ve never met before, exchange cards, exchange conversations, understand—because you never know, maybe you don’t know today, this moment, where you might actually have an opportunity to do some business or to do some philanthropy or to do some community service.  But in fact, what’s made my life rich is realizing—fast forward three years or five years later, there’s somebody I met in a context like that that all of a sudden they have identified that I could be helpful to them or I’ve identified an opportunity where we might work together.  So we hope that you will think about that.

But we don’t want you to stop here.  We want you to continue to maintain those ties as you go forward.  And if there’s ways in which the state global partnerships, Tomas and Romi and our staff can help facilitate that, if there are ways in which we can make that networking and that interaction more helpful, please do, because I hope that you have appreciated the awesome amount of staff work that’s gone into this and the smart and effective way in which both the State Department and AID are committed to this kind of interaction.

As most of you know, we operate in 80 countries.  We oversee 100 countries and to say that’s a dynamic portfolio—I don’t have to remind you that that is.  So, we hope that as Ben Rhodes said yesterday that you also volunteer your intelligence, your knowledge—particularly during times of conflict or during times of complications to the extent that you can be helpful in either disaster relief or conflict that would be great. 

But we’d also like to imagine with you new ways in which we can reimagine development.  One that I’ll talk about before I get the great pleasure of introducing my boss, Administrator Shah, is mobile phones and mobile money.  As you know, there are five billion phones, and there’s no technology that has so transformed the developing world more quickly than mobile phones, but as I like to say, we have yet to realize the full development potential of mobile phones. 

We have mobile phones, but we can’t always get them charged.  We can’t always do as effectively things, whether it’s health or ag or finance.  So, we thought that with there’s 500,000 banking branches in the world, 5 billion phones, think about the potential if you took that individual cell phone and you made it into a cash register or a point of sales system for an entrepreneur or you made it the vehicle for health information or a branchless bank. 

So, we believe that mobile banking is a game changer in development, and we think the Diaspora communities in particular can play a critical role.  So, we’ve identified six or eight countries in the world that we think if you align the things are relatively aligned that if we lean into it, we could actually flip the needle. 

We did that in Haiti the month after the earthquake.  We realized that they had a very weak banking system that many of which had been destroyed in the earthquake.  So, we got together with the mobile operators with the central banks, with the regular banks, with American Red Cross, who would use that text system to raise $40 million in the aftermath of the earthquake.  We said, how could we stand up a system that allowed more Haitians to have access to financial services, to be able to store money, to be able to transfer money, and I’m happy to note that a month ago, we were there celebrating the five millionth transaction of mobile money in Haiti. 

So, we know in the Philippines, it’s been a great new development, and we are particularly excited to figure out how we could take remittances with just four times the amount of official development assistance and how can that actually help families, but how can that help communities as well.  So, one of the things we have is Development Innovation Venture Fund that is really attracting lots of great ideas from all over the world.  One of them we funded was somebody in Michigan who had an idea to work with the Filipino Diaspora in Italy to try and be able to transfer remittances directly to pay school fees in the Philippines.

So, I don’t know about you, but we actually send money overseas, in our case, to Uganda, to a family and have been doing it for a lot of years.  It’s difficult to get it there.  We don’t quite know if it actually makes it there or makes it in the amount that we get.  It’s very episodic in which the money can get there, and the other thing is we don’t know always how the money is used, and that’s not saying anything about our family members that live in the Uganda.  It’s just the complication of the world in which we live. 

So, this idea was well how about if we connected schools directly to the mobile money network so a Diaspora community could actually pay the school fees directly and also give some money to their family as well.  So, that’s an idea.  We think that you probably have many more ideas that could be exciting for us so that we hope that you’ll think about them and that you will discuss with us and that we will cook up these new things that we think will be transformational either in entrepreneurship, in development or in freedom and democracy for the countries of our origins that we care so much about. 

So, is the Administrator here yet?  He isn’t.  So, he is going to show up any minute.  So, why don’t I just break there and I would love to get any questions that you have about either USAID, Diaspora communities and most of all, I come here as much to listen as to talk. 

So, if you could give me any feedback to AID, we’d like to see you do this or we’re excited about you’re doing that.  I know it’s 9:30 in the morning and you may have only been on your first cup of coffee, but as I tell people in audiences, I’m not opposed to actually calling on people.  If you could tell us your name and where you’re from, that would be great.

<Q>

(Can’t hear question; speaker not miked)

My name is ... with Long National Development.  As you can see, we have an office in Minnesota also.  So, we’re at the local level and also the national level and just starting to think about ... and connecting the Diaspora and funding not only knowledge but donations to open .... 

Also, ... minority ... political history with the countries as well as are at the bottom in terms of socioeconomic status ... in America.  So, we’re really struggling to figure out how to navigate the political arena as well as the interethnic religion in each country, and I think particularly it’s been challenging because we’ve been trying to first go into Thailand but USAID has stopped prioritizing Thailand as a country of need, but for a moment—so, for a moment, for other hill tribes, indigenous folks across Southeast Asia, even in Thailand, they remain significantly in poverty.  So, I guess my question in terms of working with USAID is if there’s a country where it’s not prioritizing more in terms of AID, how do we build some public private partnerships to be innovative to create that sort of change?

Dr. Maura O’Neill – Chief Innovation Officer & Sr. Counselor, USAID

Well, I think also inherent in your question is something that we’re beginning to think about is often some of these issues go across countries and AID is either in Washington and we have bureaus or we actually have country programs.  So, the issue is Diaspora, as you say, often go across many countries and how do you create that cross boundary kinds of relationships.  So, we’ll follow up with you and talk about it. 

Often, it isn’t a black and white issue.  Sometimes there are countries we really aren't involved in, can’t be involved in, and there are other countries such as Thailand where we have a regional platform for Asia in Bangkok and so there may be some opportunities particularly if we do things with you in Thailand and in other countries as part of that long network.  So, why don’t you see me or see Romi at the break, and let’s figure out how to follow up?  Other questions?  Yes?

<Q>

Thank you.  Thanks for coming this morning and being with us.  Appreciate it.  My name is Sytana Carrie.  I’m from organization called Erasing Borders, which is a global organization of Afghanistan, Pakistan and Indian Diaspora.  Our goal is to promote sustainable peace in that part of the world, and we have been in existence about a year and we have 2,500 people, professionals signed up from all over the world so far as volunteers.  My question is—can you talk a little more about that innovation development fund, what kind of programs they support, how it works, how could one access that program?

Dr. Maura O’Neill – Chief Innovation Officer & Sr. Counselor, USAID

So, the question was tell us a little bit more about the Development Innovation Venture Fund.  We patterned this after two different things, venture capitalists or drug discovery.  Those are both places that in the U.S. were famous for innovating again and again and again. 

How do they do it?  They do stage financing.  Make a lot of small bets.  See actually what works.  If something is working, they double down and they continue to do in that direction until they scale. 

So, we developed something that is available to all people in the world.  It can be Americans but it can be non-Americans.  It can be headquartered in the U.S. or it can be someplace else, but we care about two things. 

We care about scale.  We are really not looking at the village level.  We’re looking over time how is this going to impact millions, and the second thing is how is this sustainable over the long term without continued U.S. government support because that’s not sustainable over the long term. 

So, we have an open call.  We can give you the link to it where 365 days of the year you could submit an idea.  It’s a five-page concept paper, and every quarter, we sweep those and we decide which ideas that we’re going to invest in. 

There’s stage one financing, which is the proof of concept, but even at that phase, you have to say that it is going to be scaled to millions over time.  That's what you have to convince us.  That’s 100,000. 

The stage two is build to scale and rigorously evaluate up to about a million.  Stage three is you do it throughout an entire country and you start in three other countries.  So, we have had 1,200 ideas submitted that way.  We’ve made about 30 investments so far, and in the next 60 days, you’ll see the next round coming out.  So, I encourage you all to look at that. 

Well, it is now my great pleasure to introduce somebody that I’ve known personally and professionally for a long time.  He usually tugs me and says make it short, make it sweet, just tell my name, but he’s going to have to indulge us for about 30 seconds or a minute and say that when the president called Shah at the time and said, undersecretary, and said I’d like you to take on this responsibility, he understood the awesomeness of this and the both ability to change the face of America and people around the world in terms of economic prosperity, in terms of their livelihood, in terms of their life and their health and their freedom. 

So, he took it with much honor and much humility and I have to say it has been just an enormous pleasure to have him as our leader.  I hope that you have watched a new AID emerge from an unbelievably talented staff that we have worldwide who are reinvigorated and excited about a bold new future for development and for public private partnerships.  So, with that, I hope that you will join me in a very warm welcome to Administrator Shah of USAID.

Rajiv Shah – Administrator, USAID

Good morning.  Thank you for being here bright and early.  It is excellent to see such an engaged group. 

Thank you, Maura.  I’m very proud of what Maura has accomplished as our Chief Innovation Officer and as the leader for our Innovative Partnerships Group we call IdEA.  I also want to thank Romi Bhatia.  I know you’ve seen and worked with Romi through the year and we’ll be hearing from him in more detail later today.  But Romi, why don’t you put your hand up in case there are folks who don’t know you? 

Of course, everyone knows Chris Balderson.  Chris is our guiding light on this subject and is responsible for the Secretary’s global Diaspora forum.  I also want to thank other members from the interagency, Mimi and others who are here who really do enrich the quality of what we’re able to do together as a community. 

It is an incredible honor to be here and to be here with so many members of Diaspora communities from around this country and around the world.  I’m one of you, and so, I’m pleased to be able to join.  In fact, joining you last year and hearing about the businesses you’ve started, the volunteer programs you’ve supported, the innovations you’ve generated and the resources and inspiration that you’ve offered to your original home communities was one of my more personal and inspiring moments of the year.  So, thank you for allowing me to participate. 

Today, more than 62 million Americans, a full fifth of this nation are first or second generation Diaspora community members.  That undoubtedly is what makes our country great.  We all collectively represent a vast and diverse community, and we do so much both here and with our home communities and the countries from which we came that we’re excited to now have the opportunity to partner more deeply together to improve on the results we can accomplish when we do work together. 

In 2010 alone, remittances from our communities in the United States to developing countries were $95 billion, three times the U.S. official development assistance.  Global remittances are now nearly at about 400, $372 billion, growing 12% over 2010.  In fact, in this role, I have the opportunity to work in what we call hotspot countries, countries that are going through deep crises, and we always sit together in the National Security Council and we hear these reports from the Treasury Department and others about the balance of payment situation in country after countries, countries that look like they would lose the confidence of the international financial community or maybe even experience significant capital flight from countries. 

So, the conversation usually says there’s been a large-scale political upheaval in a certain place.  I won’t name the particular nations.  We then worry a lot about balance of payment crises or country reserves being dramatically depleted.  We brace ourselves and expect the worst.  The IMF issues all kinds of dire warnings, and then, six months after the fact, we look back and we say well, why didn’t things really fall apart, and the answer time and time again through this last decade has been increased remittance income. 

That’s not a public flow of cash or commitment.  As you all know, those remittances increase in those moments because many of you make the determination that it’s precisely in those moments of crisis, of peril, of danger, that you have an opportunity to step in and provide even more comfort and stability to the communities that nurtured you and gave you the opportunity to be here.  So, it is a sense of pride, but I also think we tend to talk a little too much about remittances because it makes it seem like what Diaspora communities are good for are dollars or in the case of my family, dollars converted into rupees.  The reality is we know that that’s just a very small part of the way we think about engaging with home countries and communities. 

Many of you are role models for your families and your extended families.  Many of you have become beacons of hope and aspiration for young people in the communities from which you came, and nearly all of you are connectors, helping educational opportunities and institutions connect to young kids who are smart and seeking those opportunities, helping businesses and financial institutions connect more directly with home communities and working to support entrepreneurship here and abroad.  So, I hope as we work together going forward, we talk about remittances with a sense of deep pride but also talk about what we do with our communities back home in a manner that’s broader and more comprehensive because that’s more representative of what this is all about. 

In the past couple of years, we’ve worked hard to change the way we work at USAID to be better partners, to be more innovative and at the cutting edge of ideas and technology and to focus more completely on delivering results in communities where we work.  We call this reform agenda USAID Forward, and I really do believe that now that we’re in the midst of it, we are better suited to part with Diaspora communities in the United States for the purpose of supporting efforts abroad than we ever have been. 

I had the honor of spending time with the Somali-American community outside of Minneapolis a few times during the last year and during the devastating and tragic drought that led to a famine which led to nearly 35,000 children under the age of 5 actually perishing because they didn’t have enough food to eat and they suffered from the consequences of malnutrition and disease.  I was struck by a number of stories along the way, but most notably, I was struck by the fact that 200 young Somali-Americans and their supporters walked from Minneapolis to St. Paul to raise awareness about the famine.  I was struck by the efforts of the community there to work with banks to allow for remittances to flow despite difficulties with respect to OFAC licensing. 

I was struck by some of those community members who actually flew to Somalia, worked with local institutions and NGOs and did all kinds of things to help get aid out to people.  I was struck by our own partnerships with organizations like the American Refugee Committee that did extraordinarily effective work.  Taken together, all of those efforts undoubtedly saved hundreds of thousands of lives.  It’s often the story of loss and suffering is easier to tell than the story of humanity and saving lives and giving people opportunity in the face of darkness, but what that community did in partnership with humanitarian actors like USAID and around the world was really a shining example of what’s possible when we work together. 

I recently came back from Yemen where I had the opportunity to similarly visit communities that had actually just been through a military engagement with Al-Qaida and had expelled Al-Qaida from the south of Yemen.  We walked to a local government office surrounded by schools and health clinics that had either been destroyed or even worse had been mined because the terrorists know that when people come back to their communities that’s where they will congregate first.  So, they literally placed bombs in many of these settings.  Today, we’re working together with the Yemen-American community but also with our partners in Yemen to help not only raise funds but demine schools, demine health clinics, make sure that there’s a capacity for those communities to return and rebuild peaceful and more prosperous livelihoods. 

In Pakistan, we signed an MOU with the American Pakistan Foundation.  Pakistan was in fact one of the countries I was referring to and I mentioned that we worry about its overall macroeconomic fiscal situation and I’m constantly surprised by the strength of the Diaspora communities that step in on behalf of the Pakistani economy one household and one family at a time. 

These kinds of partnerships are emblematic of what we can do if we start working more closely together.  We hope to build on these relationships and you’ll hear through the course of today about the global development alliances that we have created with many of your Diaspora communities and our aspirations to grow and build more of those types of partnerships.  You’ll hear about our innovative Development Credit Authority, which now works with local banks including two Ethiopian banks to encourage them to lend to members of the Ethiopian Diaspora who are willing to launch small or medium sized businesses with ties in Ethiopia.  That type of creative application of resources can generate real growth.  In that particular effort, we’ve had 23 businesses that have received nearly $4.5 million in loans and the borrowers don’t even have to move back to Ethiopia, but they’re creating jobs and economic activity in that country. 

Today, I’m pleased to announce two new engagements.  We’re working with Gravitas Capital Advisors to expand an exciting platform that facilitates investment in development projects around the world.  Founded by Eric Guichard, who I believe is here today—Eric, are you here?  Maybe he’ll be here later today, a Ghanaian American who wanted to expand opportunities for Diaspora individuals to pool their capital and support projects back home.  So far, more than a thousand individuals with an average of only about $25,000 each have participated each year.  We’re now adding 50 to 100 investors, new investors, every month.  That kind of model of pooling what we might call in this country angel or early stage venture capital to support entrepreneurship abroad is one of the best forms of connecting American entrepreneurship and values of risk taking and aspiration with the knowledge and creativity and connections that you bring as a Diaspora community. 

We’re also working with the African Development Bank to support the Migration and Development Fund and help ensure that hard-earned money doesn’t get lost in high transfer costs.  In fact, as you all know, transfers for remittances and other forms can be as high as 12% or 15% in terms of the costs that are taken away from those precious resource flows, but in Latin America thanks to a lot of work with the partnership with the Inter-American Development Bank, they’re now lower than 5% and we believe we can work around the world to help achieve that goal.  It’s in fact a goal that the G20 group of leader countries have set together of decreasing transfer costs in Africa by 5% in five years, which would lead to an increased savings for receivers of $2.5 billion a year.  It’s those types of creative partnerships that can really create change at scale and do it in a way where the results will be observable and felt one household, one family at a time. 

So, I want to thank you for the opportunity to be with you.  My compass for this work is my dad because at the end of the day, it was my dad who helped me understand that remittances aren't just flows of income you send back home.  They’re a personal commitment to where you came from, and they’re, in many sense, the reason you’re here or the reason he was here.  It was also my dad that helped me understand that every one of his extended family members, and I think I’m still going through life trying to track them all down, there are like 50, 60 people in multiple different cities, have reached out to him seeking opportunities for education, for migration, for jobs, for opportunity, for capital to start businesses; for ideas and for connections. 

And I’ve always felt that if we could use USAID in some small way to help people like my father, who did put a lot of effort and energy into trying to be responsive to the opportunities that came to him.  He was like a one-man, mini development agency with no staff and no resources, actually, but he managed to try anyway.  If we could do that just a little bit, then we could really help change the world for the better.

One of the things that makes this country great is the fact that there are 62 million of us.  And the fact that so long as we’re the country where people aspire to come to succeed, we’ll be the greatest country in the world.  And so long as we connect that success back to where we came, that’s the embodiment of our humanity and our commitment to ourselves. 

So thank you.  We’ll keep working.  We’ll try to get better.  We’ll work in partnership. We hope today results in more of those partnerships.  But please know that our commitment is sincere and we really do want to create the better world by working more closely with all of us.  Thank you very much.  Bye.

Dr. Maura O’Neill – Chief Innovation Officer & Sr. Counselor, USAID

Thank you.  You can see what a tremendous inspiration he is to everybody associated with USAID, so thanks.  What he didn’t tell you is that while his father was the one man development agency, he was also full-time working for decades at Ford Motor Company.  So it’s really an amazing inspiration.  So thank you, Raj.

Our next speaker is also an inspiration.  Mimi Alemayehou is from OPIC, the Overseas Private Investment Corporation.  The president appointed her in 2010 to be the executive vice president and we’re so thrilled to have her leadership at OPIC.  She, prior to heading or being the EVP of OPIC, she was the United States executive director at the African Development Bank, where she was responsible for executing the board decisions on behalf of the U.S. government.  She served as the most senior U.S. treasury official in Africa, and was instrumental in pushing reforms.  She was born in Ethiopia, grew up in Nairobi, and is too, as our administrator…, one of the diaspora that we are thrilled to have as part of our leadership.  So please join me in welcoming Mimi.

Mimi Alemayehou – Executive Vice President, OPIC

Good morning, everyone.  Thank you.  It’s great to be here with all of you today at the Second Annual Diaspora Conference.  I also had the pleasure of being at last year’s event.  And as Mora said, as a member of the Diaspora myself, I’m quite passionate about all the discussions that will take place today.

I think a few years ago the word diaspora tended to be sort of applied in the context of cultural or political connection, and I’m really happy that the last several years, however, have increasingly put diaspora and economic growth in the same sentence.  I think several studies by the World Bank, McKenzie and others have documented the dramatic contributions of remittances by members of the Diaspora to their countries of origin.

The Diaspora do so much more than just send money home, as Dr. Shah just stated, even though I myself sent money home to my grandmother until a couple of years ago.  Today’s topic is, therefore, particularly timely.  From my standpoint, this has been very interesting for OPIC, the Overseas Private Investment Corporation, where the Diaspora are increasingly becoming our important client base.

A little background on OPIC, for those of you not familiar with the institution.  OPIC is the U.S. government’s development finance institution.  It has been around for about 40 years.  We provide loans, guarantees and risk mitigation products like political risk insurance to companies, entrepreneurs, NGO’s that pioneer investment in developing nations. 

OPIC focuses working with U.S. entities, but this can mean a U.S. citizen or even a permanent resident who’s a green card holder.  Today we have about 15 billion in exposure in about 100 countries; evenly spread across regions of the world.  We take pride in being very nimble, flexible and ready to take risks that commercial banks won’t, and developing with our clients the kind of creative and accommodating structures that investing in frontier markets require.

By the way, Dr. Shah is actually on our board, so he also gives us direction on the kinds of stuff that we should be doing. 

At the same time, we believe in taking prudent risks.  That’s why our portfolio continues to be profitable and we turn in a profit to the U.S. Treasury every year.  And in more than 40 years of OPIC’s history, we’re very proud to say that we’ve written off less than 1.5% of lending and less than 0.7% of our insurance exposure.

I think I would be in trouble with my boss or CEO Elizabeth Littlefield if I didn’t say OPIC is self-sustaining, and we do good while making money.  How about that? 

We are, of course, firm believers in the power of the diaspora.  I mean, you didn’t have to convince me that.  We put funds on the line to back that up.  We have worked with Diaspora entrepreneurs like yourself all over the world.  We have seen how pivotal your work can be for your home countries, just as it has been valuable to the U.S. economy.  I think the value is illustrated by the fact that U.S. Hispanics control one trillion dollars in purchasing power in the United States.  That’s pretty powerful.

I think there are a few reasons why the Diaspora entrepreneurs are becoming an important class of investors and important partners for us at OPIC.  First, I think they have a much better understanding of the risk assessment capability of their country, which makes them less risk averse through the opportunities that appear kind of risky to the average investor.  Time and time again, across sectors and across regions, we have seen Diaspora entrepreneurs to be among the first investors into a country after a conflict or a recession or difficult period, creating confidence and a demonstration effect that attracts others to follow their lead.

Soon after the Arab Spring, the first entrepreneurs that were knocking the doors at OPIC were the Tunisian Americans or Egyptian Americans that were really bullish on their new economies opening up, and they wanted to do something way before the dust settled while other investors waited.

Second, their personal I think attachment and commitment to their country of origin makes them into investors with a much longer-term outlook, which often is very critical, particularly when you’re making long-term investments in infrastructure. And entrepreneurs we find investing in their home country are usually very hands-on.  You engage your investments on a very personal level, you make long-term commitments; you bring knowledge and expertise home.  You, the Diaspora, tend to draw very deeply on your knowledge of local markets and needs.  You invest also in local talent.  You’re savvy about credit and country risks.

My own brother moved back to Ethiopia a few years ago.  Something I never imagined would happen.  It took him about five years to get a broadcasting license from the Ethiopian government, but he did not pack up and move after the first few rejections, because he had a very long-term outlook and connection to the country.  Not to mention, he’s quite a stubborn guy.

And third is, I think once the investment has been made, the Diaspora investors also have a much easier time developing the local relationship and reflexes that I think are quite essential to making a long-term success of the investment. 

And the fourth reason I think is in situation when also the project faces great difficulties, the Diaspora investors generally show greater tenacity and resilience.  The bottom line is, if you’re an investor, as we are at OPIC, investing alongside a Diaspora entrepreneur will increase our comfort level before we even sign the check.

That is why when we were approached by the State Department, we were more than willing to carve out $150 million for qualifying winners of the business competition for the Diaspora-led investment in Latin America and the Caribbean.  One hundred million will be for the Idea Program, with the IDB and other important partners; $50 billion has already been committed through CIM, the Caribbean IdEA Marketplace.  And I had the pleasure of being in Jamaica, of all destinations to go to, with Chris Balderson for the official launch of the CIM event. 

For OPIC there is no such thing as a typical Diaspora-drive project.  We don’t have preconceived notions about size, sector or region.  We’re open to working with big companies, small businesses, individuals and even NGO’s.  Last year, OPIC’s board signed off on two impact investment funds led by Mexican Americans.  One will invest growing capital in SME’s in Mexico and others led by Roy Souza of MPower provides financial services to … people in countries across the region.  

In Afghanistan, OPIC has approved $68 million in financing, partnered with $10 million grants from USAID to Afghan Growth Finance, a financial institution led by Afghan American members of the Diaspora.  This financing will allow Afghan growth to extend loans to SMEs in Afghanistan, which account for more than 80% of economic activity in this country and is a leading provider of jobs for Afghans.

In Ghana, OPIC approved $250 million in political risk insurance to a Miami-based company Bell Star Development, which was established in 2006, by a member of the Ghanaian Diaspora, to provide medical equipment services and infrastructure to benefit up to 100 hospitals throughout the 10 administrative cities in Ghana.

In India, OPIC is providing $41 million in financing to a California-based company Azura Power, led by an Indian American entrepreneur to build a 3 megawatt solar power plant in the Indian states of Punjab, Gujarat and Rajasthan.   It will power about 4,000 rural homes.

So in Central America as well, OPIC has approved $25 million in financing to enable a Miami-based financial services holding company Lafise Group, led by a member of the Nicaraguan Diaspora to expand its lending to small and medium-sized enterprises in Costa Rica, Honduras and Panama.  OPIC has partnered with Lafise on other projects enabling it to expand its portfolio of low and middle income residential mortgages to qualified borrowers in several Central American countries, and has committed a total of $107 million in financing since 2003.

So in fact, we have Diaspora projects in every single region of the world: Asia, Africa, the Middle East, Central and Central Europe and Latin America.  But I am confident we can do even better.  Beyond allocating capital, we can take concrete steps to increase the diversity, scale and impact of Diaspora entrepreneurs.  At OPIC, we believe the most promising scenarios are where an entrepreneur aims as a private investor are in sync with the country’s broader development agenda.  And I think that’s what Dr. Shah was also trying to point out. 

We don’t have an infinite amount of resources, so when we evaluate a proposal, we’re looking for factors above and beyond commercial viability and regulatory compliance.  We ask: Will this project have a positive impact on the country’s development?   Will it, for example, be located in a post-conflict country, where job creation is an urgent need?  Will it address critical need, such as water or healthcare?  We ask whether a project can be scaled up or replicated.  I know Maura O’Neill asks those same questions as chief innovation office of USAID.  One can literally find millions of small, worthwhile local projects.  But the most efficient use of our capital is to find projects that can be scaled up or transplanted. 

We want projects designed for long-term growth.  We ask whether a project will aim to address a global public good, such as the environment.  We provide clean renewable energy, will it address biodiversity?  Those are just some of the questions that we tend to ask.

If you are  a Diaspora entrepreneur and can answer yes to one or more of those questions, you will find that OPIC and other development finance institutions as well will take a very close look at your proposal.

Let me say in closing that I don’t think there’s ever been a better time to be a Diaspora entrepreneur.  I recently returned from a trip to four countries in Africa led by the White House Deputy National Security Advisor Mike Frohman, and in each of the four countries that we visited, we met with entrepreneurs involved in a variety of businesses.  And a large number of them were educated right here in the U.S., spent many years working here.  Some are naturalized U.S. citizens and have gone back to their country of origin to take advantage of the tremendous growth opportunity that Africa now provides for the private sector.  These companies are employing thousands of people, bringing new technologies and having an incredible impact on the ground.

In 2010, global foreign direct investment into developed nations outweighed foreign direct investment into developed countries for the first time ever. This represented over a trillion dollars of investment.  This trend is not changing any time soon.  There is an enormous, I think, opportunity for Diaspora entrepreneurs right now.  There is an enormous opportunity also for development right now, and we hope to succeed on both fronts.  So OPIC applauds this initiative moving forward by giving back.  We stand ready to partner with the Diaspora community, and we have every confidence our partnership will grow in the coming years.  Thank you.

Dr. Maura O’Neill – Chief Innovation Officer & Sr. Counselor, USAID

 Mimi agreed to take a few questions.  So does anybody have a few questions or comments or thoughts for her?  Yes, right here?

<Q>

Good morning.  Thank you, Dr. O’Neill.   My name is Marlen Hill.  I’m an attorney in Miami from the Island of Jamaica and representing the Caribbean Diaspora here; the home of the fastest human in the world. 

Dr. Maura O’Neill – Chief Innovation Officer & Sr. Counselor, USAID

 Diaspora’s excel at all sorts of things, right? 

<Q>

Mr. Batraten from Oshoki yesterday said something to me that spoke volumes to me about connecting the kids and the Diaspora.  I can only speak from my own story coming here at the age of 14.  Are we investing in any initiatives or programs that would connect American Diaspora kids with kids in their home countries at any level, whether through the Department of Education or Young Entrepreneurs or anything of that sort?

Mimi Alemayehou – Executive Vice President, OPIC

 I’ll just answer from the point of OPIC.  OPIC works with the private sector, so the CIM initiative that we supported, the $50 million, is to support the Diaspora businesses that are actually investing in the Caribbean, that actually meet OPIC requirements.  But in terms of actual exchange of students, I’m not aware of USAID or other government agencies that may be present here.  Is there anyone from the Department of Education in the audience?

Dr. Maura O’Neill – Chief Innovation Officer & Sr. Counselor, USAID

Maybe Thomas from the Department of State, I know you have some cultural exchanges.  Here.

Man

The Bureau of Education of Cultural Affairs at the State Department does exchange programs, especially sports and cultural related. I’m not sure there has been one that specifies that Diaspora community is going to the home countries, but that’s something that we can explore more and see if there are opportunities for that.  But I’m not aware right now that there is a program specifically targeting Diaspora.

Dr. Maura O’Neill – Chief Innovation Officer & Sr. Counselor, USAID

 But it’s a fantastic idea and we will, we have a new youth policy at USAID, and we are investing in and creating ideas to engage the youth in the countries.  So the notion that you’ve brought up, which is great, which is how can we connect it to youth Diaspora in this country is a terrific idea.  So, remember I said at the beginning that we came here to listen and to learn as much as to share, so that’s a great idea.  Next question. 

<Q>

Thank you for your remarks.  Samuel Minsuri, entrepreneur of Precision Learning and also part of the Secretary’s Generation Change Initiative, and part of the Egyptian American Diaspora.  So you guys have the fastest person but we built the pyramids.  So.  Just kidding.

But that said, my question comes down on a more serious note. You mentioned the Arab Spring and in the wake of the Arab Spring the Tunisia Americans, Egyptian Americans came forward and said what can we do to invest, even before the dust settled.  Obviously there’s concern currently with the political situation in Egypt and in much of the Middle East and the direction that things will head, whether or not it will head towards something that’s a little bit more palatable for us as  Americans or not.  Have you seen a shift in that drive and that interest?  I’m saying that because we have, as a community we have seen a shift in the drive and interest to invest back home, if you will.  And at the same time, how do our political and strategic interests impact our desire to invest as well as an American community, as an organization for yourself as well, if you get my question.  It’s a bit of a tricky one.

Mimi Alemayehou – Executive Vice President, OPIC

Yes, it is.  I think I get your question.  I mean, soon after the Arab Spring, it was obviously sort of a lot of support and OPIC actually announced a $2 billion commitment for the region; $1 billion specific commitment to sort of to Egypt.  Since then we have seen a bit of a slowdown. There were quite a lot of private equity funds that we actually supported that were investing in the region that were having a hard time, as you can imagine, fundraising equity in that region that was changing daily.  But I think the commitment for the long-term is there and OPIC is looking at a couple of things in our pipeline and we hope to continue with that. 

<Q>

(Can’t hear question; speaker not miked)

Mimi Alemayehou – Executive Vice President, OPIC

You’re talking more in sort of NGO participation or enabling environment to try to increase more investment in the region?  I think we work in concert with sort of our inter-agency team, both at State and Commerce that works on the commercial law aspect and USTR and other agencies that are involved.  So I think there should be a way for you to get engaged with the State Department programs. 

<Q>

Good morning, ladies and gentlemen.  My name is Rosemary Saguaro.  My business …non-profit.  How do you look at women in Africa, especially the women like new entrepreneurs.   Women have very wonderful innovation ideas, but they are never considered to be entrepreneurs.  They are always left.  If I came to you with a man, you would look at the man first and say let me take the innovation from a woman and I’ve got good ideas.  Like now I’m starting a …in Kenya.  I’m missing middle…  How do I collaborate with the USAID, with OPIC, without those strings and …where I come from, but I’m here.  And I want to work with women, but in Kenya it’s tough and other African countries, small and medium enterprises.  How can I get investment and funding in what we do?  Thank you.

Mimi Alemayehou – Executive Vice President, OPIC

Thank you for that question.  And ….  Some of the ways that OPIC where we’ve tried to get sort of banks to lend more to women or to SME’s is by structuring our guarantee products to encourage banks to lend to women.  But instead of like 75/25, making it a little bit more better for them so that they can be encouraged to lend more to women or even lend to agriculture industries, so we’ve done things like that.  But I agree with you, even in this day and age, and not just in Kenya, but even right here, women entrepreneurs lack access to finance.  I think that’s a problem that’s a global one.  I mean, I was at the African Development Bank on the board, I was the only woman on the board of that institution and there was only like one other woman in the senior management position, so I think that’s a global phenomenon.  But I think since the Secretary became the Secretary of State, she has done an amazing amount of work to try to get more women engaged in the economies of their countries.

Dr. Maura O’Neill – Chief Innovation Officer & Sr. Counselor, USAID

 Let me just add on the women entrepreneur, that’s a focus of USAID’s and we have somebody who’s a senior coordinator for women’s empowerment and gender of quality.  I’m thrilled to meet another woman entrepreneur.  I’ve built four companies, so I know exactly what Mimi’s talking about in terms of what the reality is of going to banks or going to venture capitalists or going to partners and not being taken seriously.  So we’d love to follow up with you and we can put you in contact with our mission in Kenya.  And as I said, in Africa and around the world, women’s entrepreneurship is something that is a key priority of the USAID’s.

<Q>

My name is Amelia …. And I’m the president and the CEO of the American Nigerian International Chamber of Commerce.  We are the only one.  We’re based out of Atlanta and work with our embassy here.

Just wanted to know, with OPIC, I know you all have funded quite a few of our projects in Nigeria and very big ones, but I wanted to ask you, how does the State Department sanction?  On their website it says for investors to be careful going to Nigeria.  That makes our job very, very difficult.  So I’m wondering if that influences any of your decisions, because I know that’s an uphill battle for us when we have quite a few investors that want to come to Nigeria and we have to go in and let them know now it’s okay, it’s quite alright.  We’ll have to lead a delegation there to let them know that nothing really is going on.  So I wanted to know how you combat that.

Mimi Alemayehou – Executive Vice President, OPIC

 Thanks for that question. The State Department is on our board, I’m the secretary; Hormatz is on the board of OPIC.  But I think what you’re referring to is not a sanction, I think it’s a travel advisory to a particular region of Nigeria.  And just to say, I mean, OPIC to a large degree we’re very demand driven, so we go where our clients want us to go.  Believe it or not, Nigeria is our largest exposure in sub-Saharan Africa.  We have the most investments in our books in Nigeria.  That’s because a lot of people are still kind of bullish on the Nigerian economy and what it has to offer.  It’s an important economy, an important partner for the United States, and I think it’s going to continue to play that role.

Having said that, one of the reasons why also Nigeria is our largest sort of exposure on our books is because of the Nigerian American Diaspora.  One of the largest investments we made in Nigeria for Union Bank of Nigeria was alongside a Nigerian American investing in the recapitalization of Union Bank of Nigeria.  So I think the diaspora that are here in the United States, Nigerian Americans were very well educated, professionals, are starting to make long-term investments in their country of origin and they’re becoming a very important partner for us.

<Q>

Maura, here’s an offer for you.  I am ….have been doing innovation for the last 30 years.  My offer.  It took us 80 years to perfect a public/private community partnership for ….  We would like to have a platform that we can share.  What will it take us to create such a partnership, economically, socially, politically, institutionally, professionally, ecologically, technologically….

Dr. Maura O’Neill – Chief Innovation Officer & Sr. Counselor, USAID

 We just had a minute to talk yesterday, but I’ll take you up on your offer, because we have lots to learn in that area, so we’d love to sit down with you and a few people at USAID and get the benefit of your wisdom.  So thank you very much.  How about to this middle table, we have three people here.  Why don’t you pass the mike?  Oh, in the back, too.  Why don’t we take all three of these questions and then we’ll have Mimi respond or if one of them is for me, I’ll chime in.

<Q>

Great.  Thank you for hosting this.  It’s my first day here.  I wasn’t able to make yesterday, but heard wonderful things.  I’m going to be… I belong to a very tiny diaspora, but we’re proud and we’re loud, and we call it the Batina Diaspora.  Pakistani, Indian, Mexican, Latina Mexican, American Diaspora.  So we’re small in numbers, but mighty.

I run an international development agency here in Washington, D.C. called Humanitas Global Development.  I formed it about four years ago.  In development, but even in business support, and as an administration, Sean, both of you have commented, it’s more than just a financial transaction.  So Mimi, I’d love to hear your thoughts, but also, Maura, your thoughts on this as well.

Is there a way and how are you mobilizing additional resources and support – not just financial – of diaspora communities here in the United States to support entrepreneurship and business development abroad?  As you know, you can have a great idea, but it doesn’t mean that you’re great at everything.  So things like marketing assistance, business management, leadership skills, are you mobilizing communities that have that expertise here in the U.S. that can align with the work that you guys are doing?

Dr. Maura O’Neill – Chief Innovation Officer & Sr. Counselor, USAID

 Okay, we’ll take those other two questions at that table and then we’ll try and answer all of them, and then we’ll head on to the back.

<Q>

…American Association and I believe I’m the only Yemini in the room.  Poverty, unemployment fuel terrorism.  In Yemen, we have more than 60% unemployment and poverty is as high as 75%.  USAID has been specifically targeted and military aid, but nothing else on job creation or increase in unemployment.  Is there any plan or is that …going to continue, because what it does is it just again continues to fuel terrorism in the area.

<Q>

…Jahani from the AgaCon Development Network.  Great forum.  Thank you very much for doing this.  But I want to raise a little red flag, which came to my mind following the intervention from our friends from Egypt, which is that Diaspora giving started off very much as a charity.  When Rajiv talks about his father being a one man development agency, many of our fathers and grandfathers have done similar sort of things, and the impulse was charity.  And I think that while I’m all for business and sustainability and creating the rights for investment opportunities, there’s a lot that’s out there in development like social movements, which are inherently, unlikely …to be financially viable.  And I wanted to hear what the Diaspora giving idea will do for those sorts of support programs that we’ve got and how do we support them so that we don’t make sure that the social development, which we all want to see in these countries, is not jeopardized?

Dr. Maura O’Neill – Chief Innovation Officer & Sr. Counselor, USAID

 Thank you very much.  Mimi, why don’t you start and then I’ll finish.

Mimi Alemayehou – Executive Vice President, OPIC

Sure.  The earlier question in terms of what we may be doing in engaging with the Diaspora community on both sides, I must tell you that we’re a tiny agency.  We’re all based here, right here in Washington.  We don’t even have any offices outside of Washington, so we do depend a lot on other agencies like State, USAID and Commerce to work with us.  And we only work with the private sector, so that also limits us, and NGO’s and individuals, but that limits us to how much we get involved in terms of the policy, the enabling environment and other dynamics that actually make our business successful.  So in terms of your question, we’re sort of limited to what we do.  But I know the Commerce Department under Secretary Sanchez, was testifying yesterday saying they’re starting a new outreach program to Diaspora communities throughout the United States, because we all tend to be based in Washington, so sometimes these conferences and events that we do, in terms of outreach to the community, happen to take place here and not necessarily in the communities where a large diaspora groups, the Somali’s…were just talking with Maura and for some reason they’re in Minnesota ,the Somali population and the Haitians in Haiti.  But we’re trying to do outreach to business communities in California and other places, and reach as many of the Diaspora just to give them an opportunity about, from our perspective, more about the business opportunity that exists in these countries that are being driven by the Diaspora.

I think as a U.S. government agency, we’re not selling anything and us talking about our track record of investing in emerging markets alongside the Diaspora in a profitable way can attract not just the Diaspora, I don’t think the Diaspora can do everything and solve the development challenges that exist in these countries.  They have to be supplemented by official development assistance, by other foreign direct investment.  But I think the Diaspora also have a very important role to play, and I think the gentleman was alluding to that.  You can’t just solve the Diaspora through, remittances cannot be the only solution.  I think we all kind of have to work together.

Dr. Maura O’Neill – Chief Innovation Officer & Sr. Counselor, USAID

 Let me just say a few comments.  I think that for too long we have focused on entrepreneurship on just financing and credit, and that is necessary but not sufficient, whether it’s marketing, whether it’s business skills, whether it’s a whole lot of operational skills in addition to credit.  So while we are enormously proud of the kinds of track record of OPIC, of our development credit authority, we have recognized in the near-term that we need to think about entrepreneurship in a broader way and we need to develop that capability, not just an enabling environment, how quickly can you get a business license in a country, but that kind of matchup of skill sets that you need in order to really thrive and grow your entrepreneurship opportunities beyond your friends and family operation.

So in conjunction with the State’s global entrepreneurship program, we have begun to build that in certain countries.  If there’s a way in which we can partner with your Diaspora to think about how do we build that capability, there’s also best-in-class organizations like Endeavor and Acumen and others who we are partnering with to grow those. But we would love to follow-up.

With Yemen, you’re absolutely right.  Youth unemployment at the end of the day is the number one source of instability in countries around the world.  We actually are interested and can follow up with you in ways that we are looking deeply at that issue, but also you may have some ideas about what we should be doing.

With respect to my dear friend at AgaCon Foundation, you’re absolutely right.  Oftentimes there’s a number of conditions on social development that need to be put in place alongside or in advance of robust investment return opportunities.  So we are looking at while remittance is not the end all, be all, we do believe that that provides an opportunity to actually have conversations about community projects.

We also think that charity ought to look at the long-term, how is the government going to step up and provide these services.  And so what we don’t want to do is get some of these countries believing that the international donor community is just going to fund this for the indefinite future.  Gap financing in order to get their tax collections or their commitment to that is fine, but we want to look at this as a long-term and say how can we be the seed capital for social development, but long-term that community stands on its feet in terms of that.

I’m actually told I need to end, but I will get kicked in the shins if I don’t have somebody from the back.  So let’s take one more question from the back.  We’re going to break in just a second and we’ve built in a long break.  So if you didn’t get a chance to talk or share with us, please grab us during the break.

<Q>

I’ll be quick.  My name is Adeh Asis.  I’m with the Coalition of African Arab Asian…movements in Chicago.

Dr. Maura O’Neill – Chief Innovation Officer & Sr. Counselor, USAID

 This is so cool to see this melting pot of different Diaspora’s.

<Q>

Yes, I work with 150 Diaspora donor groups and individuals in Chicago.  I’m glad to hear that there are a lot of opportunities for initial staging or scaling up for Diaspora groups.  But my question is, are there also opportunities for capacity building, for helping the Diaspora donor groups that are not there yet, because that’s the reality of the Diaspora groups I work with on the ground, on the grassroots.   Are there opportunities or resources or shared learning or platforms where we can bring them up to that level of scale that you wanted them to be?

Dr. Maura O’Neill – Chief Innovation Officer & Sr. Counselor, USAID

 So I’d say why doesn’t, Romi, why don’t you follow up with him at the break.  I’d say the one challenge we have is we actually are, all of our investments are focused overseas and so we sometimes have limited ability to build capacity of the sort you’re talking about in Diaspora communities in the U.S.  But I suspect if we get creative, we could figure it out.  

But in any event, I hope that you found this morning incredibly stimulating and interesting, and I’m so thrilled we had an opportunity to begin this conversation and this two way dialogue.  I appreciate administrator Shah coming and I hope that you appreciated his words today.  Mimi, thank you very much.  And since this is my last time at the podium today, I just want to say from the bottom of my heart what an incredible partner the global partnerships’ group has been at State.  It is my great honor to cohost this with Chris Balderson and his lead team, Thomas Debas, and we hope you’ll enjoy and meet at least two or three people at the next break that you didn’t know before you came here.  So please join me in thanking this morning’s speakers.