A signature effort of the Trump administration to bring more private sector capital and ingenuity into its global development efforts has unfortunately fallen victim to congressional gridlock. With another stopgap funding measure, the widely anticipated launch of the U.S. International Development Finance Corporation, or DFC, was stalled from its Oct. 1 deadline.
Experts from across sectors herald this new agency, which was created last year with bipartisan support in Congress and in close coordination with the Trump administration. Many agree it has real promise, thanks to its mandate to engage the private sector in U.S. global development efforts and the pipeline of promising investment opportunities on the horizon.
Catch up on US DFC
As the leader of PATH, a global health innovation organization, I am excited by the potential for the DFC to unlock capital for investments to improve the quality of life for billions and bring about sustainable economic development. I hope Congress and the administration will come together to provide the necessary resources and authorities to get the DFC launched.
That’s just the first step. Even now as the DFC leaders start laying the groundwork for an investment strategy, they should look toward health as a key priority.
Few areas offer as much opportunity as health. A healthy population is the foundation of a healthy economy. Nearly one-quarter of all economic growth is attributable to health system strength. Conversely, poor health is one of the greatest economic barriers in low- and middle-income countries. For example, malaria costs African countries up to $12 billion annually in lost productivity. Put frankly, healthy populations drive economic vitality. That’s why the U.S. government has made global health a key component of efforts to move countries along the “journey to self-reliance,” with the goal of reducing the need for foreign assistance.
By deploying new financing models — including much-needed blended finance options that combine public and philanthropic resources to mobilize private capital — the DFC has the power to bring in a range of new partners to advance health innovation.
To have the greatest impact — on saving and improving lives and on reducing the need for U.S. assistance — consider these best bets:
Digital health. Digital technology holds incredible promise for health: It offers new ways to increase access, improve health outcomes, and lower costs. It can yield data to help stop outbreaks before they reach a crisis level, accelerate life-or-death care decisions, and provide policymakers with data on where to spend limited resources. There is a clear need — and promising investment opportunity — in health data infrastructure. Investments in digital health help achieve better health outcomes and can also reduce costs.
Local innovation. Reaching the worst pockets of poverty and overcoming weaknesses in health systems will demand new technologies. In low-income countries around the world, innovators and entrepreneurs are designing new tools to meet local health needs that also carry relevance for the world. Though the pipeline of innovations is strong, a lack of access to capital and technical assistance frequently prevents ideas from coming to life. At PATH, we see this challenge firsthand in impact hubs we’ve started in South Africa and India to incubate products from “lab to market.” For example, we helped Sinapi Biomedical, a South African device manufacturer, advance a lifesaving tool to stop bleeding after childbirth. It has now been cleared for sale in markets in Africa and Europe. The DFC should explore opportunities to invest in specific new health tools as well as to assist local innovators in navigating the confusing, complicated path to bring a product to market.
Local manufacturing. Localization of production for health products — including drugs, vaccines, diagnostics, and devices — in lower-income countries can decrease costs, ensure adequate supply, and bring new capabilities and opportunities for local companies. For example, PATH developed the first vaccine designed specifically for use in Africa to protect against a deadly strain of meningitis that plagued the sub-Saharan region. By 2020, the vaccine is expected to have prevented 400 million cases of meningitis. Our partner on the vaccine, the Serum Institute of India, gained new capacity and expertise, allowing it to expand its vaccine production. Though the potential economic yield is great, manufacturing operations are capital-intensive, creating a high barrier to entry. Financing these investments through the DFC, paired with technical assistance to expand capabilities and quality, would have the dual impact of improving health and building critical infrastructure for a strong economy.
New tools, developed and scaled locally, can help bring health within reach for people around the world. This can also support countries that are recipients of U.S. assistance to grow into stronger economic partners. I hope Congress and the administration will come together to fully fund the DFC so it can begin this important work.