Robert Mosbacher, CEO of the Overseas Private Investment Corporation (OPIC) was recently here at T-bird. This quote caught my intention:
"Give a man or woman a fish, feed them for a day. Teach them to fish, feed them for a life time. Well, at OPIC, we're not in the give them a fish business. That's USAID or the UN or international relief agencies. We're not even in the teach them to fish business. That's USAID and others. We're really in the invest in the fishing industry business. If you think about where you're ultimately going to have the greatest impact. You know feeding somebody for a day is great. Feeding that person for a lifetime is great. But if you can help employ 20 or 30 people and feed all of them because they now have a job, it has a much greater impact on people."
And kind of fishing business is OPIC seeking to invest in? CAFTA is their biggest issue and it's no surprise that OPIC is willing to invest up to $120 million in private equity investments in Central America since that is a long-standing core part of their activities. But in a hugely exciting development, their other core focus is on "stimulating primary mortgage markets" so that ordinary citizens can buy homes without having to pay for them outright.
Mosbacher cited Hernando DeSoto's influence on this issue. The fact that DeSoto, a Peruvian economist known for his books "The Other Path" and "Mystery of Capital" is now heavily influencing the US government's policies in Central America can not be understated ... this is huge! Asked the question of what can we do about Central America, he replied, "I see no downside to strengthening the economies of these [Central American] countries as much as possible."
At another point, Mosbacher pointed out that a huge portion of Panama's balance of payments could be attributed to remittances. By establishing primary mortgage markets, ordinary people in countries like Panama could invest in a house instead of hiding that cash under a mattress. Here in the US, few own their homes outright. And what do you do in California or New York if you want to start your own business? You borrow $$ either thru unsecured lending (i.e. credit cards) or thru secured loans (i.e. 2nd mortgage). Well, unsecured lending isn't going to be commonplace (at least not above the table) in most of the world for a while. And up until now, 90% of the world does not have a mortgage market like we do in the states. But, as Hernando DeSoto has been long been hoping for, that is going to change.
"Give a man or woman a fish, feed them for a day. Teach them to fish, feed them for a life time. Well, at OPIC, we're not in the give them a fish business. That's USAID or the UN or international relief agencies. We're not even in the teach them to fish business. That's USAID and others. We're really in the invest in the fishing industry business. If you think about where you're ultimately going to have the greatest impact. You know feeding somebody for a day is great. Feeding that person for a lifetime is great. But if you can help employ 20 or 30 people and feed all of them because they now have a job, it has a much greater impact on people."
And kind of fishing business is OPIC seeking to invest in? CAFTA is their biggest issue and it's no surprise that OPIC is willing to invest up to $120 million in private equity investments in Central America since that is a long-standing core part of their activities. But in a hugely exciting development, their other core focus is on "stimulating primary mortgage markets" so that ordinary citizens can buy homes without having to pay for them outright.
Mosbacher cited Hernando DeSoto's influence on this issue. The fact that DeSoto, a Peruvian economist known for his books "The Other Path" and "Mystery of Capital" is now heavily influencing the US government's policies in Central America can not be understated ... this is huge! Asked the question of what can we do about Central America, he replied, "I see no downside to strengthening the economies of these [Central American] countries as much as possible."
At another point, Mosbacher pointed out that a huge portion of Panama's balance of payments could be attributed to remittances. By establishing primary mortgage markets, ordinary people in countries like Panama could invest in a house instead of hiding that cash under a mattress. Here in the US, few own their homes outright. And what do you do in California or New York if you want to start your own business? You borrow $$ either thru unsecured lending (i.e. credit cards) or thru secured loans (i.e. 2nd mortgage). Well, unsecured lending isn't going to be commonplace (at least not above the table) in most of the world for a while. And up until now, 90% of the world does not have a mortgage market like we do in the states. But, as Hernando DeSoto has been long been hoping for, that is going to change.
Comments
I get the impresion from OPIC (not from you) that what they do is better then the giving of fish, and the teaching of fishing. Infact, a lot of do-good organizations, including churches, (and including me) often define what they do, over and against something else. I don't like that. What OPIC does is good, but useless, to those that are starving now. And what the UN does is often good, but probably dosen't do enough for the future.
Both/And not Either/Or