The debate over the reauthorization of the Export-Import Bank of the United States tends to focus on big business and American workers: To opponents it represents "crony capitalism" and "corporate welfare," supporters point to the American jobs and tax dollars it seeds.
But there's another way to think about it: Ex-Im, as small as it is, represents an excellent vehicle for advancing America's foreign policy interests.
When Ex-Im Bank's reauthorization again comes to a vote, which could happen in the House of Representatives as soon as Monday, the people of southern Tanzania probably won't factor into the debate. But there, near the coastline of the Indian Ocean in East Africa, exists a perfect case study of why the bank must be reauthorized.
If Congress lets the Export-Import Bank die, it gives up an important form of American influence.
My firm, Symbion Power, is not a large one. We are an American electricity generation company headquartered in Washington, D.C, but operating primarily in sub-Saharan Africa, with a total head count of less than 200. But we're hoping to have an outsized impact on the lives of people there; our development projects could literally bring electricity into the homes of millions of people.
Southern Tanzania has no connection to the country's national power grid; the entire region is severely underdeveloped. Until very recently, Tanzanians there had no hope of ever getting what we in America take for granted: lights and power. But, working in a partnership with Tanzania's power utility, we're developing a project to electrify the entire southern part of the country through a new 600-megawatt power plant and a long, 550-kilometer transmission line.
Here's where Ex-Im comes in: In order for this project to move forward, Symbion must raise hundreds of millions of dollars in funding. It's not easy to do that for a project in the developing world, and since Ex-Im's shutdown in July of this year, the bank has been prohibited from accepting new loan applications. If the bank's reauthorization hadn't been allowed to lapse by Congress, Symbion would have already submitted its application to Ex-Im in order to facilitate the financing of equipment and materials for the project.
Working with Ex-Im is a win-win solution that allows us to buy American-made equipment for what might sound like a remote overseas project, while also improving standards in the region in which we operate. Ex-Im's requirements for lending and diligence are rigorous.
In addition, Ex-Im Bank, as well as other U.S. government agencies, has anti-corruption policies and controls that set the standard for these type of loan facilities. And just jumping its hurdles helps firms like ours: Seeking and then obtaining funding from Ex-Im through its exhaustive application process is seen worldwide as a highly prized symbol of credibility.
So what happens without the Ex-Im Bank? Opponents of the bank's reauthorization must understand that in a global economy there are many options at our disposal for financing. It should therefore come as no surprise that since the bank's lapse in reauthorization, Symbion has been receiving proposals from other countries' export credit agencies and from suppliers who propose equipment manufactured in other countries, backed by their own ex-im banks. The list includes China, France and Canada, among others.
Without Ex-Im Bank, other countries' agencies are stepping up. America's competitors aren't sleeping!
In the constant battle to provide financing for projects around the world, America's competitors aren't sleeping. We're an American company, but if we take that financing from another country's ex-im bank, it comes with one big condition: The power plant and transmission line equipment will be manufactured outside the United States. Shuttering the Ex-Im Bank would be, as one Washington hand put it to me, "tantamount to unilateral disarmament."
At a time when America's foreign policy faces a multitude of challenges, we sometimes neglect one of our country's greatest advantages: America's soft power capability. I remember the day in 2013 when we celebrated the completion of several electrification projects to hundreds of villages in Northwestern Tanzania. We were working with the U.S. government's Millennium Challenge Corp., founded by President George W. Bush. When we visited those villages the day the power was switched on, there were colorful scenes of what can only be described as unbridled elation. We were greeted there by thousands of Tanzanians, who spent the day singing, dancing and waving American and Tanzanian flags, one in each hand.
In addition to my role with Symbion, I serve as the chairman of the Corporate Council on Africa, our country's preeminent investment and trade association focusing on commercial partnerships between the United States and Africa on the African continent. I've traveled to many countries in sub-Saharan Africa, and I've spoken with the highest-ranking government officials and to those who represent civil society groups. All of them see the lapsing of Ex-Im as a sign that the United States is abandoning the continent. Despite all the talk about China and other competitors making incursions into Africa, most of the African leaders want to work with the U.S. government and the American private sector and, contrary to popular belief, not necessarily with our global competitors. But given their urgent need for power and development, though, it is hard to blame these countries for resorting to collaborations with other nations and their export-finance banks.
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Africa is one continent where we still have considerable goodwill. But people in Africa are puzzled by conflicting messages emanating out of Washington about Africa's value to the United States; on one hand, they applaud the bipartisan tenor in Congress toward efforts to increase electricity access throughout sub-Saharan Africa. But on the other hand, African officials sense a partial American withdrawal with the disappearance of our Ex-Im Bank. The debate that has been raging over the bank is framed around American business, but it's more than a business proposition: It has global consequences for America's reputation, and there might be long-lasting reputational damage to the United States if the bank is not reauthorized soon.
Paul Hinks is the CEO of Symbion Power. His article was first published by Politico.
