OPIC, Not OPEC

Insurance against revolution

The inviting ad shows coral reefs, blue water and the green-carpeted Caribbean island of St. Lucia. But the advertiser is not an airline seeking to entice vacation travelers. It is an obscure federal agency, the Overseas Private Investment Corp., drumming up business for the political-risk insurance it sells to U.S. firms that operate in the Third World. OPIC is a bright star in Washington at a time when many departments are in eclipse. Says OPIC President Craig Nalen: “We are a real Administration success story.”

Nalen, 52, had never heard of the eleven-year-old agency before being asked to head it in 1981. A former president of STP Corp., which makes automotive products, Nalen launched a study to see what people thought of OPIC and found that it was largely unknown. Nalen launched a feverish promotion campaign to tell audiences that OPIC encourages American companies to make investments in developing countries by offering insurance against war, revolution, expropriation and the inability to convert local currencies back into dollars. OPIC made a record $76.2 million profit in 1981, while issuing $1.5 billion of insurance. It will come close to doubling that level of coverage this year.

While OPIC has never lost money, it has paid off some hefty insurance claims. OPIC paid $316 million to ITT, Anaconda and 13 other U.S. firms whose property was expropriated in 1971 by Chile’s Salvador Allende, but expects to recover the bulk of that from the present Chilean government. Firms driven out of Iran in 1979 have received an additional $14.5 million from OPIC, whose total liability to them could reach $40 million.

To help companies set up shop in the Third World, OPIC shares the costs of feasibility studies, makes and guarantees loans and sponsors foreign tours. Barco International Inc., an Ohio-based agribusiness firm, discovered the largest pig herds in Southeast Asia on a trip to Thailand in July and plans to build a slaughterhouse there. After the same trip, Hawaiian Holiday Macadamia Nut Co. decided to invest $9 million there to grow cashews and macadamia nuts and to produce chocolate candy.

U.S. labor leaders argue that the agency exports American jobs overseas, even though OPIC contends that it is a creator of employment by encouraging U.S. exports. null biggest problem, though, might be confusion with that other organization. Said one Haitian businessman: “OPIC? OPEC? I thought it was the oil cartel, but we soon learned they weren’t throwing money around like the Arabs.”