President Joe Biden has been clear about expanding the prior administration’s efforts to counter the Chinese Communist Party (CCP), and with good reason. As the first-ever head of the U.S. International Development Finance Corporation (DFC) from 2019-2021—America’s $60 billion development bank—I saw firsthand how developing countries enter into one-sided agreements with China when they believe there is no better option.
For example, in health care, even Chinese officials admit that their COVID-19 vaccines are limited in their effectiveness. Fortunately, American private sector ingenuity, particularly our health care companies, is proving to be a strong asset for U.S. foreign policy as it strengthens and stabilizes developing nations.
When Congress created the DFC in 2018 with high levels of bipartisan support, it tasked the new agency with catalyzing private sector investment to (i) provide economic assistance to developing countries, (ii) provide a return to the U.S. taxpayer, and (iii) advance U.S. foreign policy. The DFC helps nations create the conditions that generate sustainable growth and investment, such as infrastructure, free and fair markets, and transparent business environments where the rule of law is respected.
At the DFC, under the Global Health and Prosperity Initiative, we are investing up to $2 billion to support private sector investment in global health resilience. Through the Abraham Fund, we initiated the mobilization of more than $3 billion in private sector funds to support the Middle East’s economic development as part of the Abraham Accords. Last January, as part of the W-GDP 2x Women’s Initiative, we announced a commitment to mobilize $1 billion of investment to advance women’s economic empowerment in Asia.
While government tools are important, the private sector is a more powerful force for peace and prosperity than any government agency, even a $60 billion one like the DFC. The trillions of private dollars ready to be invested in global infrastructure projects alone far surpasses even Beijing’s $2.5 trillion Belt and Road Initiative. This is where the United States shines the most—there is no comparison to our private sector. Our companies innovate solutions far faster than other government bureaucracies. Unlike many state-run companies in authoritarian nations, American firms hire local workers and compete fairly. By engaging in a spirit of partnership and helping human beings live better lives, American companies are the United States’ most important ambassadors.
The stage is now set for health care companies to assume greater prominence. The COVID-19 pandemic accelerated innovation in the health technology space –America has clearly taken the lead in vaccine production thanks to the performance of companies like Pfizer, Moderna, and Johnson & Johnson, who were able to produce new vaccines with unprecedented quickness under Operation Warp Speed.
The ripple effects of the medical innovations triggered by the pandemic will continue across multiple subsectors of the health care industry. Digital health startups have already attracted $14.7 billion in funding in the first half of 2021, more than they did in the entirety of 2020. Through June of this year, new public health care companies added $100 billion in market cap. Companies not traditionally associated with health care—like Amazon, Apple, and Wal-Mart—are now pushing further into the sector.
This explosion of health care innovation and the potential for companies to scale innovation worldwide in sectors like genomics, vaccines, and women’s health, can be a wind at the United States back in the great power competition with China. When American companies introduce products and procedures that improve health outcomes and save lives in developing countries, patients and leaders can clearly see the good that happens when American companies are involved. American health care companies that launch investments in new international markets and develop durable partnerships catalyze the free enterprise-driven model of economic growth that is far superior to state-led approaches in ensuring economic freedom and sustainable growth.
As global competition with China intensifies, American leadership in the 21st century demands private sector-led development strategies that cause America’s historic humanitarian commitments to shine brighter than ever. Our health care companies are poised to develop solutions that will save lives, help countries develop, and remind the world of the uniqueness of America’s private sector.
• Adam Boehler is the Founder and CEO of the health care investment firm Rubicon Founders and is a board member at the Atlantic Council. Adam was the first CEO of the U.S. International Development Finance Corporation (DFC), the Deputy Administrator of CMS, and the Director of CMS’ Center for Medicare and Medicaid Innovation (CMMI).