AidData quantifies trillions in U.S. trade, aid, and investment in Indo-Pacific, world’s largest economic region

New data and analysis tracks over a decade’s worth of U.S. government and private sector engagement across 46 Indo-Pacific economies.

February 8, 2024
Sarina Patterson
Photo by Kalyakan via Adobe Stock, used under Standard license.

Photo by Kalyakan via Adobe Stock, used under Standard license.

Williamsburg, VA—AidData, an international development research lab at William & Mary’s Global Research Institute, today released new data and analysis that quantifies the economic value of U.S. engagement across 46 economies in the Indo-Pacific. It finds that U.S. trade, aid, remittances, and foreign direct investment totaled $24.5 trillion and grew by 18% from 2012 to 2022.

The dataset and accompanying policy brief provide a clearer and more holistic picture of U.S. engagement in the region. “There is, of course, a high volume of economic activities focused on large and populous economies in the region. But strikingly it is small island economies in the Pacific that attracted outsized engagement on a per capita basis, as a revealed priority for the U.S.,” said Samantha Custer, Director of Policy Analysis at AidData. 

The research builds on AidData’s track record of quantifying international development finance and analyzing aid distribution and impact. One of AidData’s unique strengths visible in this research is in triangulating and synthesizing multiple, disparate data sources to surface new insights into how economies cooperate to advance shared interests. This value addition is particularly important in the Indo-Pacific, Custer argued, where “we see the U.S. adapting its toolkit, from one-directional aid to a greater emphasis on bilateral trade and investment as the region’s economies have grown dramatically over the last two decades.”    

Stretching from India to New Zealand and encompassing the interconnected Indian and Pacific Oceans, the Indo-Pacific is home to around 60% of the global population and responsible for nearly two-thirds of global GDP growth, as well as over half of global carbon emissions. The world’s three largest economies—the U.S., China, and Japan—have extensive Pacific coastlines, and  policies on trade, climate, and security in this consequential region will have global effects. 

U.S. companies have turned increasingly to the Indo-Pacific region as major trading partners. “The importance of trade is reflected in engagement from both the U.S. government and the private sector,” noted Custer. Imports totaled $13 trillion and foreign direct investment totaled $11 trillion over the period. “The steepest increase of any type of economic engagement in the dataset was in the category “investment guarantees,” which are intended to reduce the barriers to investments in emerging markets. 2022 saw funding levels that were 22 times higher than a decade prior, with the most significant growth coming in 2021 and 2022,” said Custer.

“Aid and trade don’t tell the whole story, however,” said Divya Mathew, Senior Policy Specialist at AidData. “Financing and programming from U.S. private philanthropies to the Indo-Pacific was up 66% over a decade. This engagement is particularly notable in the health sector, where private philanthropies added $4 billion to $10 billion from U.S. bilateral and multilateral assistance.” 

Since last year, an AidData team has worked to quantify the value of U.S. economic engagement in the Indo-Pacific, through a first-of-its-kind analysis funded by the U.S. Department of State. Combining extensive data sources—from USAID, the OECD’s Creditor Reporting Service, the U.S. Development Finance Corporation, the World Bank Group, the U.S. Census Bureau, and the U.S. Bureau of Economic Analysis—the researchers approximated the value of U.S. imports, foreign direct investment, remittances, private philanthropy, bilateral development assistance, aid channeled through multilateral institutions, and investment support through the U.S. Development Finance Corporation (DFC) and the Multilateral Investment Guarantee Agency (MIGA). 

Today, AidData is releasing the dataset underlying the policy brief, letting users break down over 12,000 financial flows by type, country, year, and other features such as sector (for aid) and whether imports were technology-related. To our knowledge, this is the only dataset that brings together both U.S. public sector and private sector finance into a complete picture for the Indo-Pacific region, including trade, investment guarantees, and aid via multilateral and bilateral channels. AidData researchers also calculated or imputed U.S. government contributions to multilateral organizations using a published methodology, which can be disaggregated by simplified sector, year and country.

While the Indo-Pacific and the U.S. have a long track record of partnership across various public- and private-sector channels, the U.S. government’s evolution from aid provider to investment partner is notable. “Our data makes it easier to follow the different types of economic engagement, which highlight the increasing potential of economies in the Indo-Pacific region to attract private sector capital at scale as more sustainable sources of revenue,” said Bryan Burgess, Senior Policy Specialist at AidData. “Over the last decade, we see the U.S. government doubling down on financing channeled via the Development Finance Corporation and Multilateral Investment Guarantee Agency of the World Bank, to help Indo-Pacific economies unlock access to international private investment,” Burgess added.

“AidData’s policy analysis team looks forward to collaborating with local partners to analyze economic engagements and other tools of development cooperation from the U.S., China, and other countries, as we seek to build awareness and capacity to monitor and analyze trends in the Indo-Pacific,” said Custer. 

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Sarina Patterson is AidData's Communications Manager.