Australia remains the dominant Pacific aid partner

Aid to the Pacific is increasingly concentrated among a few major partners, with Australia by far the largest. The United States has cemented a long-term commitment to the three Compact states, anchoring a deep but narrow footprint.

Aid flows to the Pacific continue to be predominantly delivered through bilateral channels, with country-to-country flows accounting for 70% of support to the region. Australia remains the Pacific’s largest development partner by a considerable margin, disbursing $1.5 billion in ODF to the region in 2024, accounting for 37% of all regional development flows (Figure 3).

The next-largest partners by share of total ODF were the Asian Development Bank (11%), New Zealand (11%), the World Bank (10%), the United States (8%), China (6%), Japan (3%), and EU Institutions (3%). Collectively, this group accounted for 90% of regional flows in 2024, with the remaining share spread across 36 smaller donors and multilaterals.

While support from Australia and New Zealand is spread widely across the region, other major partners have highly uneven country-level footprints. China provides no aid to Palau, the Marshall Islands, and Tuvalu, which maintain diplomatic relations with Taiwan, but ranks among the top three bilateral partners in Kiribati, the Federated States of Micronesia, Papua New Guinea, Solomon Islands, Tonga, and Vanuatu.

The United States delivers the bulk of its reported Pacific ODA through its strategically tied Compacts of Free Association (COFA). The three COFA states, the Federated States of Micronesia, Marshall Islands, and Palau, are the destination for more than 80% of US Pacific ODF support. When these flows are excluded, the United States ranks as only the ninth-largest Pacific ODF partner in total spending since 2008.

The 2024 US ODF figures here exclude one-off capitalisations of the Compact trust funds, which are not directly accessible to Pacific governments and translate into budget revenue through formula-based annual disbursements.^* The capitalisations represent a substantial long-term commitment. The renegotiated COFA agreements, enacted into US law in March 2024, commit roughly $7.1 billion in mandatory funding across the three Pacific states over 2024–43.^* This funding is codified in legislation, and forms part of a broader bilateral package combining development support with labour mobility and access to federal programs in exchange for exclusive US military access and influence over Compact-state foreign and security policy.^* No other Pacific partner provides a comparable multi-decade financing baseline.

Multilateral partners also vary substantially in country-level prominence, with the Asian Development Bank (ADB) and World Bank concentrated in the larger economies, and smaller specialist agencies playing outsized roles in some microstates. Funding from non-MDB partners narrowed considerably in 2024. Excluding the large roles played by the ADB and World Bank, multilateral grant support to the region fell to just $203 million in 2024, the lowest level in 15 years. Total spending by UN agencies fell to $56 million, 31% below 2018–19 levels. For the region’s smaller economies, which depend disproportionately on diversified multilateral grant financing, this contraction is particularly impactful.

A different picture emerges when multilateral spending in the Pacific is traced back to the donor countries that fund those institutions (Figure 4). This view combines bilateral official development assistance (ODA) with imputed multilateral ODA — an estimate of each donor’s share of what multilateral institutions spend in the Pacific. It applies each donor’s share of an institution’s core funding to that institution’s total Pacific disbursements. It spans major development banks, UN agencies, and global funds active in the region, capturing how donors also pursue development goals via core contributions to multilateral organisations rather than direct bilateral programs. Under this measure, Australia provides 47% of total bilateral and imputed multilateral flows, followed by New Zealand (14%), the United States (12%), China (10%), Japan (5%), Germany (2%), and Taiwan (2%), with smaller shares for South Korea, the United Kingdom, Canada, and France (each between