How do the State Department and other U.S. development agencies help promote American businesses abroad and support jobs at home? To highlight the link, USGLC published a new report, America’s Global Economic Leadership: A Strategic Return on U.S. Investment, making the business case for strategic investments in diplomacy and development.
U.S. Global Economic Leadership Matters
Today, America’s economic prosperity depends on our ability to export goods and services. From 1965 to 2015, exports as a share of our economy have more than doubled, making up nearly 13 percent of U.S. GDP and supporting almost 12 million jobs in the United States. With 95% of the world’s consumers living outside our borders, it is clear that America’s global economic engagement is essential to our continued prosperity and that it generates a return on investment by making U.S. businesses more competitive and by building new markets to promote sustained economic growth.
Leveling the Playing Field for American Companies
Over the past few decades, America’s share of the global market has declined as our competitors have fiercely challenged the U.S. economy. In Africa, China has already surpassed the United States as the continent’s largest trading partner and increased its official development assistance by more than 780% since 2003. Recognizing China’s growing influence in the global economy, Speaker Paul Ryan (R-WI) recently said, “We are more determined than ever to lead. We don’t want China to write the rules of the 21st century global economy. We want to do that.”
Strategic investments in America’s foreign assistance programs have helped level the playing field for American companies, enhancing their competitiveness by thwarting the unfair practices of foreign companies and governments, and generated significant economic return for the United States. For example, the Overseas Private Investment Corporation has leveraged more than $200 billion of American private investment since its founding, generating $80 billion in U.S. exports and supporting more than 280,000 jobs.
More Markets for American Goods and Services
With half of U.S. exports now going to developing countries, they represent tremendous economic opportunities for American companies. For example, U.S. goods exports to sub-Saharan Africa increased by 75 percent between 2005 and 2015, supporting more than 100,000 American jobs. As Secretary of Commerce Wilbur Ross said, “I believe that the more African nations partner with U.S. businesses, the better off both the United States and Africa will be … Our trade relationship is vital to the security and stability of both the United States and Africa.”
Additionally, America’s investment in development and diplomacy programs play a critical role in strengthening rule of law, and supporting reforms that create an enabling environment for private sector investment. For example, USAID’s investment of $30 million to help Vietnam improve its business regulatory environment helped increase U.S. goods exports from $460 million in 2001 to over $10 billion in 2016, more than 2000 percent increase.
Simply put, America’s development and diplomacy programs – funded by the International Affairs Budget – are critical to America’s economic future.
Over the next week, USGLC will publish a series of blogs to highlight the link between our development and diplomacy programs and America’s economic prosperity. Join the discussion on Twitter with #Americaleads, and read USGLC’s new economic brief.