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Dhaka Tribune

Who is slashing development aid?

  • Many donor countries are reducing foreign aid budgets
  • Trump suspended most US foreign aid programs
Update : 15 Mar 2025, 03:34 PM

Whether due to new political priorities, budgetary pressures or chaos around the world, one big donor country after another has announced cuts in development aid over the past months.

The cuts are a source of concern for NGOs and international organizations that help regions in need.

Trump swings axe

Upon returning to the White House, Donald Trump ordered a suspension of US foreign aid.

After a six-week review, Secretary of State Marco Rubio said on Monday that the United States was cancelling 83% of programs at USAID, the US Agency for International Development.

He said "tens of billions of dollars" would be saved.

USAID, set up in 1961, had an annual budget of $42.8 billion and used to account for 42% of the humanitarian aid spent around the world.

The United States was by far the biggest donor country in 2023 in absolute terms. It had previously doubled the amount of its public development aid over 10 years, according to data from the Organization for Economic Cooperation and Development (OECD).

Europe too

In February, British Prime Minister Keir Starmer ordered cuts to UK overseas aid in order to boost defence spending.

He ordered the overseas development budget to be cut from 0.5% of GDP to 0.3% by 2027.

The French government decided in February to create a committee to evaluate public development aid.

And the final text of France's 2025 budget slashes two billion euros of public development aid.

In Germany, the second-biggest development aid donor behind the United States, a cut of more than 900 million euros from the ministry charged with development aid was planned in the 2025 budget drawn up by the outgoing coalition.

The subject has not yet been discussed in the negotiations forming the new conservative-and-centre-left- coalition, but likely next chancellor Friedrich Merz has pledged unprecedented -- and costly -- investment on defence and the economy.

The Netherlands also intends to reduce its aid budget, with the goal of reducing it by 2.4 billion euros from 2027 to concentrate more on its priorities of trade, security and reducing immigration.

Scandinavian countries, traditionally big aid donors, are also cutting back.

Denmark, Norway and Sweden were in 2023 the only countries, along with Germany and Luxembourg, to surpass the UN’s target of earmarking 0.7% of their GDP to development aid. 

But Sweden, in a new strategy presented last year, said it plans to redirect money previously earmarked for development aid to measures reducing immigration.

Belgium, struggling with a budget deficit busting EU rules, is planning to slash by a quarter the budget of its department dealing with humanitarian aid, according to a specialized NGO "CNCD-11.11.11".

An end to records?

The page is turning fast from 2023, when public development aid around the world reached a record $223 billion, according to the OECD -- the fifth annual record in a row.

The higher figures during that period were largely driven by massive aid to war-torn Ukraine and money thrown at the Covid crisis.

They followed an aid funding slump in 2017 and 2018 that was itself an adjustment from higher spending seen in 2015 and 2016, when Europe was coping with a massive influx of refugees, particularly from Syria's civil war.

Provisional figures for development aid for 2024 will be published in April, the OECD said, declining further comment.

While OECD countries are cutting back, China in September pledged tens of billions of dollars to African countries in a bid to boost cooperation.

 

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