“Extraordinary times require urgent action and new solutions. The Covid-19 pandemic upended decades of development progress that lifted more than one billion people out of poverty. The climate crisis is an existential threat to people and the planet. The international community’s efforts to end poverty and achieve the Sustainable Development Goals by 2030 have fallen off track. People in many parts of the world face widespread hunger, water and energy scarcity, and fragility, conflict, and violence. The international community must rise to meet these needs with urgency.”
Report to the Board of Governors, World Bank Development Committee, Sept. 27, 2023
It’s unusual for international aid to be at the center of global news and public debate. Typically, everyday operations of the World Food Program, USAID, the IMF and World Bank, and the World Central Kitchen are buried in the back pages of newspapers, rarely featured on social media, and low on the agendas of the US Congress, and legislative bodies across aid-donor countries.
But with major armed conflicts raging in at least three regions, with cross-border refugee flows rapidly rising, and with global trade and investment shifting dramatically due to global Pandemic, “foreign aid” is at the fulcrum of contentious national political controversies in 2024 – all amid widening skepticism both about globalization itself, and growing interdependency of nations worldwide.
Indeed, flows of international aid approached near-record levels in 2022, exceeding $200 billion in new commitments. Russia’s invasion of Ukraine in early-2022 triggered an upsurge of economic and military aid, boosting Ukraine to the top historic ranks of all US aid recipients, alongside Vietnam, Afghanistan, Israel, Egypt, France, United Kingdom and Iraq. Total US aid was about $70 billion in 2022, and Ukraine received roughly $12.4 billion, or 18% of total.
But the Center for Global Development in D.C. recently revealed a startling fact: US aid to “low-income” countries (LICs) has steadily decreased during the past decade (2012 to 2022). This aligns with a recent OECD analysis that found that all aid to LICs and least developed countries (LDCs) had also steadily fallen in 2022. Of course, alongside growing armed conflict, the other key factor affecting global aid flows was the worldwide surge in political and economic refugees, and the essential humanitarian support to displaced people on multiple continents, which rose to 15% of total OECD aid in 2022.
Regrettably, the Israel-Hamas war and resulting essential refugee aid support has succumbed to national and global crossfire. Despite the fact that nearly 1.4 million Palestinian refugees rely on the UNWRA for food assistance, in March 2024, the US Congress and Germany both paused all aid to the specialized United Nations agency for one year, pending the outcome of a conflict-related investigation of UNWRA. As UN Secretary General, Antonio Guterres sadly observed at the time of these cuts, “UNWRA is the backbone of all humanitarian response in Gaza.”
A March 2024 analysis of the US Council on Foreign Relations further explains:
“UNRWA is the only UN agency that provides direct services to Palestinian refugees; it also employs more than 13,000 people in the enclave alone… UNWRA now serves as the primary provider of shelter, food, water, and employment for many Palestinians. In addition to preventing the risk of famine through its delivery of essential aid, UNWRA provides the mattresses, hygiene kits, blankets, and vaccines for children against childhood diseases such as measles and mumps.”
With an operating budget of about $800 million in 2023, UNWRA provided vital financial backing for a network of over 600 schools, 60 refugee camps, and over 200 health facilities for an estimated 5 million-plus Palestinian refugees living in Jordan, Lebanon, Syria, Gaza Strip, and the West Bank. Thanks to the abrupt pause in all aid to UNWRA by the US and Germany, most of this essential humanitarian support has been halted across the ME Region. The current prospect is far-reaching famine across most parts of the GAZA – with no resolution for these desperate people end in sight!
Regional wars and refugee flows are increasingly competing for international aid finances, and the poorest developing countries are feeling the most economic and physical pain. According to the World Bank, food price inflation greater than 5% has badly hit over 60% of all LICs, and 64% of all lower-middle income countries.
Moreover, the “State of Food Security and Nutrition in the World 2023” assembled by FAO, UNICEF, World Food Program and WHO confirmed that global hunger remains far above pre-Pandemic levels — almost 800 million people faced serious hunger in 2022, roughly 122 million more than before the global Covid-19 wave. The “Global Hunger Index 2023” confirmed this trend, projecting that over 600 million people in 43 countries – stretching from Central Africa to the burgeoning slums of South Asia — will be chronically malnourished by 2030,
Among the world’s leading development economists, there’s a growing recognition that the recipe for national economic advancement through large-scale industrialization pioneered by the “Asian Tigers” – Hong Kong, Singapore, China, Taiwan and South Korea – simply can’t be replicated by most poor developing nations. As Patricia Cohen of the New York Times observed:
“The Asian Tigers and China succeeded by combining vast pools of cheap labor with access to international know-how and financing and buyers that stretched from Kalamazoo and Kuala Lumpur. Governments built up the roads and schools, offered business-friendly rules and incentives, developed capable administrative institutions and nurtured incipient industries.”
But the 21st Century economic circumstances have markedly changed: information technology is rapidly advancing and displacing workers; global supply chains are dramatically shifting; growing political tensions are reshaping trade patterns; and poverty, hunger and desperation are rising in the world’s poorest regions. With growing doubts about whether industrialization can still deliver the “miracle growth” it once did, the Times concludes: “For developing countries, which contain 85 percent of the globe’s population – 6.8 billion people – the implications are profound. And very destabilizing as well, I might add!
Responding to this fundamentally ‘changing landscape’ for developing nations, the World Bank and other leading aid institutions are intensively searching for a new “aid architecture.” Notably, the World Bank’s new President has pushed to institute a novel essential mission for the massive WB complex: “to end extreme poverty and boost shared prosperity on a livable planet.” The most profound implication of this revamp is that confronting “climate change” and “global warming” must be integrated into the primary objectives and outcomes of the world’s leading development organizations.
Bank data for the decade 2010-2020 demonstrates that the financial flows to developing countries have dramatically changed, attributable to a sizable increase in private sector financing, which grew at an impressive by 10% annually, while compared with 2% growth in official public finance. The result was that by 2020, the flows of private and public finance to DCs were roughly equal. But middle-income countries (MIC) absorbed about half of all ODA commitments over two decades beginning in 2000; while LDCs and LICs received only about 30% of all ODA commitments over the same period.
In preparation for the 28th UN Climate Change Conference in November 2023, the US Council on Foreign Relations issued a stark warning:
“Recent UN reports on climate change confirmed what we already knew: We are now at a “now or never” moment. From food insecurity to more frequent and severe natural disasters, climate change is putting us all at risk. When crops fail, women are often the last to eat. When disasters such as flood, hurricanes and cyclones strike, women are the most likely to die, sometimes twice as likely.”
Unfortunately, the political winds in Washington, DC are blowing in the opposite direction. Late in 2023, the US Congress defunded USAID money going to the Global Fund for Women – a UN-led agency focused on strengthening local grassroots climate groups seeking to boost biodiversity, food self-reliance, and clean energy initiatives in LIC and LDC nations. In addition, the Congress slashed $1 billion in funding for PEPFAR, a multi-year initiative launched by the Bush Administration that has very successfully fighting HIV, tuberculosis, and malaria worldwide for 2 decades. Indeed, PEPFAR has been credited with saving more than 25 million poor people’s lives since 2003!
As the Council on Foreign Relations analysis of these actions concluded:
“Defunding these programs sends the message to global partners that the United States is backing away from its position as champion for climate, health, and gender equality worldwide. And in today’s interconnected world, we know that global public health crises and climate threats do not just happen “over there.”
With US and Western financial support for Ukraine’s fight against Russia, and Palestinian relief in Gaza thrust into uncertainty, it’s an appropriate moment for those deeply concerned about the fate of humanity in the developing countries to reflect on both the immediate and “big picture” needs, pitfalls and possibilities.
Global aid to developing countries is only a part of the solution to widespread absolute poverty and burgeoning environmental threats. Still, the international development community comprises the key set of stakeholders who can lead the way toward tangible and effective solutions.
A fresh wave of isolationism, led by MAGA “America Firsters” is sweeping across the US and many leading aid-donor nations. It must be challenged on all fronts by people who care about the world’s least fortunate citizens – there’s overwhelming evidence that withdrawal from the world economic system and adopting national myopia is not a viable solution for any country on this small planet. The last time that leading Western nations yielded to these ultra-reactionary forces in the 1930s, advanced countries ended up fighting a very long and severely devasting World War – at the expense of all humanity.
