After withdrawing from the World Health Organization (WHO) and exiting the Paris Climate Agreement, President Trump recently declared a 90-day suspension on all USAid expenditures, effectively taking the world’s largest aid budget off the table.
As per the latest OECD evaluation, over $223bn (£177bn) was allocated for foreign aid in 2023, with the US contributing just over 30 percent to this global total. Its nearly $65bn input exceeded Germany’s by $26bn, and was more than three times the UK’s aid budget. However, this dominance crumbled when funding ceased, resulting in a “stop work” order that closed health clinics globally.
On the first day of the freeze, a USAID employee in southern Africa revealed to Wired magazine that more than “300 babies that wouldn’t have contracted HIV, now do.” This week, the head of WHO confirmed that HIV treatment centers and various health facilities spanning 50 countries halted their services. The suspension has led to significant disruption since the US had grown to be a more generous donor under President Biden, and many nations have struggled to maintain their aid budgets due to increasing debt burdens that have lingered since Covid, creating a spiral of dependency.
During Trump’s first administration, the US remained the leading global aid contributor. However, under Biden, annual contributions saw a noteworthy rise. My analysis of OECD data indicates that the average annual aid contribution under Biden was 47 percent higher compared to Trump’s first term. This has also had environmental consequences, particularly for endangered species.
In 2023, USAID provided $375.4m in funding for environmental and conservation efforts and had planned a future budget of just under $366m last December. While other global aid allocations shifted during Biden’s tenure, this level of giving had remained relatively consistent and served as long-term funding for numerous global conservation organizations in critically endangered biodiversity areas.
This funding is crucial for wildlife rangers in regions such as central Africa, Kenya, and Indonesia. Their initiatives encompass programs that directly protect gorillas in the Congo basin and orangutans in Indonesia, as well as environmental surveys that gauge the risk level of critical species. Some funds are also allocated towards alternative livelihood programs for communities and individuals who, amid current uncertainty, might resort to poaching to provide for their families in both the short and long term.
In terms of climate finance, the US was undeniably the most significant player, especially in a year that could be pivotal for the UN system. Under Biden, US climate finance surged sixfold, rising from $1.5bn in 2021 to $9.5bn in the fiscal year 2023, with last year’s estimate reaching up to $11bn. However, with Trump halting all of USAID’s funding and completely withdrawing from the Paris Climate Agreement, I suspect this share of the global climate finance pie is effectively off the table for a minimum of four years.
This presents a substantial gap in the entire UN climate system, which has been predicated on the idea that the largest historical polluters should contribute the most and provide support to those most affected. This was the case under Biden, and it was anticipated to grow as discussions surrounding a new trillion-dollar climate finance target heated up last year in Azerbaijan. Now, nations like Zimbabwe are left pondering where their energy transition support will originate. Countries like Indonesia are beginning to hesitate regarding their commitments, while European allies endeavor to bridge a significant gap.
Despite the daunting situation for climate finance, there still remains potential. Significant donors such as Japan, Canada, Korea, and numerous Nordic countries have historically established multi-year climate financing targets that are up for renewal this year. Nevertheless, filling the void left by the US will be an incredibly arduous task, both in terms of quantity and quality. The global aid sector stands at a crucial turning point. The UK, France, Germany, and Greece all reduced their aid contributions in 2023, and the Netherlands, Norway, and Sweden have announced substantial cuts moving forward. The traditional foreign aid dynamics between the West and the “rest” have shifted considerably.
This scenario opens a substantial strategic window for a country like China. The economic superpower already boasts a vastly influential global presence in trade, aid, and investment. Given its status as the leading exporter of renewable energy, this could potentially yield positive outcomes for climate initiatives. However, it’s also true that the aid landscape will never revert to its previous state. Although this transition will certainly create significant short-term gaps in climate and healthcare support, there is hope that it might foster longer-term reform. In light of the USAID freeze, numerous crucial aid contracts have already been annulled, but several, including the 11 contracts for Deloitte, may be rightfully scrutinized.
Many also believe this moment could shift the focus towards creating a more equitable world, rather than one balancing between aid reliance and persistent debt burdens. As Rwandan global health researcher Alice Bayingana pointed out this week, “If we are to fight for something in this moment, it should not be for the reinstatement of USAID but a massive coalition for debt cancellation.”
Bayingana, who previously worked on USAID-funded programs, envisions that this situation might pave the way for a new perspective on what aid and development could be: “We need something that transcends USAID. It should be structured to better equip countries to tackle their diverse challenges across climate, debt, and health.”
