The big forces that will shape global development in 2025

As development and humanitarian advocates stare down 2025, foreign aid cuts are top of mind, but the forces shaping the new year are complex and nuanced. And while every year is touted as consequential or unprecedented, 2025 does appear to be substantially different. That’s according to Devex President and Editor-in-Chief Raj Kumar, who held his annual global development “ask me anything” forecast yesterday as part of a Devex Pro Live webinar. The hourlong event touched on subjects ranging from corporate philanthropy to Chinese expansion, but it was U.S. President-elect Donald Trump who was, unsurprisingly, the big question mark for many in the audience. Definitive answers about what a president who prides himself on unpredictability will do are hard to come by, but there are some trends to parse. Kumar pointed out that the threatened 30% cuts to the U.S. Agency for International Development during the first Trump administration never materialized, with Congress acting as a bulwark against them. But that was 2016, not 2025. Today, a conservative majority rules the Supreme Court while Republicans hold court in the U.S. Senate, House of Representatives, and White House. Plus, many traditionalist Republicans who had long supported foreign aid are being replaced by “Make America Great Again” loyalists. “A lot of the stars are aligned for [cuts] this time, in a way that they weren't in 2016,” Kumar said, noting that the MAGA movement has supplanted the status quo and amassed power across the U.S. government. “It's a very different group [of Republicans] now, so it's tough to say for sure what could happen, but my guess is we will end up with pretty significant cuts to U.S. foreign assistance that we will start to really feel those in 2026,” Kumar said, “and that humanitarian aid will have to stay elevated, just given the crises in the world. So a lot of this will come out of other parts of the aid budget.” “And so you lose, potentially, some of the nuanced conversation about how exactly should we trim with a scalpel the U.S. foreign assistance budget, and instead, you end up with a hatchet being taken to these accounts,” he added. Among the potential losers of the MAGA tidal wave? The United Nations. “I think about the U.N. agencies as being on the firing line here. Why is that? Well, for one reason, it's that the Trump administration is pretty anti-U.N. They make that very plain. For another, there's reasons why they and other global north countries aren't as positive toward U.N. agencies, in that they have a lot less control over them. They might send the money, but they can't really have an outsized voice in how that money's spent,” Kumar said. “So I think U.N. agencies, some of which get more than 40% of their budget from the U.S. government, and where the president will have a lot of control over deciding how that money gets spent, even with Congress having appropriated it, I think you could end up with a situation where U.N. agencies are in a really difficult situation of very severe budget cuts.” In contrast, multilateral development banks such as the World Bank could emerge as winners, in part because global north countries are large shareholders and wield outsize influence in these institutions. Other potential winners? Development finance institutions that catalyze private sector money while advancing geopolitical interests, such as the U.S. Development Finance Corporation, which was born during the first Trump administration. But Kumar said it’s important to remember that Trump’s well-known skepticism of foreign aid and his “America First” ethos extends beyond the United States. “He's by far the most important figure here, but it's the fact that you have this very populist, nativist [sentiment around the world]. … Now it's ‘My Country First.’ That approach across the global north is leading to countries immediately questioning what they are doing in terms of international cooperation?” Those questions have been compounded by economic headaches at home, from costly aging populations, to ballooning debt, to mounting trade tensions. So even though foreign aid amounts to a tiny sliver of overall domestic spending in most countries, “it's politically really salient, particularly for right-wing parties, to say: ‘How can we be spending money there when we have all these problems at home?’” Kumar said. This void leaves an opening for philanthropists — some of whom have accumulated more wealth than the gross domestic products of small countries. “There's $10 trillion held by just 500 people in the world now,” Kumar pointed out. “It's a staggering thing, and you look at someone like Michael Bloomberg, his foundation now gives away more money than the Danish government, right? And there's many others like him who have yet to start giving, and even Bloomberg himself could give much more. So as we look at this shifting reality in this political moment, you may see philanthropy start to step up in a way that eclipses traditional foreign aid.” But as much as we talk about traditional aid shrinking, it’s important to remember that it’s grown exponentially in recent years. “If you look at ODA, official development assistance, since 2000, it's more than quadrupled. And that does not include the Gates Foundation, Bloomberg Philanthropies, Bezos Earth Fund, etc.,” Kumar said. But bigger isn’t always better. While the sector has grown, it still clings to the old way of doing things. Kumar calls this phenomenon “Old Aid,” likening it to a giant iceberg melting in the face of change. “The space has just absolutely ballooned, but you could argue it still punches way below its weight in terms of the impact it ought to have,” Kumar said. In part, that’s because it’s adopted a culture of risk aversion and hasn’t fully embraced newer ideas like localization. “I mean, ultimately, this is government money,” he said. “It's very political. So that fear of taking real risk, of putting money, let's say, in the hands of local organizations in a significant way, or making larger bets and taking real risk on big initiatives, that fear I think has really constrained the results that you get out of this aid industry.” He added: “This iceberg grew and grew and grew, and now it's melting slowly, but this year, we're going to see maybe some pretty big shifts in how quickly it melts and changes, and that's going to have implications across the board.”