The drama unfolding in the United States as the Trump administration has dismantled the U.S. Agency for International Development, once the largest bilateral aid donor, is sending shock waves across development finance and could put pressure on a system that has for years tried to mobilize more private sector funds to tackle development challenges.
Global needs are growing and many countries, not just the U.S., have cut their official development assistance. So some seemingly perennial questions about drawing more private capital are sure to ramp up, but those efforts may also suffer a blow.
“Dismantling USAID is going to create significant funding gaps, and it's just going to make it harder for us to mobilize private capital and achieve impact at scale,” said Elizabeth Boggs Davidsen, the CEO of GSG Impact, a global organization focused on growing impact investing, at a Devex event Monday.