Devex Newswire: Anxiety over tariffs and aid cuts spills into Milken

Money talks at Milken — and it has a lot of interesting things to say about the world’s future.

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Condensed Milken

From aroma yoga to puppy playtime to the secrets of unlocking the “power of the gut-brain connection,” it’s easy to dismiss the annual Milken Institute Global Conference in Los Angeles, California, as fluffy new age-ism. But it’s not all down dogs and fluffy dogs.

The four-day event, now in its 28th year, brings together titans of finance worth trillions of dollars and a parade of policymakers and personalities — think everyone from X CEO Linda Yaccarino to former first lady Jill Biden — for dozens of sessions exploring everything from the emotional toll of disasters to opportunities in global real estate.

And while there wasn’t a session devoted specifically to U.S. President Donald Trump’s tariffs, they loomed over the proceedings like foreboding storm clouds.

U.S. Treasury Secretary Scott Bessent tried to reassure the thousands of executives and investors in attendance that his boss knows what he’s doing, despite blinking economic red lights to the contrary.

“Tariffs are engineered to encourage companies like yours to invest directly in the United States,” Bessent said during a Monday morning session.

“The primary components of the Trump economic agenda — trade, tax cuts, and deregulation — are not standalone policies. They are interlocking parts of an engine designed to drive long-term investment in the American economy,” he added. “I hope you can see the bigger picture now.”

Whether that’s enough to convince Wall Street, let alone the rest of the world, remains to be seen, but nerves are on edge, according to Kristalina Georgieva, managing director of the International Monetary Fund, who reflected on the recent World Bank-IMF Spring Meetings.

“The first thing I saw during the Spring Meetings was anxiety,” she said during her Milken session yesterday. “Policymakers came very anxious, asking what they are going to do.”

Georgieva said she expects a “flurry of activity around trade relations,” noting that while the world proved remarkably resilient through recent shocks such as the COVID-19 pandemic and the war in Ukraine, the transition to a new global trade equilibrium remains fraught with uncertainty.

“We have a world in which faith in fair trade has eroded,” she said.

The IMF has downgraded global growth projections from 3.3% to 2.8%, signaling a potential slowdown while not raising alarm bells of a full-scale recession.

Georgieva emphasized the need for economic reforms and regional cooperation. She pointed to emerging trends such as increased bilateral and plurilateral trade agreements, and urged countries to prioritize trade with neighboring regions and implement long-delayed structural reforms.

She did highlight one win: Bessent’s announcement during the Spring Meetings that the U.S. would remain a member of the World Bank. “He did a really great job to calm down people by reducing uncertainty,” Georgieva said.

ICYMI: US tariffs threaten to push debt-distressed nations closer to the brink

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Banga on the money

For all the talk of uncertainty — and there was plenty of it — Georgieva’s World Bank counterpart Ajay Banga tried to put a positive spin on the global aftershocks of Trump’s tariffs.

“The way I speak to the countries I'm involved with, which is the developing world, is I tell them, first of all, come and do the negotiation you have to do with the U.S. because uncertainty of this type is bad for everybody — your country, as well as for the U.S.,” the World Bank president said during a lunchtime Milken session.

Banga also pointed out that “the United States has historically had the lowest level of tariffs of any country in the world.”

“Even with the [base] 10% tariff [Trump is enacting], it's still among the lowest tariffs of anybody in the world. The developing world tends to have higher tariffs and higher nontariff barriers. We know if you reduce those, everybody benefits,” he said. “So what I'm trying to tell them is use the political tailwind that a crisis is creating in your country to try and make a change on your approach to tariffs and nontariff barriers.”

Common goals

U.S. tariffs are not the only threat to emerging economies. The Trump administration’s evisceration of foreign aid has come down on low- and middle-income countries like a bucket of ice-cold water.

So when bilateral aid dollars dry up, where do global development leaders turn? The world's public development banks might be the answer, according to Rémy Rioux, the head of France’s development agency, known as AFD.

Speaking with Devex’s Raj Kumar at Milken, Rioux highlighted how the Finance in Common movement has unified development banks across “each and every country in the world” as traditional aid faces unprecedented cuts.

With U.S. bilateral aid slashed and European commitments uncertain, Rioux emphasized the need for “financial engineering” to stretch limited resources further.

But don't call these institutions risk-averse. “Our risk appetite is decided by our shareholders,” Rioux said.

He pointed out a fundamental misunderstanding about development banks’ original mission. For decades, they’ve been evaluated solely on delivering official aid — not their ability to entice private investors. The big shift? Private investors are now approaching public institutions such as AFD seeking partnerships, “which was never the case” before.

“The old paradigm is broken. We are in the process of defining a new one.”

ICYMI: Amid aid cuts, a new development finance system starts taking shape

About face

Even a conversation on disaster preparedness and community resilience at Milken veered toward the topic of the U.S. foreign aid cuts — not surprising given that foreign assistance helps build resilience and respond to disasters.

Kerry joined Michelle Nunn, president and CEO of CARE, in denouncing the burgeoning transactional, self-interested approach to aid — which Kerry said erodes America’s soft power and Nunn said “changes entirely the expectation of America's leadership in the world.”

Nunn pointed out that when an earthquake struck Turkey and Syria in 2023, “the United States, within 24 hours, sent approximately 160 experts [and] 170,000 pounds of technical equipment.”

In contrast, in the aftermath of the earthquake that hit Myanmar this past March, the U.S. sent three USAID workers to the country. “And those people actually were fired during their deployment,” Nunn said, calling it “night and day in terms of what the world has looked to from an American perspective.”

Related: USAID cuts hinder Myanmar earthquake response

Bare bones

While the metaphorical aid dust is still settling, the initial chaos and disbelief have given way to a rethink on how the development sector could transform in this new era.

“Agencies have been stripped back to the studs: Senior leadership removed, staff slashed, contracts canceled. The logic is clear and deliberate: If it isn’t essential and it does not serve purpose, it doesn’t survive,” wrote Daniel Wordsworth, CEO of World Vision Australia, in an opinion piece for Devex. “What this means for the rest of us is simple: Adapt or risk irrelevance.”

For Wordsworth, that means going back to basics — think: food, water, shelter, education, and protection — and “re-anchoring our work in the humanitarian fundamentals.” It means ensuring programming is essential, scalable, and efficient. And it means being willing to “rethink the very systems we helped build,” and welcoming critiques even when they’re uncomfortable.

“For years, we have faithfully worked on other nations’ systems,” he writes. “Now it’s time to work on our own.”

Opinion: In an era of zero-based aid, the sector must reinvent itself, fast

In other news

Rwanda is in talks with the United States over the Trump administration’s plan to send deported migrants to the African country. [BBC]

Sudan’s paramilitary group Rapid Support Forces has launched a third day of drone attacks on Port Sudan, targeting its airport and key sites in a major escalation that threatens the city’s role as a vital humanitarian hub. [France 24]

Seven people died and 20 were injured Saturday following the bombing of a Médecins Sans Frontiéres-run hospital and a market in Jonglei, South Sudan, as the country verges on a civil war. [Al Jazeera]

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