It’s big and beautiful, according to U.S. President Donald Trump, whose tax-and-spending megabill is undeniably big. “Beautiful,” however, is in the eye of the beholder — especially for those in the development sector.
Also in today’s edition: Two U.N. agencies get creative in the face of aid cuts.
See you soon at 9:30 a.m. ET: As part of our Pro Funding series spotlighting funders rethinking traditional models, join us today for a fascinating deep dive with the GSR Foundation, an up-and-coming funder making waves at the intersection of crypto, emerging tech, and global development. Register for it here — we’ll send you a recording if you can’t attend live.
Trump’s just-passed, 900-page “big, beautiful bill” is a mixed bag for the development sector. On the one hand, certain groups and countries will feel the pain. On the other, it could’ve been much worse.
Let’s start with the pain: remittances. This money that migrants send to family and friends back home far outstrips official development assistance and fulfills critical needs from food to health care, my colleague Elissa Miolene writes.
But Trump’s bill will slap a 1% tax on remittances sent from the U.S., which could cost countries billions of dollars. In Mexico alone, it means a loss of over $1.5 billion a year — nearly 30 times larger than what Mexico is projected to lose from the collapse of USAID.
Helen Dempster of the Center of Global Development calls the remittance tax in the wake of U.S. aid cuts a “double-whammy.”
“Remittances were going to be even more important,” especially for smaller countries, she says. “Now, they’re suffering from this extra blow.”
Still, the impact is not as stark as it could have been. The first version of the bill proposed a remittance tax of 5%, one that would only affect noncitizens such as green card holders, temporary workers, and the undocumented. It was later reduced to 3.5%, and ultimately dropped to 1% — but today, the tax will apply to all remittance senders, including U.S. citizens.
Another relief for development advocates: An escalating tax on philanthropic foundations that would’ve deeply cut into charitable giving was ultimately dropped. On the flip side, the bill’s cuts to U.S. health care and food assistance could in turn squeeze giving abroad.
“This bill is a contradictory mix of meaningful progress for charitable giving and deeply harmful setbacks for the communities philanthropy exists to support,” says Deborah Aubert Thomas of United Philanthropy Forum. “We are proud of the sector’s unified advocacy that helped secure major wins — but we unequivocally condemn the devastating cuts to core safety-net programs.”
Read: What does Trump's ‘big, beautiful bill’ mean for global development?
What really is the future of U.S. foreign aid? For the next few months, Devex Pro Insider’s special Saturday edition, led by Senior Reporter Michael Igoe, delivers exclusive insider reporting, interviews, and analysis tackling some of the biggest questions about the new realities of U.S. aid.
Not yet a Pro member? Upgrade with a 15-day free trial to get this Saturday’s edition straight in your inbox.
The International Fund for Agricultural Development, which supports small-scale farmers, pastoralists, and entrepreneurs in some of the poorest parts of the world, isn’t just facing some U.S. cuts. Trump completely zeroed out assistance to the Rome-based United Nations agency.
Despite the potential loss of the U.N. agency ’s largest donor, IFAD President Alvaro Lario is optimistic, Elissa writes.
During the first Trump administration, IFAD was slated to receive nothing from the U.S. — but after the president’s budget request made its way through Congress, the organization regained its long-standing bipartisan support.
And with or without money from the U.S., IFAD is transforming to confront a changing world, tapping into different financial flows to keep its programming running.
That includes a remittance program launched alongside the European Commission at the Fourth International Conference on Financing for Development.
“We know a lot of remittances go toward paying school fees, paying for certain purchases of even solar energy, and for a lot of small things in villages, in communities,” Lario says. “But there needs to be opportunities to actually translate that into investment, and into returns for their own savings, so they don’t have to consume everything but actually also build capital for the future.”
“We cannot continue just talking or crying about whether there is more or less financing,” he adds. “We need to move forward.”
Read: IFAD looks beyond US aid, and toward catalytic solutions
Not every country is seeing such deep cuts. Canada, the sixth-largest bilateral donor within the OECD Development Assistance Committee, has seen its total aid spending grow in recent years — though estimates for 2024 do indicate a drop-off. But it’s bucking other trends: For one thing, its foreign assistance policy enjoys strong public support.
Plus, unlike the U.S., the country isn’t shying away from hot-button issues such as gender.
Canada’s aid policy adopts a feminist approach, making gender equality and empowerment cross-cutting priorities for achieving its development targets.
But exactly how much does it spend on aid? What are its priorities?
Using the latest data on bilateral and multilateral aid from the Organisation for Economic Co-operation and Development as primary sources, my colleague Miguel Antonio Tamoman looked into Canada’s aid spending in 2023 — from its top recipients down to its priority sectors. We also looked into how Global Affairs Canada, its lead aid agency, spent through major contracts, and who its top awardees were.
Read: Canadian aid — a primer (Pro)
+ Interested in more funding analysis? Check out our funding overview page. And don’t forget to sign up for Devex Money Matters, a free Monday newsletter to get weekly roundups of new funding opportunities and practical advice on resource mobilization and business development.
Budget cuts — or rather, the restructuring they often necessitate — cost money in and of themselves.
UNAIDS is confronting this firsthand as it downsizes, so its board has authorized using a portion of operating reserves to cover the cost of the agency’s ongoing restructuring efforts.
The decision allows UNAIDS’ executive director to draw up to $15 million from its Operating Reserve Fund, which holds a total of $35 million, my colleague Jenny Lei Ravelo reports. The money from the reserve fund will be used to implement various activities, including the secretariat’s restructuring, which is forecast to cost $32.8 million in 2025 and 2026. Without it, UNAIDS could face a shortfall of $8.7 million next year.
Read: Board agrees for UNAIDS to use its reserves for restructuring
+ For more insider reporting on global health, sign up for Devex CheckUp, a free, Thursday newsletter — and get today’s edition in your inbox soon!
The Ukraine Recovery Conference, taking place in Rome, Italy, today, marks another key step in the country’s rebuilding, even in the midst of war.
“Ukraine is moving quickly to implement a more strategic, coordinated approach to recovery,” write Jarno Habicht, Solomiya Kasyanchuk, and Triin Habicht of the World Health Organization and Mark Hellowell of the University of Edinburgh in a Devex opinion piece. “The country’s health system can be a major beneficiary of this.”
They note that there have been more than 2,500 attacks on Ukraine’s medical facilities since the start of Russia’s invasion, and that the cost of recovery needs in the sector is estimated to be $19.4 billion.
“International support can ensure that damaged facilities are repaired and that some of those destroyed are rebuilt. But merely restoring what has been lost is not where the real opportunity lies,” they argue.
“Ukraine needs a smarter, future-ready health system that delivers high-quality care at a sustainable cost,” they add. That means a “fundamental restructuring of Ukraine’s health care infrastructure” which includes reducing reliance on hospitals and providing more services in local clinics and community settings, and creating a smaller number of better-equipped facilities that deliver comprehensive care.
“In Rome, there is an opportunity to build a framework that ensures capital flows to the right projects — laying the groundwork for a renewed health care system in Ukraine aligned to the highest European standards,” they write.
Opinion: Wartime recovery offers chance to transform Ukraine’s health care
The U.S. announced yesterday that it has imposed sanctions on Francesca Albanese, U.N. special rapporteur on human rights in the occupied Palestinian territories, for her open criticism of and calls to investigate the Israeli military offensive in Gaza. [Reuters]
At their recent bloc meet, Caribbean nations pledged to strengthen regional cooperation to combat crime and violence, vowing coordinated support for Haiti as it grapples with gang-related unrest. [The Guardian]
Moderna is developing the first mRNA vaccine against Marburg, a deadly disease. [The Telegraph]
Sign up to Newswire for an inside look at the biggest stories in global development.