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Nothing says holiday cheer like fighting over money. And the United Nations is drowning in cheer as it wrangles over what my colleague Colum Lynch calls the “budget negotiation from hell.”
Also in today’s edition: In case the Trump administration hasn’t yelled it from the rooftops loudly enough, its approach to foreign policy is transactional. But for those in the back of the room who didn’t hear it, several new U.S. bilateral health compacts explicitly spell it out.
+ Join us on Jan. 5 for a Devex Pro Funding Briefing with Novo Nordisk Foundation’s Rikke Johannessen as she unpacks the foundation’s approach to structuring and deploying its global development and humanitarian funding. Register now.
The Grinch is trying to steal Christmas for U.N. negotiators, who are holed up in a basement staring down a deadline of Dec. 24 to hammer out a $3.2 billion budget that needs to be slashed by roughly 15% — though there’s a chance talks could go through the holidays until Dec. 31.
Experts say there is little hope of hitting either deadline unless governments drop their demands for line-by-line changes and instead agree to U.N. Secretary-General António Guterres’ budget and his blueprint for reform known as UN80.
“It’s almost like a game of chicken,” says Daniel Forti, head of U.N. affairs for the International Crisis Group. “If you open this up to line-by-line negotiations, then everyone’s in real trouble, because it’s just too much to do in too short a period of time.”
But as Colum writes, governments are digging in, loading the budget with a wish list of additional programs — or additional cuts — according to an internal memo that documents several hundred government proposals to the U.N. draft budget. A classic example of a pet project: Russia and Belarus’ proposal to let support dogs and cats accompany delegates in the budget negotiations (sorry, couldn’t resist the pun, especially since no mention of the World Health Organization means all our jokes about WHO down in WHOville ended up on the cutting room floor).
On a more serious note, the Americans are forcefully pushing for deep financial cuts beyond 15%, targeting staff benefits, funding for Palestinian relief, and a host of other programs.
In many ways, the negotiations are relitigating familiar feuds over U.N. priorities. China and the Group of 77 are pressing to secure more top jobs for nationals from the global south. The U.S. and Israel want to zero out funding to UNRWA, the aid agency for Palestinian refugees. And even neutral Switzerland is getting in on the act, cautioning U.N. staff against abandoning Geneva for cheaper digs.
But if they want some semblance of a holiday season, negotiators will have to get real and compromise — and fast.
In the coming days, Forti says, an agreement will “take everyone holstering their guns,” or else pushing it “down to the wire.”
Exclusive: Inside the UN’s budget showdown (Pro)
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Is it a case of America first, health second? Some fear so based on recent U.S. talks with Zambia and Nigeria as part of the Trump administration’s broader global health strategy.
That strategy doesn’t put health outcomes front and center. Rather, it comes with geostrategic strings attached, such as gaining a competitive edge over China, securing critical minerals, strengthening military alliances, or accessing data, my colleague Sara Jerving writes.
In Zambia’s case, mining sector reforms are at the heart of negotiations — which are still ongoing — whereas in Nigeria, the signed health deal focuses on protecting Christians from violence.
Desta Lakew of Amref Health Africa says the Nigeria deal raises questions about sovereignty and alignment with Africa’s own priorities: “Health partnerships should strengthen universal access — not privilege one group over another — because equity is the foundation of public health.”
Meanwhile, U.S. Rep. Gregory Meeks, a Democrat from New York, called the Trump administration’s conditioning of health assistance on access to Zambia’s critical minerals a “very troubling trend” that “evokes a colonial mindset.”
“President Trump is pursuing an approach that mirrors the worst practices of China and Russia, treating African countries as sources of commodities rather than as partners,” he wrote in a letter.
But others say transactionalism has always existed in diplomacy, even if it’s been subtler in the past.
And for the Trump administration, the deals are a win-win. As U.S. Secretary of State Marco Rubio recently put it, they are “proof positive that President Trump’s leadership is making America safer, stronger, and more prosperous — saving millions of lives and helping recipients stand on their own.”
Read: Alarm bells ring as US rolls out transactional strings for health deals (Pro)
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It’s not just the U.S. eyeing other countries’ critical minerals — or being upfront about it. The race to secure the backbone of clean energy technologies, which power everything from solar panels to electric vehicles, is global.
That includes the European Union, which is being more explicit about its own aims. Whereas before the bloc couched its resource diplomacy in the language of the green energy transition, its new action plan, dubbed REsourceEU, indicates a shift in tone, emphasizing strategic interests such as defense readiness and economic competitiveness over the collective good.
“They’re just looking to grab as much as they can rather than finding a different way around,” says Alison Doig, a climate and energy analyst. “What’s on offer is an extractive deal.”
And that’s not the kind of deal mineral-rich, lower-income countries are seeking, experts say.
Countries that can extract, process, or move up the value chain in critical minerals stand to gain revenue, infrastructure, and strategic relevance, while those locked into raw extraction risk repeating old patterns of resource dependence, my colleague Jesse Chase-Lubitz writes. Thus, critical minerals can accelerate inclusive development — or deepen existing inequalities.
The EU is proposing €3 billion to support the action plan’s initiatives, and, as Susannah Fitzgerald of the Natural Resource Governance Institute put it, “at the end of the day, money talks.
“But it doesn’t seem like they’re quite speaking the same language that partners want to hear.”
Read more: New EU mineral strategy swaps green goals for military readiness (Pro)
Related: How to turn the critical minerals boom into a development win
After fears for its survival earlier this year, the Millennium Challenge Corporation is ending the year on a positive note.
The MCC board recently picked new countries eligible for funding. Ecuador was selected to develop a compact — the large-scale grant agreements that make up the bulk of the agency’s work — while Bolivia and Guatemala were selected for threshold programs, smaller grants that support policy and institutional reforms and often lead to bigger programs.
“We’re eager to keep building strong presence in the Western Hemisphere to achieve our shared goals — and deliver meaningful results — for the American people, as well as those in Ecuador, Bolivia, and Guatemala,” Deputy Secretary of State Christopher Landau, who also presides over the MCC board of directors, said in a statement.
It’s the latest sign that MCC is chugging along.
“There’s been massive leadership changes, program cuts, staff losses, but in the context of reductions that we’re seeing across the U.S. foreign aid architecture, we have seen that MCC has survived and it is figuring out in real time whether and how it should adapt its model to the new strategic priorities of the administration,” Fatema Sumar, executive director of the Harvard Center for International Development, said at a Devex Pro Briefing last week.
Several trends have come into focus, my colleague Adva Saldinger writes. While large-scale infrastructure projects — particularly in the energy sector — are likely to remain central, MCC could add greater emphasis on supply chains and critical minerals (are you sensing a theme here?), while still maintaining education and agriculture components, experts said at the briefing.
“The silver lining here being if the agency can take advantage of the political drama and trauma of the past year to figure out ways to really get through some of the reforms that it has been debating for quite some time,” Sumar said.
Read: Weathering the storm — Millennium Challenge Corporation pivot underway (Pro)
Reform UK’s proposal to cap overseas aid at just 0.03% of gross domestic product, or just around £1 billion a year, would fall short of U.K.’s existing commitments to multilateral bodies such as the U.N., sharply undermining the country’s global influence, critics warn. [The Guardian]
Aid groups warn that Israel’s new NGO registration rules could force dozens of international organizations out of Gaza and the West Bank, triggering the collapse of already fragile humanitarian and health services. [BBC]
Sudanese Prime Minister Kamil Idris presented a U.N.-backed peace plan to the Security Council on Monday, calling for a monitored ceasefire and the disarmament of the Rapid Support Forces, but the U.S. pressed both sides to accept an immediate humanitarian truce. [The Independent]
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