The U.K. will keep diverting its aid budget to cover refugee costs until reforms are in place, Development Minister Anneliese Dodds tells Devex. The practice pushed aid spending to a 17-year low — and there’s no timeline to end the diversion as the asylum backlog continues to grow.
Also in today’s edition: How United Nations Secretary-General António Guterres got banned from Israel.
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The United Kingdom will keep dipping into its aid budget to cover the soaring costs of hosting refugees until it can get its asylum system under control, according to Dodds, who spoke with my colleague Rob Merrick.
Despite past criticism from her own Labour Party, Dodds avoided setting a deadline to stop the practice, which is expected to bring aid spending on international programs to a 17-year low.
Dodds explained that without a plan to tighten border controls and reduce arrivals, the aid diversion — which totaled £4.3 billion ($5.8 billion) in 2023 — will continue indefinitely. “Without that kind of a plan, we would not be seeing any reduction at any point in those figures,” she emphasized.
The U.K. has chosen to dip into its aid budget at a level far beyond any other donor nation, despite international pressure to stop. Dodds, who landed the development role after Labour’s July election win, linked the issue to recent efforts to crack down on people smugglers sending asylum-seekers across the English Channel in small boats. Labour has also started processing asylum claims left in limbo by the previous government, likening the system to the Eagles' song “Hotel California” — “people arrive in the asylum system and they never leave.”
Asked if the aid budget raiding might end soon, Dodds was vague, saying only that the Home Secretary had a plan in place as of July. Meanwhile, the asylum backlog reached nearly 119,000 people by the end of June, with no guarantee that the situation will improve anytime soon.
Read: Minister won’t say when UK aid spending on hosting refugees will end (Pro)
ICYMI: UK raiding of aid budget for refugee costs dwarfs rest of world
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One refugee who went on to work in development: Abir Aldhalimi, who fled Iraq during the Gulf War and spent part of her childhood in a refugee camp. Now a senior inclusive development adviser at USAID with a doctorate in clinical psychology, Aldhalimi draws on her personal experiences to tackle global challenges.
In a recent chat with Devex contributor Katrina Lane, she admits that her career path wasn’t conventional — but that embracing uncertainty helped her make a real impact. From refugee camp classrooms to working on global development policies, she’s shown that a unique perspective can lead to creative solutions in the world of international development. Her advice? Stay flexible, embrace your background, and prioritize mental health along the way.
Read: The career journey of a refugee who became a senior development adviser
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In a rare diplomatic move, Israeli Foreign Minister Israel Katz announced that U.N. Secretary-General António Guterres is now banned from Israel, accusing him of failing to strongly condemn Iran's missile attack on the country. Katz declared Guterres “persona non grata” via X, formerly Twitter, stating that anyone who does not fully denounce the attack “does not deserve to step foot on Israeli soil.”
Devex Senior Global Reporter Colum Lynch tells me the impact of the ban remains unclear, especially since Guterres and Israeli Prime Minister Benjamin Netanyahu have not spoken since the Hamas attack on Israel on Oct. 7, 2023.
U.N. spokesperson Stéphane Dujarric pointed out that this is an unprecedented step, with no known cases of a sitting U.N. secretary-general being declared persona non grata. Katz’s claim that Guterres failed to condemn Hamas' atrocities was also refuted by Dujarric, who emphasized Guterres’ repeated condemnations of the terror attacks.
Guterres himself condemned Iran’s missile strike in an address to the U.N. Security Council, calling for an immediate cease-fire and denouncing actions that only increase suffering for both Israelis and Palestinians. It’s unclear what practical effect the ban will have.
Following Tuesday night’s Iranian missile attack on Israel, Guterres issued a statement, saying: “I condemn the broadening of the Middle East conflict with escalation after escalation. This must stop. We absolutely need a ceasefire.”
+ On Oct. 24, we’ll be hosting our Devex World summit in Washington, D.C. — and Shamil Idriss, CEO of Search for Common Ground, will join us to discuss the conflict in Gaza and how peacebuilding can potentially move forward in the region. Get your tickets now.
Once more trusted than businesses, NGOs have now fallen behind, with trust sitting at 57%, according to this year’s Edelman Trust Barometer, compared to 61% for businesses.
“NGOs should have been having a moment,” said David Bersoff, Edelman’s head of research. But people are turning to businesses instead, seeing them as more competent, despite NGOs being perceived as more ethical, writes my colleague Elissa Miolene.
At a Devex event on the sidelines of the U.N. General Assembly, Degan Ali, executive director of Adeso, explained that as NGOs grow, they lose touch with the communities they serve. “Sometimes, bigger is not better,” she said. Ali stressed that local organizations, often overlooked, are doing the real work on the ground and should be given more power and influence.
Christine Sow, president and CEO of Humentum, added that short-term funding cycles hurt trust-building, as projects often stop abruptly. Businesses, she pointed out, are seen as delivering a return on investment — something nonprofits struggle to guarantee, despite their polished reports.
Read: How can NGOs strengthen trust in a changing world? (Pro)
Listen to our podcast with Ali: What it would take to move the needle on locally led development
Efforts to boost environmental, social, and governance — or ESG — criteria in financial markets have faced backlash over returns and complex regulations, writes Devex Senior Reporter Vince Chadwick. But Phyllis Costanza, chief social investment officer at Social Investment Solutions, remains optimistic.
“Rumors of [ESG’s] death have been greatly exaggerated,” she said at the Devex side event at UNGA, pointing to the $34 trillion in ESG assets expected by 2026.
Greg Spencer, CEO of Common Good Marketplace, is betting on impact-weighted accounts, which measure social and environmental impacts alongside financial returns. This, he said, gives a holistic view of an organization's true value.
Read: Why reports of ESG's death are 'greatly exaggerated'
+ Catch up on all the big development news and announcements from the U.N. General Assembly.
Most aid organizations don’t have the stomach for risk when it comes to trusting local players with loads of money. It’s one of the biggest barriers to localization — but it’s one that Peter Laugharn, president and CEO of the Conrad N. Hilton Foundation, says can be overcome with some good old-fashioned investigating.
“I think you can fairly easily open the aperture. Go to the capital city of a developing country, meet with the association of NGOs, use some shoe leather, go around to other funders and say, ‘Who do you like?’ And pretty soon, you have a list of 50 or 100 local NGOs,” he told our Managing Editor Anna Gawel at the Concordia Summit on the sidelines of the U.N. General Assembly. “And they will be of varying quality, skill, and fit with what you do, but there's no question that there are many.”
As for due diligence, “I think we have found that we can meet our IRS compliance and our board standards of diligence but still lighten up and still make it simpler for people to apply,” he said, noting that with Google Translate and other tools, “we can ease up a lot in the language of the original proposal.”
“I think we've come to a place where we are comfortable with the level of risk we're taking. It doesn't mean we will never stub our toes, but I think we are trying to set it up so that when we do, it's a learning opportunity. We don't walk into the same wall twice,” added Laugharn, whose foundation awards the largest humanitarian prize in the world — a cool $2.5 million.
+ Explore our page for more on the development and humanitarian sectors’ localization drive.
Over 700,000 people in Haiti — more than half of them children — are now internally displaced, according to a new report from the International Organization for Migration. [Al Jazeera]
Gaza’s humanitarian crisis has intensified as food supplies plummet, a direct consequence of Israel's stringent new customs regulation on aid shipments. [Reuters]
The European Commission has proposed a yearlong delay to its landmark anti-deforestation law after pushback from global agricultural heavyweights. [Bloomberg]
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