The U.S. State Department is bracing for mass job cuts. Staff are in limbo, with no timeline, no names, and no clarity — only fear.
Also in today’s edition: With U.S. and U.K. aid in disarray, development leaders are pushing bold fixes. Plus, how the private sector can fill in the gaps, and are increased taxes a possible climate solution?
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First it was USAID — and now, it’s the State Department. Last week, the Supreme Court cleared the way for President Donald Trump to continue dissolving the federal workforce, and the State Department is expected to lose up to 2,000 employees as a result. It’s not clear exactly when the shoe will drop, but many assume they’ll hear the news today, sources tell Devex.
“It sounds like only a small group of senior political appointees know who and when,” said one USAID-turned-State Department staffer, who spoke to Devex on Thursday. “The waiting is just dragging things out, delaying the inevitable.”
The RIFs — or reductions in force — are expected just days after approximately 250 people migrated from USAID to the State Department — the sole survivors of an agency that once had more than 10,000 staff. Those staffers have been told they won’t be affected by the RIFs, but haven’t been given anything firm in writing.
“Dread and panic have set in. But no one knows anything,” says a current State Department official.
“I hear virtually no work is being done. This is all everyone is focused on and even very senior career officials don’t know who is on the list for being fired,” says a former USAID official familiar with the matter. “I was told everyone feels like the sword of Damocles is over their head.”
ICYMI: State Department employees in anxious limbo over massive staff cuts
+ For the next few months, Senior Reporter Michael Igoe will be tackling some of the questions around the future of aid in the aftermath of USAID dismantling and its absorption into the State Department in a special Saturday edition of the Devex Pro Insider. Tomorrow’s edition will dive into “the new kings of American soft power.”
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Although the emotional trauma and life-or-death repercussions of shutting down USAID are still very real, the initial shock and trauma have to a degree worn off — and people are now looking to what comes next. But they’re also trying to figure out how to proactively shape what “next” looks like and even taking an optimistic view that reforms and ideas which have been floating around for decades can finally come to fruition given the urgency of the moment. Time, after all, is not on the sector’s side.
So Devex contributor Jessica Abrahams asks a fundamental question: How can we fix aid?
U.K. Foreign Secretary David Lammy is proposing a summit of Western donors to discuss its future. He says “there has been a need for a deeper and more meaningful conversation about Western development [aid] for many, many years.” But some question whether the U.K., with its own budget cuts, is best placed to lead.
Still momentum is building. Danny Sriskandarajah, chief executive of the New Economics Foundation, calls this “as good an opportunity as we’ve had for years” to focus aid on the lowest-income countries. “Analysis after analysis” shows too little money actually reaches them. David Miliband, CEO of the International Rescue Committee, adds: “The aid system can’t do everything on its plate with the money it currently has.”
He urges bringing in new donors: “It is legitimate to … call on newly wealthy countries, notably in the Gulf but also elsewhere, to play their full part.”
Sriskandarajah backs pooled funds: “It should be based on assessed contributions, not on voluntary contributions.” And: “Why couldn’t we have large corporates contribute to some of this?”
And as ODI Global’s Nilima Gulrajani puts it: “The long-term view is really about how we build a pathway to reduce dependency [on aid].”
But Sriskandarajah warns: “We’ve got to back some of these ideas because otherwise, we’ll end up just trying to defend the system until there’s nothing left.”
Read: How do we fix aid? (Pro)
+ Listen: For the latest episode of our podcast series, Devex’s David Ainsworth and Anna Gawel sit down with global development expert Nasra Ismail to discuss what the future of foreign assistance might entail.
With development aid cratering — a 17% drop this year alone — John Denton, whose organization, the International Chamber of Commerce, or ICC, represents 45 million businesses in 170 countries, said it’s time to face reality: “Let’s be real here. We’ve now got this demise, if not, significant erosion of the development assistance opportunities.”
Denton said the fix is clear: “It needs to be private sector-led economic development.”
Speaking at the Financing for Development conference in Sevilla, Spain, he pointed to past wins — like ICC’s role in the Black Sea grain deal — as proof the private sector can deliver, fast. “The private sector shows its real value: first of all, the closeness it has to communities. And second, it brings innovation,” he added.
But red tape is choking momentum, writes my colleague Elissa Miolene. Post-2008 financial rules now block capital from reaching emerging markets, Denton warned. One big barrier: Companies can’t have a higher credit rating than their own governments.
“Those companies now, even if they’re fully functioning, investable companies, can't get access to finance,” he said. And that, he warned, is “putting a huge brake on economic activity.”
Read: Private sector must fill gaps — but obstacles remain, ICC warns
Low- and middle-income countries left the United Nations’ COP29 climate conference exhausted — and empty-handed. After marathon talks in Baku, Azerbaijan, they got a vague $300 billion-a-year pledge and an IOU in the form of the Baku-to-Belém Roadmap.
Then, at the halfway talks in Bonn, Germany, last month, they pushed for firm public finance. But wealthy nations signaled the discussion is over, writes my colleague Jesse Chase-Lubitz.
The talks kicked off with a fight to include Article 9.1 — the Paris Agreement’s clause on developed countries providing finance to developing countries — on the official agenda. Lower-income countries lost again. Instead, they were given a footnote and a single two-hour slot to speak, where mics were cut mid-sentence. “I would expect that parties are allowed to say what they want to say,” said India’s lead negotiator Amandeep Garg.
“We are bewildered by the backtracking on finance,” Anna Rasmussen of the Alliance of Small Island States added. Others see no path forward now that the new collective quantified goal, or NCQG — which set the $300 billion goal — is done. “There’s no home for it anymore,” said Jeffrey Qi of the International Institute for Sustainable Development.
Developing countries said Article 9.1 is a legal obligation. Wealthy countries said it was settled in Baku. “There’s a reluctance to take or accept any of the responsibility,” said one frustrated delegate.
With traditional aid drying up, some countries are floating alternatives — including taxes on the ultrarich, high-emitting ships, luxury goods, and even defense firms.
Most experts doubt these are silver bullets. But with wealthy nations digging in, they’re gaining attention. “International negotiations can set targets,” said Joe Thwaites of the Natural Resources Defense Council. “But it’s primarily domestic politics that determines how well countries deliver.”
Some of these so-called innovations — such as levies on aviation or fossil fuels — have been around since 2010. Back then, “governments didn’t really pick up these ideas,” Thwaites said. “But 15 years on … countries are taking a deeper look.”
Read: With climate finance deadlocked, global tax proposals rise again
Simon Nanne Groot, the visionary Dutch agronomist who revolutionized smallholder farming with better seeds and big ideas, has died at 90 in his hometown of Enkhuizen.
Groot founded East-West Seed in 1982 after a trip to the Philippines left him stunned by “the low quality of the seeds in that spot of the world.” His mission? Bring world-class hybrid seeds — and the know-how to use them — to farmers across the tropics. “You see, people there have little money and lousy seeds. That is not a good combination.”
He lived by one rule: You serve the farmer first.
By 2019, his efforts had lifted millions out of poverty, earned him the World Food Prize, and made nutritious vegetables more accessible to hundreds of millions. “Simon was a bundle of great energy and spirit,” says Gebisa Ejeta, chair of the World Food Prize laureate selection committee.
But seeds weren’t enough, writes Senior Editor Tania Karas. “We came up with a modest attempt to teach the farmers about how to handle those seeds better ... And that was the beginning of what we now call ‘knowledge transfer.’” That program now trains tens of thousands of farmers every year.
After winning the prize, he donated most of the money to launch a pumpkin farming project in Uganda — teaching 14,000 farmers and sparking regional demand. It was, he hoped, just the beginning.
Three of his four children continue his legacy at East-West Seed.
Read: Seed pioneer Simon Groot leaves legacy of farmer-focused innovation
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Europe and Israel have struck a deal to allow increased food and fuel into Gaza, just as an Israeli airstrike near a clinic in Deir al-Balah killed 15 people, including 10 children. [AP]
The World Food Programme is reviewing its partnership with the Boston Consulting Group over its involvement in Gaza-related projects, while two senior officials with the private firm have been fired for leading said projects. [Financial Times]
An investigation by Global Witness found that several low-income countries, such as Somalia, Yemen, Haiti, and the Democratic Republic of Congo, have paid millions to Trump‑linked lobbyists and offered access to critical mineral resources in exchange for U.S. humanitarian and military support following foreign aid cuts. [The Guardian]
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