Devex Pro Insider: The winners and losers of 'America First' foreign aid

This is a special Saturday edition of Devex Pro Insider from Senior Reporter Michael Igoe. For the next few months, this newsletter will tackle some of the biggest questions about the future of U.S. foreign aid, with insider reporting and analysis delivered straight to your inbox. It was great to see many of you in New York last week at Devex Impact House, or elsewhere amid the chaos of the U.N. General Assembly. I wasn’t entirely sure what to expect heading into UNGA this year, given the earth-shaking eight months that preceded this gathering of global development devotees. There are two words I would use to describe what I saw and heard: grief and practicality. In my UNGA experience, few in the development community were trying to paper over the unprecedented turmoil that has resulted from the Trump administration’s aid freeze, cuts, and animosity. At an event convened by AIDS activists fighting for access to medicines, I listened to Isata Dumbuya from Partners In Health share that mothers in Sierra Leone are splitting their HIV medicines in half to share with their children due to depleted stocks. At Devex Impact House, I chatted with a recent university graduate facing a calamitous development job market on the verge of getting worse as the United Nations mulls 20% staffing cuts. I had a lot of conversations — including with former USAID Administrator Mark Green — about what went wrong and why support for aid collapsed. “We screwed up,” Green told me. “We failed to engage and make the case over and over again.” There was a palpable sense of loss, and — at least from what I could tell — little hesitation to acknowledge it. That may be what explains the second thing I noticed: practicality. Grief is reckoning with something that is gone, and doing so is what makes it possible to move forward. UNGA, to me, felt like one part funeral, and one part emergency strategy session. The old world of development is gone. How do those who still believe in the core tenets of partnership, solidarity, and humanity adapt? I think the problem, at this moment, is that most development advocates still don’t know what they are adapting to. We are somewhere in the muddy waters between destruction and creation. That’s where I’ve been doing a lot of my reporting recently, and don’t get me wrong, I am still groping around under the surface too. Here are a few things I’ve found down here. ICYMI: UN chief outlines plans for thousands of new job cuts The room where it happened I’ve gotten a lot of questions about an article I wrote last week from the State Department’s UNGA side event on the new “America First Global Health Strategy.” If you didn’t catch the piece, here’s a recap: • Trump’s State Department is reshaping global health programs around bilateral “compacts” with partner governments that will transition funding responsibility from the U.S. government to recipient governments over the course of two to five years. • Within the context of this new approach, the administration is deeply skeptical of the international NGO community — contractors and nonprofits — and looking for alternatives. • “Skeptical” might be an understatement. Acting Under Secretary Jeremy Lewin personally intervened to deny a prominent NGO entry to last week’s side event, ordering the removal of their reserved seat from one of the main tables. Here’s a before-and-after photo showing where the organization — Global Health Council — was originally meant to sit, and then where their seating placard was removed. There’s a lot of context here — the most obvious being that GHC was suing the Trump administration over its foreign aid cuts. But I think it would be a mistake to write this incident off as the result of a botched invite list or isolated animosity. The new U.S. global health strategy is explicitly anti-NGO. It lists the salaries of specific highly paid NGO executives as evidence of waste and overspending. NGO representatives were not among the speakers at this event. Instead, it was U.S. government officials, African health ministers, and representatives of American tech and pharmaceutical companies. To the extent this administration is building back foreign assistance programs, it appears to be building them in ways that often exclude the legacy U.S. development NGO community from its plans. Here’s another data point: This week, The Washington Post published an investigation of how Trump’s aid freeze disrupted the U.S.-funded global health supply chain — and what the human cost of those delays has been. The State Department did not directly respond to the Post’s findings, but what they did offer is revealing. According to the Post, the department said in a statement that it is “building ‘future-ready’ supply chains with drone technology that will improve speed and efficiency in some parts of Africa.” “Without offering specifics, the statement said opposition to its efforts to improve the pipeline has come from ‘beltway bandits’ who have profited from the distribution system,” the article said. “Under an America First approach to foreign assistance, we are engaging more directly with recipient governments,” the department’s statement added. “We anticipate soon sharing updates on our strategies to cultivate a more durable and lasting supply chain and health infrastructure globally.” All of this tells me we are rapidly approaching a decisive moment when two things will happen: 1) Trump administration appointees will undertake some kind of sorting process to determine which organizations can work on U.S. aid projects; and 2) Development organizations will be forced into some kind of self-examination to determine whether they are willing to accept the terms of that partnership. We are entering a new phase of this story, and it’s only getting muddier. Background reading: Trump’s ‘America First’ global health plan sidelines NGOs More reading: Trump administration releases long-awaited global health strategy ‘Human flourishing’ A very concrete example of this sorting process appears to be in the works right now. For weeks, I’ve been hearing rumors about an updated and expanded version of the Mexico City Policy — also known as the “global gag rule” — that Trump administration officials have been preparing. Multiple sources expect that the new version of this policy will broaden the scope of restrictions on recipients of U.S. funding to include not just the current ban on abortion-related services, but also anything related to diversity, equity, and inclusion, and LGBTQ+ and gender rights. It would also apply to all nonmilitary assistance funds, not just global health funds, as it did during the first Trump administration. Multiple sources have told me that this new policy will be rolled out under the moniker of promoting “human flourishing.” This week, an unnamed State Department official confirmed those details to the Daily Signal, a conservative news outlet. Politico followed suit with further confirmation. While the Trump administration has made little secret of its opposition to sexual and reproductive health services and programs that advance LGBTQ+ rights, the apparent additional crackdown on programs with DEI components is particularly worrying because of its potential breadth and openness to interpretation, says Cristal Downing of the International Crisis Group. “The term has become this kind of slur for anything related to gender parity that they don’t like,” she told me. It also likely means that a large number of organizations outside the global health sector that have not had to navigate these culture war-related policies in the past will suddenly have to do so. Downing said she is aware of a few organizations that have hired consultants to help them make their work more “palatable” to the U.S. government. Of course, this is all happening in a context where the same administration that is rolling out new, tighter restrictions has “created an environment where everyone is desperate for funding,” Downing said. Background reading: Trump reinstates Mexico City Policy, further limiting abortion care + For more content like this, sign up to Devex CheckUp, our free weekly newsletter that provides front-line and behind-the-scenes reporting on global health. Winners and losers This policy is not going to be the only litmus test for organizations weighing the costs and benefits of working on U.S. foreign assistance programs in a post-USAID world. The Trump administration has been pretty clear about its foreign policy goals: border security, critical minerals, and infrastructure investments that advance America’s economic and geopolitical interests. A long-time development contracting expert who is in contact with members of the administration told me they expect to see a lot of funding for “freedom of speech initiatives” around the world. “How that’s defined is going to be interesting,” they said. The same person told me that Trump administration officials do not currently know which organizations they can work with when they begin to roll out new programming, describing a major trust deficit between political appointees from outside the development establishment and an NGO community they believe is ideologically motivated. Organizations that want to receive money in the new world of U.S. foreign aid will have to prove that they are “objective service providers,” rather than “ideologically driven” groups that are "surreptitiously acting contrary to this administration,” my source said. “My guess is that you’re going to start to differentiate winners and losers over the next few months,” they said, adding that this will largely come down to “verifiability of compliance” with Trump’s executive orders. I have previously reported in this newsletter about the State Department’s strategy for moving money quickly before the fiscal year ended last month. As a congressional aide told me, the department has pushed large amounts of money into “big regional pots,” which it will figure out how to spend later. We’re starting to get a clearer picture of the rules, regulations, priorities, and prejudices that will shape the competitive arena for those and future funds. That doesn’t mean the water is getting easier to wade through. Read: The $6.5B US foreign aid spending spree (Pro) + The Trump effect: Explore our dedicated page to catch up on all the latest news, in-depth analysis, and exclusive insights on how the Trump administration’s policies are reshaping U.S. aid and global development.