How tighter ODA budgets will change development this year

Single-issue alliances and multilateral development banks will become more central and more powerful in global development this year, as other parts of the sector tighten their belts. That's the prediction of Devex President Raj Kumar, during an event on the key global development trends to watch in 2024. With heavy political pressures on aid budgets in some of the biggest donor countries and a growing share of official development assistance being diverted to meet humanitarian needs, less money will be left for long-term development programming, Kumar said. “This might be the year that we sort of have this wake-up moment where we realize … we actually have to transition the aid model,” he said. Those pressures, he added, are “potentially going to shift the architecture of our space. We've seen some of it already. But I think this year, we're going to see a lot more.” That will include the private sector and philanthropy playing a bigger role in filling the funding gap for development work. And it will see single-issue alliances such as the Global Fund to Fight AIDS, Tuberculosis, and Malaria and Gavi, the Vaccine Alliance, becoming more important, Kumar predicted. Those alliances are able to draw in funding from multiple sources, including philanthropy, the private sector, and governments, and use their power to work in “market-shaping ways” on particular issues, such as lowering the cost of buying drugs. “We might see more of them [the alliances], we might see the ones that exist just get more and more power and influence and funding,” Kumar said. More power may also shift to multilateral development banks, although this is dependent to a certain extent on successful MDB reform, which is a “harder challenge,” he added. Devex Pro members can watch the full event below to catch up on key trends and predictions for 2024.