How will the rest of the world respond to lights-out at USAID?

The Trump administration’s moves to dismantle the U.S. aid department and withdraw from the World Health Organization have sent shock waves across the development community — and not just in the United States. But how will the rest of the world respond? In the immediate term, INGOs across the world are scrambling to replace lost funds and dipping into their reserves to be able to make good on their commitments to staff and their legal obligations. The longer-term impacts are harder to predict, said Thomas Byrnes, director of humanitarian consulting firm MarketImpact. “If you throw a hand grenade into a room full of people, you need a supercomputer to tell you exactly what’s going to happen, but even a 2-year-old can tell you it’s not going to be good,” he said. “So we don’t know what the second-order impacts will be.” What we do know is that there’s now a $40 billion black hole where the funding from the world’s largest aid provider used to be. Will others on the global stage make up the shortfall? “No one is rushing to fill this hole of U.S. aid,” said Byrnes. “If anything, all indications are the opposite: They were already cutting heavily. And the wider context of what Trump is doing with Ukraine means everyone is saying: ‘We need to spend more money on defense.’ So, not only is the U.S. pulling back on funding; it’s also putting extreme stress on disposable income.” The funding map U.S. support is too extensive to be fully replaced, but there are a few bright spots on the map — Myles Wickstead, an associate program director at foreign policy agency Wilton Park, names China as the obvious candidate to help with the shortfall. Meanwhile, Hadja Lahbib, the European commissioner for equality, preparedness and crisis management, wrote in the Financial Times that the institution will continue to build on its record as a “leader in humanitarian action.” The bright spots aren’t really all that bright, however. China and Russia are also global superpowers, while Saudi Arabia and the United Arab Emirates are key emerging powers. But most of the experts Devex spoke to for this article were unanimous in their skepticism that they will step in to fill the vacuum left by USAID. Currently, China gives an estimated $5 billion to $7.9 billion to foreign aid, Saudi Arabia’s aid spending has averaged $3.4 billion per year since 2000 and the UAE gave $3.5 billion in 2022, the last year for which data is available. Data on Russian spending beyond 2017 is hard to come by. While China might give billions of dollars to governments or to Chinese companies to build infrastructure in Africa for their Belt and Road initiative, it’s unlikely to show much interest in liberal development orthodoxy, said Byrnes. The Gulf countries, meanwhile, are poised to spend heavily on Syria but, again, not on Western INGOs. This puts pressure on the top four non-U.S. providers of official development assistance — Germany, Japan, the U.K., and France — to up their game. But all indications there point to this not happening. The U.K. has just confirmed a cut to its aid budget from 0.5% of gross national income to 0.3% in 2027 to help pay for a major increase in defense spending — a move which U.K. Prime Minister Keir Starmer said was accelerated by President Donald Trump taking office in the U.S. Germany cut over €4.8 billion from its core development and humanitarian assistance between 2022 and 2025, and while its newly elected mainstream conservatives are unlikely to make the German Ministry for Economic Cooperation and Development suffer the same fate as USAID, as the far-right AfD party pledged to do, further reductions in spending are expected. France cut its budget by over $2 billion between 2022 and 2025. The country’s development spending then took an additional €2.1 billion hit in the 2025 budget belatedly passed earlier this month. Japan typically only funds Japanese NGOs, said Byrnes, and as for the EU itself, it “will still fund a lot in Libya, they’ll still fund to stop people coming to Europe, but if it’s a country where the people don’t come to Europe, it’s not going to be a priority.” Elsewhere in Europe, it's a similar picture. Sweden will reduce its aid budget to 53 billion Swedish kronor from 2026, down from the current level of SEK 56 billion. Switzerland is also discussing foreign aid cuts of more than 320 million Swiss francs over the next three years; and in the Netherlands, the development minister has similarly called for a reduction in aid spending, redirecting funds to projects that “contribute directly to [Dutch] interests.” Spain and Norway are rare outliers: Norway allocates more than 1% of its national income to official development assistance, giving $5.5 billion in aid in 2023, while Spain — which gave $3.9 billion in aid in 2023 — is understood to be wanting to up its development spending. It’s not that the world is following the U.S.’ lead so much as that the American cuts were part of a bigger trend, said Deborah Doane, an independent consultant and author of the book “The INGO Problem.” “USAID was just the latest in the line — albeit the biggest,” she said. “Foreign aid has been declining for years.” The public has endured a global pandemic, recession, and war in Europe in the last few years, and governments are feeling the pinch at home, which means many pull back on their aid budgets. Another question that is doing the rounds off the back of the U.S. cuts is whether this seismic shift in funding availability could accelerate the decolonization of the aid sector, putting more power in the hands of the countries and communities of the global south. Ebuka Emebinah, director of the World Hepatitis Alliance, believes that if African governments made cost savings, they could find the bandwidth within their budgets to support local NGOs and communities, without the need for external help. “There is a need for domestic resource mobilization,” he said, pointing to Nigerian lawmakers’ approval of an extra $200 million for the country’s health sector to fill the gap left by the suspension of U.S. aid. “There is no better time to do it than now.” For Byrnes, though, there’s never been a worse time for recipient countries to push localization. “The problem is: who’s going to fund it now? If the state had the money, they would generally spend it on social welfare or social protection, rather than funding a parallel structure [like an NGO],” he said. “It's not that the global north actors have been a canopy of trees obstructing the sun and not allowing the global south to grow — no, it’s more that the global north actors had access to the irrigation, or funding capital, from the global north, which the global south could never reach and now probably never will.” Next steps So where does this leave global development moving forward? Sources predicted that we’ll see a return to the aid sector of 15 years ago — albeit with a greater focus on humanitarian assistance. At that stage, inflation-adjusted figures show that net official development assistance, or ODA, from Development Assistance Committee countries amounted to just $124.8 billion, compared to $216.5 billion in 2023. That means organizations will need to prioritize. Oxfam said in a press release that the U.S. cuts alone would have “deadly consequences for millions of people living in dire humanitarian emergencies and extreme poverty.” It could also mean the world is more vulnerable to future global health threats, commitments to provide climate finance to developing countries will be jettisoned, and a possible surge in propaganda and misinformation. “What appears to be happening is that the big donors are cutting development assistance, so the assistance that remains will be focused on humanitarian aid, lifesaving assistance,” said Christina Bache, an associate researcher at the Brussels School of Governance. “The ‘D’ and the ‘P’ of the humanitarian-development-peace nexus will be completely eradicated.” And what should organizations do to lay groundwork for a more stable future? “I would start to engage in development education, in programs in [donor] countries and learn from what diaspora groups are doing,” said Leslye Rost van Tonningen, an independent consultant who has worked on new business development for a number of large INGOs. “This will help build relationships with home country citizens beyond ‘please give us money’ and could be critical to building long-term support for the global development agenda in donor countries.”