Which countries could be most affected by US aid cuts?
With the United States cutting its aid, which countries are at most risk? Devex analyzed the numbers and identified the countries that may feel the impact of the cuts on their economy.
For years, the U.S. Agency for International Development has been the main channel for U.S. development spending. But with the U.S. government scrapping 85% of USAID programs, it will only be a matter of time until the world feels the full force of the cuts. Devex recently provided an analysis of the countries that are most vulnerable to reductions in aid spending. This new analysis offers deeper insight into the countries most at risk from cuts specifically to USAID, by comparing a country’s government spending to its official development assistance, or ODA, received from the U.S. This is because the more a country spends domestically on its own development, the less sensitive it will be to shifts in development spending by countries from the global north. In order to tell which countries are at risk, we compared recorded ODA data from the creditor reporting system in grant equivalent terms from the Organisation for Economic Co-operation and Development, and the general government final consumption expenditure from the World Bank. All values were converted into 2022 constant prices. How did we calculate the risk? There is no existing uniform standard when it comes to analyzing how at risk a country is based on its government spending and received ODA. For the purpose of this analysis, countries that have 25% or above of ODA received from the U.S. as a percentage of government expenditure are considered high risk, which implies that the local economy will take a significant blow from the aid cuts. Those with 10%-24% are considered medium risk, meaning that the country will certainly feel the effects of the aid cuts, but it will still have some wiggle room to adapt. While this approach provides an estimate, other factors such as political, economic, and institutional factors should also be taken into consideration for a country’s resiliency to aid shocks. Which countries are at risk? Somalia, the Central African Republic, and Afghanistan are the most at-risk countries, according to our measures. All of them receive more ODA from the United States than the local governments spend. Somalia is the most vulnerable of the three, as ODA received from the U.S. accounts for 122.8% of its government expenditure. The Democratic Republic of Congo, Mozambique, Sierra Leone, and Ukraine are considered medium-risk countries. Ukraine, despite the relatively high government spending, is also tagged as medium-risk because of the $11.4 billion it received from the U.S. <div class='tableauPlaceholder' id='viz1745229041997' style='position: relative'><noscript><a href='#'><img alt='Dashboard 1 ' src='https://public.tableau.com/static/images/US/USODAvsGovernmentSpending/Dashboard1/1_rss.png' style='border: none' /></a></noscript><object class='tableauViz' style='display:none;'><param name='host_url' value='https%3A%2F%2Fpublic.tableau.com%2F' /> <param name='embed_code_version' value='3' /> <param name='site_root' value='' /><param name='name' value='USODAvsGovernmentSpending/Dashboard1' /><param name='tabs' value='no' /><param name='toolbar' value='yes' /><param name='static_image' value='https://public.tableau.com/static/images/US/USODAvsGovernmentSpending/Dashboard1/1.png' /> <param name='animate_transition' value='yes' /><param name='display_static_image' value='yes' /><param name='display_spinner' value='yes' /><param name='display_overlay' value='yes' /><param name='display_count' value='yes' /><param name='language' value='en-US' /></object></div> <param name='device' value='desktop' /><param name='showShareOptions' value='false' /> <script type='text/javascript'> var divElement = document.getElementById('viz1745229041997'); var vizElement = divElement.getElementsByTagName('object')[0]; if ( divElement.offsetWidth > 800 ) { vizElement.style.width='590px';vizElement.style.height='617px';} else if ( divElement.offsetWidth > 500 ) { vizElement.style.width='590px';vizElement.style.height='617px';} else { vizElement.style.width='100%';vizElement.style.height='727px';} var scriptElement = document.createElement('script'); scriptElement.src = 'https://public.tableau.com/javascripts/api/viz_v1.js'; vizElement.parentNode.insertBefore(scriptElement, vizElement); </script> <i style=font-style: georgia;”>Map of the most at-risk countries based on ODA received from the U.S. vs. government spending</i> Try out Devex Pro Funding today with a free five-day trial, and explore funding opportunities from over 850 sources in addition to our analysis and news content.
For years, the U.S. Agency for International Development has been the main channel for U.S. development spending. But with the U.S. government scrapping 85% of USAID programs, it will only be a matter of time until the world feels the full force of the cuts.
Devex recently provided an analysis of the countries that are most vulnerable to reductions in aid spending. This new analysis offers deeper insight into the countries most at risk from cuts specifically to USAID, by comparing a country’s government spending to its official development assistance, or ODA, received from the U.S.
This is because the more a country spends domestically on its own development, the less sensitive it will be to shifts in development spending by countries from the global north.
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Alecsondra Si is a Junior Development Analyst at Devex. She analyzes funding data from bilateral and multilateral agencies, foundations, and other public and private donors to produce content for Devex Pro and Pro Funding readers. She has a bachelor’s degree in International Studies - major in European Studies from De La Salle University, Manila, Philippines.
