Originally published in Fabian Ideas No. 670 (Promising Development: The Future of Aid in an Uncertain World)
It is impossible to look intelligently at the future of international development without accounting for the drastic changes that are taking place in the international system more broadly. To put it simply, the post-second world war order is collapsing. This process did not begin with the Trump presidency. In particular, double standards when it comes to enforcing international law, theoretically the bedrock of postwar interstate relations, have always existed. Now, however, they are clear for all to see, particularly in relation to the Palestinian occupied territories. The contrast between inaction in the face of genocide in Gaza, and the pressure for all countries to support sanctions against Russia, has created great cynicism, particularly in the global south, which represents the majority of humanity. Almost all countries agree that Russia’s invasion was a breach of international law, but many see the constant expansion of NATO as a significant provocation; one which doesn’t excuse, but does explain the war – and therefore offers the route to peace.
These developments, alongside the rise of China, a big rise in defence spending, cuts in overseas development assistance (ODA), US threats of massive trade tariffs, and an increasingly ineffective UN system dominated by western interests – has resulted in the world redividing into two blocs. The western bloc is increasingly unhappy, but feels the need to kowtow to Trump. The rest of the world is keen on multilateralism, but moving into the orbit of China rather than the US. Like the UN, the International Court of Justice and the International Criminal Court have been ignored, resisted and undermined. NATO has ceased to be a purely defensive organization – insofar as it ever was – and Europe, instead of welcoming US disengagement as an opportunity to adopt an independent foreign policy, is doing all it can to flatter and appease Trump’s demands for ever-increasing defence spending. Only Trump, with his usual inconsistency and lack of follow through, called for an end to the Ukraine /Russia War. Europe, with the UK as a leading player, seems to be focused on prolonging the war rather than searching for the best possible peace deal. This bitter war in Europe offers the prospect of two hostile armed camps for the long term. This has led to the promised rise in defence spending and cuts in ODA.
The truly existential threat facing humanity, however, is climate change and ecological collapse. It is the poorer countries that are currently suffering the worst effects, with droughts, floods and fires displacing people, undermining food production and increasing conflict. The most brutal consequences of climate change are disproportionately felt in Africa, the poorest continent. In the future, Africa will have a very young and growing population while the rest of the world ages and populations decline. Unicef projects that, by the end of the century, almost half the world’s children will live in Africa. With investment in health and education, this young population could be an enormous asset for the development of the continent.
The response of the US, UK and many European countries has been to drastically cut spending on development, remove the focus on the poorest people in the poorest countries, and to increase defence spending. Let us be clear: spending on development was always a very small fraction of spending on defence. It is not the case that development spending needed to be cut to increase defence spending. These decisions demonstrate a moral failure after the depredations of colonialism, but also a blindness to the risks of the future.
Before we discuss what is to be done, it is worth reminding ourselves of the proud record of previous Labour governments, particularly the last Labour government, in relation to international development. Tony Blair’s government established an independent department dedicated to development, which meant that the goal of a just and sustainable world order was taken forward across all Whitehall discussions up to cabinet level. DfID was gradually influencing attitudes across Whitehall, and was respected and influential throughout the international system as a source of strong ideas and good practice. This of course enhanced the UK’s reputation in general.
That reputation and experience has now dissipated in a process initiated by Boris Johnson closing DfID, cutting the aid budget and removing the focus on the needs of the poorest. Worse, he failed to reinstate the separate development section that had existed in the pre-1997 Foreign Office, with its own senior officials and permanent secretary, to preserve development expertise and maintain the capacity to challenge the misuse of ODA for national self-interest. The Starmer government has done nothing to improve matters. It has continued the Tory practice of paying for the hosting of asylum seekers with development funds and cut funding even further.
The international development system has major defects, though it did contribute to a measurable reduction of poverty from 1998 to 2023 – from one third of humanity to less than 10 per cent – and the UK made a serious contribution to this effort. But the massive cuts inflicted by the US and most western countries has brought it to a state of near collapse. This is an important moment which offers us two choices: fight to keep the system we have, or take this opportunity to drastically rethink how development should be organised. The Overseas Development Institute (ODI) has grasped this opportunity by organising a series of consultations, bringing together thinkers and practitioners to help us consider how to address challenges across the world. The consultations are designed to explore how, in this time of disruption, we can move forward to progress the long overdue changes that are needed.
One important point made during the consultations was the fact that the system has been expected to deliver multiple agendas, including countering China, stemming migration, averting climate catastrophe, and remedying past injustice. The result is a lack of focus on concrete achievements in the account given to the public and an impossible array of demands that cannot be satisfied. At the same time, recipient countries have lost faith and respect for the aid relationship. Young people, in particular, feel patronised by the framing of aid as charity, and argue that the focus on aid lets their own governments off the hook by shifting responsibility for providing proper public services to their people. There is also a growing enthusiasm in Africa for the Chinese model, which produced massive development across a continent in a very short time.
The growing spend on climate action – important as it is – has squeezed out funding for poverty reduction, which DfID and its allies did so much to put in place in the early years of the century. The case for separate funding for climate action is very strong, and even before we reach the point where there can be separate budgets, we should divide the small budgets that remain between action on climate change and the needs of the poorest people in the poorest countries, so that it is clear how much is being spent on each activity. As it is, the funds that are supposedly set aside for the poorest people are being raided to pay the cost of housing asylum seekers, action on climate change and providing help to Ukraine. One measure of how far the focus on poverty has moved is that in 2023 Ukraine became the largest ever recipient of aid for a single country. Despite being upgraded to middle-income status in 2024, in that year it received an amount equivalent to 86 per cent of the total received by Africa. This is not to argue that support should not have been provided to Ukraine; the question is: should the budget allocated for the poorest people have been raided for that purpose?
The immediate challenge for the aid and development sector will be managing the massive decline in ODA and protecting the most vulnerable by, wherever possible, narrowing the provision of ODA to the poorest countries with no alternative means of support.
Wherever possible, ODA should assist poor countries with weak institutions to build their health, education and water and sanitation systems so that, in the future, they will no longer be dependent on aid for these basic services. Funds that are sprinkled across the UN system, and to national development NGOs, should be reined in. There are simply too many actors in development, creating multiple demands on recipient countries and resulting in an unfocused array of well-intentioned but often ineffective programs. When creating a new system, there would be a strong case for halting all bilateral aid, which often carries narrow and distorting objectives championed by different countries. A new multilateral agency, with clear rules and objectives, could be more effective.
In the immediate term, and trying to work with much-reduced budgets, each country should focus much more tightly on the poorest people in the poorest countries and on urgent humanitarian aid to help people survive desperate emergencies. This latter budget is steadily growing as crises proliferate. ODI suggests that, in the longer term, the concept of overseas development assistance (ODA) should be scrapped altogether and replaced by global public investment funds with new structures and clarity of purpose.
Development work will be very difficult for the foreseeable future because of the massive shortage of funds, but development practitioners should do all they can to bring their limited funds back to focus on the poorest people. There is little probability in the near future that more funding will be provided, but as catastrophes proliferate, it is likely that countries will look again to development efforts to try to prevent the chaos and massive displacement of people that will otherwise inevitably take place. Deep analysis must begin now, so that we can build the more effective system that is needed when suitable funding and political will becomes available once more
