Policy Updates

On July 22, 2025, the US announced its decision to withdraw from UNESCO, citing concerns over the agency's perceived anti-Israel bias and promotion of divisive causes.

The US State Department stated the withdrawal, effective December 2026, was due to UNESCO's agenda and its admission of Palestine as a member state. This marks the third time the US has left the agency, having last rejoined in 2023 after a 2018 departure under the previous Trump administration. The US first left in 1984 due to security concerns around the Soviet Union before rejoining in 2003.

Alongside its cultural programming, UNESCO supports a number of education, SRHR education, literacy, clean water, and gender equality initiatives. It also helps set standards for ocean protection and AI ethics and protect cultural heritage and education in conflict zones.

UNESCO’s Director-General Audrey Azoulay noted her regret over the decision but stated it was anticipated. She denied the accusations of anti-Israel bias, pointing to the agency's work on Holocaust education and fighting antisemitism. Azoulay noted that the reasons cited by the US were the same as cited in the previous departure, despite significant changes and reduced political tensions within the organization.

The withdrawal will impact UNESCO's budget, as the US contributes 8% of its funding. However, the agency has diversified its funding sources and stated that it does not anticipate any immediate staff layoffs.

On 22 July 2025, Germany presented its third Voluntary National Review, reaffirming its commitment to accelerating implementation of the 2030 Agenda at the 2025 High-level Political Forum on Sustainable Development in New York.

Represented by Parliamentary State Secretary Dr. Bärbel Kofler and her colleague from the Federal Environment Ministry Rita Schwarzelühr-Sutter, Germany emphasized the need for stronger international cooperation in the face of climate change, geopolitical tensions, and economic shocks.

The German delegation highlighted national progress on SDG 5 (gender equality) and SDG 7 (renewable energy), attributing these achievements to broad participation from civil society, youth, academia, and local governments. Germany also hosted a side event on SDG 14 (ocean protection), which explored pathways to scale marine conservation and promote sustainable maritime economies.

Citing the UN’s 2025 SDG report, which warns that only 20% of goals will be met without acceleration, Germany stressed that global partnerships and inclusive implementation are vital to achieving the 2030 Agenda.

On July 21, 2025, analysis from the Lowy Institute interactive Southeast Asia Aid Map highlighted the impact that major US and European ODA cuts are set to have on South-East Asia’s LICs.

Australia continues to provide targeted assistance in areas such as gender, climate, and disability, but its overall ODA contribution remains low compared to other OECD countries. The Lowy Institute warns that without renewed commitments from Western donors, long-term climate adaptation and poverty reduction efforts in South-East Asia may suffer.

Stakeholders are encouraged to review ODA strategies to ensure effective and equitable support for the region.

On July 20, 2025, LDP and coalition partner Komeito lost their upper house majority in the House of Councillors recent elections, intensifying pressure on the minority government.

Opposition parties gained seats by promising tax cuts and welfare spending, resonating with voters frustrated by rising consumer prices, especially the cost of rice. The center-left CDP now held 37 seats, and the center-right DPP had 22. The far-right SNT, which ran a "Japanese first" campaign, expanded its presence from one to 14 seats.

Despite this, Japanese Prime Minister Shigeru Ishiba of the vowed to stay on as leader, focusing on critical tariff negotiations with the US before the August 1, 2025, deadline. The result followed earlier losses in the lower house and longstanding unpopularity within the LDP.

On July 18, 2025, US House Republicans approved a US$9 billion recissions package that clawed back approved funding for foreign assistance and public broadcasters, the first such bill signed in decades.

The original White House package sought US$9.4 billion in cuts, including US$8.3 billion for USAID and foreign assistance, and over US$1 billion for public broadcasters. Debates in the week prior to the House vote led to the exemption of US$400 million for PEPFAR after Republican moderates objected.

Some moderate Republicans criticized the process and lack of detail provided by the package, especially regarding a US$2.5 billion cut to the development assistance account that did not feature any information about the scope or sector of the proposed cuts.

On July 17, 2025, Italy delivered 800 tons of flour to Gaza under the Food for Gaza initiative in partnership with the WFP, this brings the total of allocated assistance from Italy to Gaza and the Occupied Palestinian Territories to EUR110 million (US$129 million) to address the humanitarian crisis and support development.

This shipment, routed via Jordan, follows Italy’s earlier donation of 15 trucks to support humanitarian distribution in the region. The Italy-funded project enables WFP to supply essential foodstuffs, such as sugar and flour, benefiting over one million civilians, particularly by supporting local bread production.

The total includes over 110 tons of direct assistance and EUR30 million (US$35 million) for field operations with international partners. This ongoing commitment highlights Italy’s continued support for vulnerable populations in Gaza.

On July 17, 2025, the EU unveiled the draft seven-year MFF proposing a significant increase in development funding, with the Global Europe instrument set to receive EUR200 billion (US$234.2 billion, which is a large increase from the current EUR92.3 billion (US$108.1 billion) allocation amount.

This 75% boost aims to strengthen the EU’s external action and development finance, despite ongoing debates about prioritizing European interests. Experts have voiced concerns about the lack of a clear definition of what constitutes as ODA, raising questions about transparency and accountability. Additionally, the flexible nature of the proposed budget means that funding levels may not be reliable or guaranteed for long-term development priorities.

The final budget, part of the 2028–2034 MFF, should be decided in December 2027. Stakeholders are encouraged to monitor the final outcome to ensure development objectives remain central to EU external funding plans.

On July 15, 2025, the Spanish Minister of Foreign Affairs José Manuel Albares announced nearly EUR62 million (US$73 million) in voluntary contributions to international organizations, reinforcing Spain’s multilateral support through AECID which will address key challenges such as food security, humanitarian assistance, climate change, and gender equality.

The contributions aim to accelerate development and humanitarian efforts, especially amidst global budget cutbacks, and complement previous packages approved this year. So far, Spain has allocated over EUR150 million (US$176 million) to 42 multilateral organizations in 2025, underlining its commitment to supporting vulnerable populations, sustainable development, and international cooperation.

Major recipients include UNICEF, UNFPA, FAO, the Climate Adaptation Fund, UN -Women, WFP, WHO, PAHO, UNRWA, UNHCR, and IOM, among others.

On July 14, 2025, US Secretary of State Marco Rubio began mass layoffs at the State Department as part of a reorganization aimed at creating a leaner foreign policy force.

Notices were sent to 1,107 civil servants and 246 foreign service officers, with nearly 3,000 expected to leave. The cuts have notably impacted the CARE office, responsible for Afghan relocations, and the bureau of population, refugees, and migration.

The move drew strong criticism from Democrats and former diplomats, who argue that downsizing puts national security at risk and threatens to worsen worldwide humanitarian crises. Rubio, also the presidential national security adviser, announced plans in April 2025 to eliminate 132 offices and merge 137 others within the State Department.

In early July 2025, Rubio formalized the closure of the USAID and transferred about 250 staff to the State Department. These staff appear mostly unaffected by the cuts, which have focused on offices previously slated for dissolution.

On July 14-15, 2025, JICA signed grant agreements worth a total ofJPY3.2 billion (US$22 million), one agreement of JPY2.5 billion (US$17 million) to the Republic of Vanuatu, and an agreement with UNICEF for the Project for the Eradication of Poliomyelitis in Afghanistan JPY714 million (US$5 million).

The agreement with the Republic Of Vanuatu aims to rebuild key economic infrastructure affected by the earthquake, promote disaster-resilient socio-economic development by reconstructing the Tagabe Bridge, and provide maintenance equipment. The program is led by MIPU and the Ministry of Health. The initiative seeks to contribute to the SDGs, specifically, SDG 9 (industry, innovation, and infrastructure), SDG 11 (sustainable cities and communities), and SDG 13 (climate action).

The Project for the Eradication of Poliomyelitis in Afghanistan, supports vaccine procurement and technical assistance to help reduce polio among children, and advance SDG 3 (good health and well-being).