Policy Updates

On April 9, 2025, the CDU/ CSU and SPD parties in Germany finalized their coalition treaty, where Chancellor-designate Friedrich Merz, Bavarian Minister-President Markus Söder, and SPD Co-Chairs Lars Klingbeil and Saskia Esken presented an agreement that focuses on Germany’s global leadership, economic modernization, and migration control.

Key highlights include:

• BMZ remaining independent: The BMZ will retain its independent status, with Minister Svenja Schulze expected to continue her leadership. This decision reflects advocacy efforts from various stakeholders and ensures BMZ’s role in Germany’s development policy;
• ODA target revised: For the first time in 30 years, the 0.7% ODA/ GNI target has been excluded from the coalition treaty. Instead, the treaty calls for reducing the ODA quota to consolidate the federal budget. Germany’s ODA contribution was 0.82% of GNI in 2023 but saw a EUR940 million (US$1 billion) cut to BMZ ’s budget in 2024. Voluntary contributions to international organizations are also set to decrease;
• A new development policy approach: The treaty outlines a shift toward aligning development policy with Germany’s geopolitical and economic interests. It calls for consolidating development-related responsibilities under BMZ leadership, potentially including initiatives like the International Climate Initiative, currently housed in the BMWK;
• Strengthened inter-ministerial cooperation: The treaty emphasises better coordination across BMZ, the AA, and the BMVg to improve policy coherence and align development efforts with strategic objectives;
• Commitment to sovereign debt and tax systems: The treaty reaffirms support for resolving sovereign debt crises and strengthening tax systems in developing countries, aligning technical and financial cooperation with European development policy; and
• The climate sections remaining unchanged: The climate sections remain consistent with earlier drafts, with a focus on domestic action over international initiatives.

This coalition treaty signals a strategic pivot in Germany’s development policy, prioritizing geopolitical alignment and fiscal consolidation.

On March 28, 2025, the US administration announced plans to merge USAID into the State Department, dissolving it as an independent agency and reducing staffing to a statutory minimum of 15 positions, and additionally detailed specific cuts to USAID grants and multilateral funding.

Congress must pass new legislation to officially eliminate the agency. The State Department will create an Office of Global Food Security to manage food security and humanitarian programs previously handled by USAID. The remaining global health programs will be supervised by the Bureau of Global Health Security and Diplomacy. Other programs will be managed by regional bureaus within the State Department.

Deputy administrator of policy and programs at USAID Jeremy Lewin informed staff that employment contracts would be severed by July 1 or September 2, 2025. By July 1, 2025, the State Department will fully take over USAID’s remaining programming. By September 2, 2025, USAID’s operations will transfer to State or shut down completely.

The administration also provided Congress with documents listing 5,341 terminated USAID programs and 898 active ones, detailing that 86% of programs have been terminated, slightly more than the 83% cut reported on March 10, 2025. The total value of terminated programs is US$75.9 billion, with US$48.2 billion already obligated and US$27.7 billion yet to be assigned.

UN institutions and other multilaterals saw steep cuts, with terminated awards totaling US$4.1 billion to 14 UN agencies, the IBRD, and Gavi.

On March 10, 2025, Norway announced agreements worth NOK 248 million (US$ 23.14 million) to support 27 renewable energy projects, involving both Norwegian and international companies.

Norwegian Minister of International Development Åsmund Aukrust emphasized that these investments are vital for reducing poverty and achieving global climate goals, aiming to enhance access to clean energy, create jobs, and stimulate economic growth.

Administered by Norad, the business support scheme for renewable energy is announced annually and encourages private investment in clean energy solutions. Norad Director General Bård Vegar Solhjell noted that early-phase support has been crucial for significant investments in the sector.

The funding will be directed towards solar, wind, hydropower, and clean cooking stove projects in countries such as Zambia, Nigeria, Malawi, Cameroon, Uganda, Senegal, South Africa, Indonesia, and Nepal.

On February 1, 2025, the UK government has announced GBP22 million (US$26 million) in additional humanitarian assistance for Myanmar in 2024-2025 to support nearly one million vulnerable people.

This funding will provide essential healthcare, nutrition assistance, and treatment for diseases such as tuberculosis and malaria. The support will also strengthen climate resilience by improving food security, water management, and disaster preparedness, helping communities withstand extreme weather events.

On January 24, 2025, the UK government’s discussions within the House of Commons on the Climate and Nature Bill were suspended.

This bill would make it legally binding for the UK to meet its international climate agreements. It was originally introduced by Liberal Democrat Roz Savage and was prevented over concerns from the Labour party that it was too ambitious and was unlikely to be upheld.

On January 17, 2025, JICA announced a new partnership with the AIIB which aims to support infrastructure development in Asia, with a focus on enhancing sustainable and resilient infrastructure to address regional challenges.

JICA and AIIB will jointly finance projects and share expertise to promote economic growth, environmental sustainability, and poverty reduction in Asia.

On December 17, 2024, the Government of Japan committed US$10 million for the Project for the Recovery of Maternal and Child Health Equipment in flood-affected areas of Khyber Pakhtunkhwa and US$19 million for the Flood Management Enhancement Project in the Indus Basin. The agreements were signed in Islamabad between Japanese officials and Pakistan’s Ministry of Economic Affairs.

The health project focuses on equipping 21 facilities in the Hazara Division to reduce maternal and neonatal mortality rates by improving medical services such as institutional deliveries, caesarean sections, and ultrasound examinations by 2029. It aims to enhance care quality, boost trust in the healthcare system, and ensure equitable access to high-quality services in Khyber Pakhtunkhwa province.

The flood management project will install 45 hydrological and hydraulic observation networks in Khyber Pakhtunkhwa and Punjab and rehabilitate river structures to mitigate economic losses from flash floods in the Indus River basin. Integrating the "Build Back Better" approach strengthens disaster resilience and improves river management data. Japan’s contributions align with its US$77 million pledge made at the Geneva Conference, underscoring its commitment to improving health and disaster preparedness in Pakistan.

On December 17, 2024, the German political parties published their election programs ahead of the February 2025 elections, showing clear differences in their proposals for development cooperation and humanitarian assistance.

The two remaining parties of the governing coalition, the left-leaning SPD and the Greens, both embraced independent development cooperation, led by a strong, independent BMZ.

The center-right opposition party CDU/CSU, by contrast, proposed bringing development cooperation, led by the BMZ, and humanitarian assistance, led by the AA, together. The liberal FPD originally put forth the proposal to merge the BMZ and the AA.

The SPD and Greens emphasized Agenda 2030 and multilateralism as guiding principles and highlighted their continued commitment to 0.7% ODA/GNI. The Greens also proposed leveraging additional funding for climate goals. The CDU/CSU and FPD made no such commitments.

All parties, but the CDU/CSU in particular, stressed a shift to align development with German interests. The CDU/CSU noted its ambition to gear development towards migration management, with criteria intended to stem irregular migration flows. The party also sought to link development to geopolitical and security goals, as well as economic aims and the promotion of international trade.

The SPD and Greens noted their desire to maintain Germany's feminist foreign and development policy, and listed their commitments for global health, climate, and agriculture. The CDU/CSU and FPD did not specifically mention policy aims for health, climate and agriculture, but stated that they will focus on women's rights as part of development policy.

On December 9, 2024, the Norwegian Ministry of Foreign Affairs presented its new strategy for Norway’s engagement in the Sahel region.

Norway has been actively involved in the Sahel for decades, providing significant humanitarian and development assistance. Recent years have been marked by growing instability, violent extremism, and human suffering due to conflict, climate change, and weak structural governance.

The Sahel region, as defined by the strategy, includes Burkina Faso, Mali, Mauritania, Niger, Senegal and Chad. This new approach will guide Norway’s efforts in the region through 2030.

With substantial ODA already allocated to these nations, the strategy outlines how Norway aims to help reverse negative trends and establish a foundation for long-term sustainable development.

A key element of the strategy is the establishment of a Norwegian embassy in Dakar, Senegal. This step will provide a broader regional perspective for Norway’s Sahel engagement and allow for preventive efforts in neighboring coastal states.

The strategy prioritizes three main areas of focus:

• Humanitarian response and sustainable development: Addressing urgent humanitarian needs, supporting local resilience, preventing irregular migration and promoting inclusive sustainable development;
• Peacebuilding and stabilization: Preventing and combating violent extremism, supporting peacebuilding and stabilization efforts and encouraging the participation of women and youth in peace and security initiatives; and
• Democracy and gender equality: Promoting good governance, mobilizing national resources, fostering democratic development, and upholding human rights and gender equality.

On December 9, 2024, the EC initiated the 9^th edition of the Raw Materials Week, an event that brings together stakeholders from industry, administration, civil society, research and academia to discuss policies and initiatives in the field of raw materials.

Experts from various strategic sectors discussed how to foster domestic capacities, finance and derisk projects, stimulate research and innovation and improve critical raw materials circularity. The participants discussed the implementation of the Critical Raw Materials Act, which aims to bring a secure and sustainable supply of materials for European industry by using strategic partnerships to diversify supplies.

The High-Level Conference on Raw Materials will take place on December 11, 2024, and will be streamed online. EC Executive Vice-President for Prosperity and Industrial Strategy Stéphane Séjourné will explain his vision for the EU's raw materials policy. On December 12, the EC will discuss raw materials projects in the Minerals Security Partnership Forum, which is a platform for cooperation on critical raw materials for the global green and digital transitions.

The week includes specific sessions on investment opportunities in Canada, Greenland, Australia, Brazil, Kazakhstan, Uzbekistan, Norway, Zambia, the Democratic Republic of Congo, and South Africa.