Policy Updates

On March 26, 2025, it was reported that the US plans to end financial support for Gavi, terminating a grant valued at US$2.6 billion through 2030.

Gavi is estimated to have saved the lives of 19 million children since its creation 25 years ago. The US contributes about 13% of its budget.

The loss of US funds will set back Gavi's ability to continue providing basic services, like immunizations for measles and polio. By Gavi’s estimate, the loss of US support may mean 75 million children do not receive routine vaccinations in the next five years, resulting in over 1.2 million child deaths.

The US became the largest donor to Gavi during the COVID-19 pandemic. While European countries have historically provided significant funding, many have announced plans to reduce development spending. Japan, another major Gavi donor, has also struggled with a depreciating currency.

On March 26, 2025, a spreadsheet detailing which USAID projects will continue and which will end indicated that the US administration plans to continue 898 USAID awards and end 5,341.

A spokesperson for the State Department, now overseeing USAID, confirmed the terminations. Some grants for HIV and tuberculosis medications, and food aid for countries in civil wars and natural disasters will continue. Spending on health programs like HIV vaccinations is congressionally allocated, and it is unclear if the administration has the unilateral legal power to end them.

USAID funding has mostly been eliminated, with only 869 of 6,000 employees remaining active. Remaining programs are, according to the administration, valued at up to US$78 billion, but only US$8.3 billion is unobligated funds intended for future disbursement. This suggests a massive reduction from the previous annual USAID spend of US$40 billion.

Programs terminated include funding for the FAO, which monitors diseases transmitted from animals to humans in 49 countries. Major programs to track and fight malaria have also ended.

On March 19, 2025, reports emerged that officials from the US Trump administration have developed a proposal to overhaul the US international assistance and development architecture following the recent dissolution of USAID.

The plan aimed to create a more streamlined approach, positioning US efforts to better counter China's influence globally. Key components include renaming USAID to the US Agency for International Humanitarian Assistance, significantly narrowing its focus to global health, food security, and disaster response, while embedding it within the State Department.

The proposal also suggested consolidating the MCC and the US Trade and Development Agency under the US International Development Finance Corporation, creating a unified entity dedicated to promoting private sector investment in infrastructure, energy, and technology. Additionally, it proposes relocating politically oriented programs, such as democracy promotion and anti-human trafficking initiatives, under the State Department.

Criticizing existing US development programming as “inefficient and fragmented,” the plan advocated for a more targeted strategy that fosters stability in regions vital to US interests. It emphasizes setting end dates for aid programs, measuring their success, and proposed using blockchain technology for enhanced accountability. This proposal follows significant changes to USAID, indicating a potential revitalization of critical programs aimed at combating infectious diseases and ensuring food security.

On March 18, 2025, Peter Marocco, the person largely responsible for driving the dismantling of USAID, pronounced 'Phase II' of the US foreign assistance review done and returned to his role as director of the Office of Foreign Assistance at the State Department, where he is expected to maintain influence over the ongoing reconfiguration of USAID.

Marocco announced via email that Jeremy Lewin, a staffer from DOGE, has been appointed as the deputy administrator for management and resources and chief financial officer. Kenneth Jackson, a recent political appointee, has been appointed as the deputy administrator for management and resources and chief financial officer.

Marocco reflected in a missive on his tenure at USAID, asserting that the agency has become “accountable and stable,” and expressed his intention to restore value to American foreign assistance.

On March 18, 2025, the Bundesrat approved changes to the constitutionally enshrined debt brake, which allowed for a vote on March 21, 2025, approving an amendment outlining increased defense spending, a EUR500 billion (US$541.1 billion) infrastructure investment package, and the launch of a historic overhaul to boost defense and infrastructure investments.

The amendment was passed by the outgoing parliament with a two-thirds majority, circumventing the debt brake, which capped annual borrowing at 0.35% of GDP. This decision represents a political deviation from likely chancellor Friedrich Merz, who previously supported maintaining the debt brake.

The agreement comprises three pillars: defense spending capped at 1% of GDP, with additional financing through debt; a EUR500 billion (US$541.1 billion) special fund over 12 years for infrastructure, climate protection, and economic transformation; and increased borrowing leeway for federal states. Initiated by the Greens, the definition of defense spending now includes civil and disaster protection, intelligence, aid to countries attacked in violation of international law, and information security. The package includes EUR3 billion (US$3.2 billion) in military assistance for Ukraine, easing future constraints on support.

The increased fiscal leeway is expected to relieve the general budget by EUR20 billion (US$21.6 billion) in 2025, but development funding cuts remain likely due to CDU/CSU's insistence on budget consolidation. The CDU aims to reduce ODA spending to 0.35% ODA/GNI, but SPD pushback may keep it above 0.5%.

Economically, loosening the debt brake is projected to boost German growth, potentially increasing output by over 2% annually over the next decade.

On March 18, 2025, a federal judge ruled that DOGE efforts to dismantle USAID are likely unconstitutional.

Judge Theodore D. Chuang, of the US District Court for the District of Maryland, criticized Senior Advisor to the President Elon Musk’s unappointed role in the process, stating that it violated the Appointments Clause of the Constitution.

The Trump administration, with Musk’s involvement, had begun shutting down the USAID headquarters and terminating the vast majority of staff. The judge ordered an immediate halt to these actions and the restoration of system access for USAID staff.

However, the ruling also noted that such actions could continue with the express approval of a USAID official with the proper legal authority. Secretary of State Marco Rubio announced that he had taken control of the agency on February 3, 2025, delegating authority to Pete Marocco, the director of foreign assistance.

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 28, 2025, the UK government set out to reduce ODA from 0.5% to 0.3% of the GNI by 2027, or approximately GBP6 billion (US$7.8 billion), with the intention to bolster their defense spending.

This cut comes just 5 months after UK Primer Minister Keir Starmer promised at the UN that it would be a leading development contributor. This is further complicated by the fact that of this budget allocation, around 40% has historically been used to cover housing and administrative costs for refugees, meaning the true international ODA spending is far smaller.

On February 20, 2025, Dutch Minister for Foreign Trade and Development Cooperation Reinette Klever unveiled a significant overhaul of the Netherlands' development strategy, marking a decisive shift toward prioritizing national interests over traditional development programs.

Under the new policy, funding for initiatives supporting women's rights, higher education, sports, and culture will be eliminated, reflecting a broader trend of cutting back on sectors perceived as less 'directly beneficial' to Dutch taxpayers. Klever stated that all future development assistance must directly contribute to so-called 'Dutch interests', focusing specifically on trade, security, and migration concerns.

The strategic pivot entails a structural reduction of EUR2.4 billion (US$2.6 billion) annually from 2027, leaving EUR3.8 billion (US$4.1 billion) available for targeted aid that fosters trade partnerships and enhances safety in regions such as West Africa and the Middle East, where Klever noted 80% of global conflicts occur.

The sectors facing the most significant cuts were gender equality and cultural programs. Klever emphasized that the new approach aims to combat issues like people smuggling and provide support for refugees in their home regions, thereby alleviating migration pressures on the Netherlands. She expressed a preference for collaborating with smaller, locally based organizations rather than larger NGOs, which she deemed bureaucratic and inefficient. Despite the substantial cuts, Klever emphasized that the Dutch government is committed to continuing humanitarian assistance, ensuring that assistance reaches those in need effectively.

On February 18, 2025, JICA signed a Contribution Agreement with the IDB and IDB Invest, pledging up to US$1.5 billion to the TADAC.

This project aims to support private sector initiatives in the region to help narrow the financing gap for the SDGs commitments within the region, as out of 169 SDGs targets, the region is currently only on track to meet 30 by 2030.