Policy Updates

On July 21, 2025, ABC News reported new analysis from the Lowy Institute showcasing their interactive Southeast Asia Aid Map which highlights 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, Japanese Prime Minister Shigeru Ishiba of the LDP and coalition partner Komeito lost their upper house majority in the House of Councillors recent elections, intensifying pressure on his 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 centre-left CDP now held 37 seats, and the centre-right DPP had 22. The far-right SNT, which ran a "Japanese first" campaign, expanded its presence from one to 14 seats.

Despite this, Ishiba 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, the EU unveiled the MFF, the draft seven-year budget, proposing a significant increase in development funding with the Global Europe instrument set to receive EUR200 billion (US$234.2 billion) up from the current EUR92.3 billion (US$108.1 billion) allocation.

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 17 July, 2025, 800 tons of flour funded by Italy were delivered 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 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, and 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).

On July 13, 2025, campaigners and ODA experts urged the Labour government to fulfil its pledge to restore the UK’s global leadership in international development in a Guardian editorial, which emphasized the urgency of reversing cuts and addressing worsening global inequalities.

The editorial notes that, in the first half of 2025, key donors, including the UK, have continued to reduce ODA budgets, while many LICs now spend more on debt repayment than on healthcare or education. Campaigners argue that Labour should prioritize debt relief, reform international tax systems, and support grassroots-led solutions.

Romilly Greenhill, CEO of Bond, stressed that the global economic system is broken and requires immediate reform. Diana Francis of Peace Direct underlined the growing interconnection between climate breakdown, conflict, and underfunded humanitarian responses, adding that solidarity and cooperation are more important than ever.

The editorial calls on Labour to act decisively - or risk falling short of its own promises.

On July 11, 2025, JICA and the UNDP hosted a two-day demonstration in Ukraine to showcase advanced technologies supporting humanitarian mine action, which was held in collaboration with the SESU and featured:

• ALIS, a Japanese-developed ground-penetrating radar system, presented by its inventor Prof. Motoyuki Sato;
• Heavy demining machinery donated by Japan through JICA; and
• AI -powered drone-based scanning developed by Ukrainian company UADamage

Participants included representatives from Ukraine’s Ministry of Economy, SESU, national mine action operators, and UNDP staff. The demonstration aimed to enhance local capacity and inform the operational deployment of new technologies.

UNDP Ukraine emphasized the importance of innovation in accelerating safe, effective demining, while JICA reiterated Japan’s commitment to supporting Ukraine’s humanitarian mine action.