Billions worth of the cuts announced to aid budgets predicted to lead to “catastrophic outcomes”

By Hisham Allam

Billions worth of the cuts announced to aid budgets predicted to lead to “catastrophic outcomes”

Recent decisions by donor countries to reduce international aid budgets have sent shockwaves through the humanitarian sector. The Netherlands, following in the footsteps of the UK and Germany, has announced significant reductions to its development aid budget, signaling a broader shift in global priorities. This, experts warn, could strike a serious blow mainly to the education and healthcare sectors, triggering “catastrophic outcomes” for the development sector.

Reinette Klever, the Dutch Foreign Trade and Development Minister, said that the Netherlands would lower its aid expenditure by around €1 billion over five years while simultaneously changing NGO financing practices to promote efficiency and reduce reliance on government support. Klever stated:

“As we promised, the government is decreasing its development aid budget. I’m making clear priorities.”

This decision mirrors a global trend whereby donor countries are prioritizing domestic concerns over international issues which raises serious reservations about the viability of international aid.

Adnan Abu Hasna, media advisor and spokesperson for the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), told DevelopmentAid that these cuts could have serious ramifications for humanitarian efforts. He noted that UNRWA was facing a financial crisis, notably due to the lack of US financing which had previously typically provided US$350 million a year.

Abu Hasna stated: “The financial strain means potential cuts to vital services such as health, education, and emergency relief, which are lifelines for millions of refugees.”

He also emphasized that UNRWA’s reliance on voluntary donations – which account for 95% of its budget – made it extremely sensitive to such trends.

“We’ve reached the limit of austerity measures,” he explained, “further reductions could result in catastrophic outcomes, particularly in education and healthcare.”

The broader impact of aid cuts has been further illustrated by recent developments in Germany and the UK. Germany, the second-largest humanitarian aid donor since 2019, plans to cut €1 billion from its humanitarian aid budget, which includes a 50% reduction in its support for life-saving initiatives. Similarly, UK aid spending could drop to just 0.36% of gross national income – the lowest level since 2007 – primarily due to increasing domestic refugee costs. Combined, these two countries account for 12-15% of global humanitarian aid, supporting hundreds of programs worldwide in areas such as food security, health, and education. These reductions are expected to lead to program closures, staff reductions, and decreased capacity in already vulnerable regions.

Dr. ASM Mostafizur Rahman, a political scientist at Heidelberg University, emphasized that the rise of right-wing populism globally has influenced these policy shifts, as seen in the Netherlands’ focus on reducing aid for lobbying activities and increasing self-reliance among NGOs. Drawing from his extensive research on aid dynamics, Rahman told DevelopmentAid:

“The focus on domestic priorities at the expense of international aid marks a significant departure from traditional liberal policies. This trend not only threatens sustainable development initiatives but also risks undermining regional stability.”

He pointed to Sweden’s aid initiatives in Bangladesh as an example of the effective deployment of resources, contrasting this with the emerging inward-focused agendas of other donor nations.

Rahman added that these aid reductions will hinder progress toward the 2030 Sustainable Development Goals, particularly in education, gender equality, and poverty reduction.

“We are witnessing a pivotal moment,” Rahman said. “The ripple effects of these decisions could exacerbate global inequalities and destabilize vulnerable regions.”

Abu Hasna echoed similar concerns, underscoring the political challenges faced by UNRWA in the Near East. He explained that ongoing campaigns to delegitimize the organization, including accusations of links to terrorism, have compounded its funding challenges.

“These narratives not only harm our reputation but also jeopardize critical programs that connect millions of Palestinian refugees to global human rights standards,” he commented.

This global shift has raised serious questions regarding the balance between national interests and international responsibilities. While some governments, like the Netherlands, aim to streamline funding frameworks and empower local organizations, the overarching reduction in aid budgets leaves a void that threatens to disrupt essential humanitarian programs. As Abu Hasna warned:

“This trend of reduced funding comes at a time when the need for increased support has never been greater.”