America’s role in international aid has been turned upside down since January, with institutions shuttered, policies upended, and funding slashed. It is now unclear what lies ahead for American policy, the international aid system, or the world’s poorest. All we know is that a massive gap needs to be filled.
The situation is urgent. The World Bank recently revised up its estimate of people living in extreme poverty (on less than $3 per day) to 831 million – about 10% of the global population. Over half of the world’s extreme poor now live in fragile, conflict-affected states, and this figure is predicted to rise to two-thirds in the next five years. Nearly 40% of these countries’ populations already live on less than $3 per day, compared to 6% in other developing economies.
The International Rescue Committee (IRC) ran the numbers to determine which countries are most in need of aid. We came up with a list of 13, typified by Sudan, home to the world’s largest humanitarian crisis. While 29% of the world’s extreme poor live in these hardest-hit countries, only 9% of international aid is allocated to them, implying a $35 billion funding gap.
Since Russia’s full-scale invasion of Ukraine in 2022, Ukraine has become the biggest global aid recipient. Moreover, European countries are increasingly spending funds classified as ‘overseas aid’ on refugee integration at home. These outlays now account for around 14% of the total global aid bill, about the same as is spent on humanitarian aid.
So, even without US funding cuts, there would be a need for fresh thinking about how the aid sector works. First, we should focus grant aid – which accounts for more than 90% of the global aid budget (the rest being concessional loans) – on the poorest people in the poorest places. That means addressing the mismatch between the approximately 50% of the extreme poor who live in fragile and conflict-affected states, and the 25% of the global aid budget that goes to those countries.
Second, we need to devote resources to evidence-based, proven, cost-effective programming, like the community-based vaccine drive the IRC has pioneered in eastern Africa, where we delivered over 20 million doses for $2 each. We have also proposed a simplified protocol for treating moderate and severe acute malnutrition. In our study involving 27,800 acutely malnourished kids in Mali, we achieved cost savings of around 20%. But scaling up these approaches will require a change of mindset from donors, so that their efforts aggregate results, rather than diluting them.