Latest news with #developmentaid
Malay Mail
14 hours ago
- Business
- Malay Mail
Poverty rising, aid falling: UN summit confronts crisis of global solidarity
PARIS, June 28 — The United Nations summit on financing for development gets underway Monday in Seville under a grim cloud: multiple conflicts, humanitarian crises and the shock disengagement of the United States. Here is an overview of the challenges development aid faces, and changes in funding fortunes: Aid in general is down Official development assistance is down for the first time in six years. The amount granted by 32 wealthy countries of the Organisation for Economic Co-operation and Development (OECD) and the European Union decreased by 7.1 per cent in real terms last year to US$212.1 billion (RM896.9 billion), according to an OECD estimate. The US remained the top contributor in 2024 with US$63.3 billion, placing them ahead of Germany with US$32.4 billion, followed by Britain (US$18 billion), Japan (US$16.8 billion) and France (US$15.4 billion). The rankings are likely to change this year after US President Donald Trump's sudden gutting of USAID, the country's main foreign development arm. That has resulted in the elimination of 83 per cent of USAID programmes, including emergency aid or healthcare access. Ukraine getting less Since Russia's invasion in 2022, Ukraine has received significant funding, partly accounted for as humanitarian or development aid. In 2023, Kyiv was the top recipient country with US$38.9 billion received from OECD members, non-OECD countries, and multilateral organisations. But in 2024, the trend was down, with aid from OECD countries alone falling 17 per cent. Africa too Africa is the region of the world that concentrates the largest portion of international aid: US$68 billion, or a quarter of the global amount for 2023. However, preliminary figures for 2024 show a decrease in OECD countries' aid to Africa (down 1 per cent) and a more pronounced decline (3 per cent) to the least developed countries — a group of about fifty nations, overwhelmingly African, considered by the UN to be the most vulnerable. Debt is rising The total external debt of the group of least developed countries has more than tripled in 15 years, according to UNCTAD, the United Nations body for integrating developing countries into the global economy. These countries now generally spend more on repaying their external debt than for their education systems. Extreme poverty spreading Extreme poverty now affects more than 800 million people, living on less than US$3 per day, according to the World Bank. After decades of progress, extreme poverty, which is primarily concentrated in sub-Saharan Africa, is on the rise again. The impact of the Covid-19 pandemic, slower growth, indebtedness, conflicts and the effects of extreme weather are the main factors behind the increase. Worsening climate risks The poorest nations also have a growing need for funding to address climate change, as 17 of the 20 countries most vulnerable to global warming are also among the least developed. These include Chad, Eritrea, Afghanistan and Haiti. However, a significant portion of the aid intended for adaptation or combating global warming is granted to the poorest in the form of loans rather than donations, exposing them to the risk of falling into a trap of 'climate debt', according to UNCTAD. — AFP
News.com.au
a day ago
- Business
- News.com.au
UN conference seeks foreign aid rally as Trump cuts bite
Spain will host a UN conference next week seeking fresh backing for development aid as swingeing cuts led by US President Donald Trump and global turmoil hinder progress on fighting poverty, hunger and climate change. French President Emmanuel Macron, South Africa's Cyril Ramaphosa and Daniel Noboa of Ecuador will headline the around 70 heads of state and government in the southern city of Seville from June 30 to July 3. But a US snub at the Fourth International Conference on Financing for Development underlines the challenges of corralling international support for the sector. Joining the leaders are UN chief Antonio Guterres, more than 4,000 representatives from businesses, civil society and financial institutions, including World Bank head Ajay Banga. Such development-focused gatherings are rare -- and the urgency is high as the world's wealthiest countries tighten their purse strings and development goals set for 2030 slip from reach. Guterres has estimated the funding gap for aid at $4 trillion per year. Trump's evisceration of funding for USAID -- by far the world's top foreign aid contributor -- has dealt a hammer blow to humanitarian campaigns. Britain, France, Germany, the Netherlands and Belgium are among the other rich nations that have announced recent aid cuts as economic and security priorities shift and national budgets are squeezed. From fighting AIDS in southern Africa to educating displaced Rohingya children in Bangladesh, the retreat is having an instant impact. The UN refugee agency has announced it will slash 3,500 jobs as funds dried up, affecting tens of millions of the world's most vulnerable citizens. International cooperation is already under increasing strain during devastating conflicts in the Middle East and Ukraine, while Trump's unpredictable tariff war plunges global trade into disarray. - Debt burden - Reforming international finance and alleviating the huge debt burden under which low-income countries sag are key points for discussion. The budgets of many developing nations are constrained by servicing debt, which surged after the Covid-19 pandemic, curbing critical investment in health, education and infrastructure. According to a recent report commissioned by the late Pope Francis and coordinated by Nobel laureate economist Joseph Stiglitz, 3.3 billion people live in countries that fork out more on interest payments than on health. Critics have singled out US-based bulwarks of the post-World War II international financial system, the World Bank and the International Monetary Fund, for reform. Seville represents "a unique opportunity to reform an international financial system that is outdated, dysfunctional and unfair", Guterres said. At a preparatory meeting at UN headquarters in New York in June, countries except the United States unanimously agreed a text to be adopted in Seville. The document reaffirms commitment to achieving the 2030 UN sustainable development goals on eliminating poverty, hunger and promoting gender equality. It focuses on reforming tax systems, notably by improving the Global South's representation within international financial institutions. The text also calls on development banks to triple their lending capacity, urges lenders to ensure predictable finance for essential social spending and for more cooperation against tax evasion. The United States said it opposed initiatives that encroach on national sovereignty, interfere with international financial institutions and include "sex-based preferences". - Lack of ambition? - While the European Union celebrated achieving a consensus, NGOs have criticised the commitment for lacking ambition. For Mariana Paoli, global advocacy lead at Christian Aid, the text "weakens key commitments on debt and fossil fuel subsidies -- despite urgent calls from the Global South". "Shielded by US obstructionism, the Global North continues to block reform. This isn't leadership -- it's denial." Previous failures by rich countries to keep their promises have eroded trust. After promising to deliver $100 billion of climate finance a year to poorer nations by 2020, they only hit the target in 2022. Acrimonious negotiations at last year's UN climate summit in Azerbaijan ended with rich countries pledging $300 billion in annual climate finance by 2035, decried as too low by activists and developing nations. Independent experts have estimated the needs upwards of $1 trillion per year. Spain will be the first developed country to host the UN development finance conference. The inaugural edition took place in Mexico in 2002, followed by Qatar in 2008 and Ethiopia in 2015.
Asharq Al-Awsat
a day ago
- Business
- Asharq Al-Awsat
UN Conference Seeks Foreign Aid Rally as Trump Cuts Bite
Spain will host a UN conference next week seeking fresh backing for development aid as swingeing cuts led by US President Donald Trump and global turmoil hinder progress on fighting poverty, hunger and climate change. French President Emmanuel Macron, South Africa's Cyril Ramaphosa and Daniel Noboa of Ecuador will headline the around 70 heads of state and government in the southern city of Seville from June 30 to July 3. But a US snub at the Fourth International Conference on Financing for Development underlines the challenges of corralling international support for the sector. Joining the leaders are UN chief Antonio Guterres, more than 4,000 representatives from businesses, civil society and financial institutions, including World Bank head Ajay Banga. Such development-focused gatherings are rare -- and the urgency is high as the world's wealthiest countries tighten their purse strings and development goals set for 2030 slip from reach. Guterres has estimated the funding gap for aid at $4 trillion per year, reported AFP. Trump's evisceration of funding for USAID -- by far the world's top foreign aid contributor -- has dealt a hammer blow to humanitarian campaigns. Britain, France, Germany, the Netherlands and Belgium are among the other rich nations that have announced recent aid cuts as economic and security priorities shift and national budgets are squeezed. From fighting AIDS in southern Africa to educating displaced Rohingya children in Bangladesh, the retreat is having an instant impact. The UN refugee agency has announced it will slash 3,500 jobs as funds dried up, affecting tens of millions of the world's most vulnerable citizens. International cooperation is already under increasing strain during devastating conflicts in the Middle East and Ukraine, while Trump's unpredictable tariff war plunges global trade into disarray. Debt burden Reforming international finance and alleviating the huge debt burden under which low-income countries sag are key points for discussion. The budgets of many developing nations are constrained by servicing debt, which surged after the Covid-19 pandemic, curbing critical investment in health, education and infrastructure. According to a recent report commissioned by the late Pope Francis and coordinated by Nobel laureate economist Joseph Stiglitz, 3.3 billion people live in countries that fork out more on interest payments than on health. Critics have singled out US-based bulwarks of the post-World War II international financial system, the World Bank and the International Monetary Fund, for reform. Seville represents "a unique opportunity to reform an international financial system that is outdated, dysfunctional and unfair", Guterres said. At a preparatory meeting at UN headquarters in New York in June, countries except the United States unanimously agreed a text to be adopted in Seville. The document reaffirms commitment to achieving the 2030 UN sustainable development goals on eliminating poverty, hunger and promoting gender equality. It focuses on reforming tax systems, notably by improving the Global South's representation within international financial institutions. The text also calls on development banks to triple their lending capacity, urges lenders to ensure predictable finance for essential social spending and for more cooperation against tax evasion. The United States said it opposed initiatives that encroach on national sovereignty, interfere with international financial institutions and include "sex-based preferences". Lack of ambition? While the European Union celebrated achieving a consensus, NGOs have criticized the commitment for lacking ambition. For Mariana Paoli, global advocacy lead at Christian Aid, the text "weakens key commitments on debt and fossil fuel subsidies -- despite urgent calls from the Global South". "Shielded by US obstructionism, the Global North continues to block reform. This isn't leadership -- it's denial." Previous failures by rich countries to keep their promises have eroded trust. After promising to deliver $100 billion of climate finance a year to poorer nations by 2020, they only hit the target in 2022. Acrimonious negotiations at last year's UN climate summit in Azerbaijan ended with rich countries pledging $300 billion in annual climate finance by 2035, decried as too low by activists and developing nations. Independent experts have estimated the needs upwards of $1 trillion per year. Spain will be the first developed country to host the UN development finance conference. The inaugural edition took place in Mexico in 2002, followed by Qatar in 2008 and Ethiopia in 2015.
Japan Times
22-05-2025
- Business
- Japan Times
Sumitomo Mitsui among banks stepping up deals for blended finance
Sumitomo Mitsui Banking (SMBC) and Citigroup are among banks targeting new deals in the market for blended finance, defying a number of headwinds, including a significant decline in government spending on development aid. Deals blending public and private funds totaled $18 billion last year, down 21% from 2023, according to Convergence, a global network of more than 190 institutions and a data provider for blended finance. Over the past three years, banks doing the most blended-finance transactions include SMBC, Citigroup, BNP Paribas and Mitsubishi UFJ Financial Group, it said in a report released Wednesday. The deals tend to target environmental and social goals, and rely on public de-risking tools such as guarantees to attract private capital. With climate-focused transactions making up more than 60% of total financing last year, blended finance has been touted as key to raising the $300 billion in annual contributions pledged by countries at the COP29 climate summit in Baku, Azerbaijan, last year. Jeanne Soh, head of structured finance in Asia at SMBC, said she's seen rising interest in blended finance during the past few years. The bank has been working with various development-finance institutions and does around seven to eight deals a year, she said. SMBC is seeking to grow blended finance-related revenue by about 10% year-on-year, Soh said. "This is going to be a growth sector for us, and a key focus for the bank.' Citigroup, meanwhile, is looking into a type of blended-finance instrument that would allow sovereign issuers in emerging markets to refinance their debt and put savings toward developmental goals such as food security and education, said Stephanie von Friedeburg, a New York-based managing director in the bank's public-sector group. The market for these so-called debt-for-development swaps "is really starting to grow,' she said. At the same time, the market for blended finance faces a shortage of funds as richer nations, including the Netherlands and Germany, cut back on developmental aid. In the United States, President Donald Trump has taken a sledgehammer to USAID, which had been one of blended finance's most active investors. As a result, the market now finds itself "on a precipice,' Convergence CEO Joan Larrea said in an interview. Larrea also pointed to other problems that are hampering growth. Blended finance is "plagued by major issues,' she said. That includes a lack of strategy among donors to target private-sector funding, a failure to share data and insufficient standardized structures, which make it harder to scale and replicate transactions, she said.
Bloomberg
21-05-2025
- Business
- Bloomberg
Citi, Japan's Mitsui Among Banks Stepping Up Deals Blending Public and Private Funds
Citigroup Inc. and Sumitomo Mitsui Banking Corp. are among banks targeting new deals in the market for blended finance, defying a number of headwinds including a significant decline in government spending on development aid. Deals blending public and private funds totaled $18 billion last year, down 21% from 2023, Convergence, a global network of more than 190 institutions and a data provider for blended finance, said in a report published on Wednesday. Over the past three years, banks doing the most blended-finance transactions include SMBC, Citigroup, BNP Paribas SA and Mitsubishi UFJ Financial Group Inc., it said.
