David Miliband: The Future of International Aid
Since January, the role of the United States in international aid has turned upside down, with institutions closing, policies being revoked, and funding being slashed. It is now unclear what awaits U.S. policy, the international aid system, or the poorest people in the world. The one thing we know for sure is that there is a massive gap that needs to be filled.
The situation is critically urgent. Recently, the World Bank revised its estimates of people living in extreme poverty (on less than $3 a day) to 831 million — about 10% of the global population. In fact, more than half of those in extreme poverty worldwide now live in fragile countries affected by conflict, and this number is expected to rise to two-thirds in the next five years. Nearly 40% of the population in these countries already lives on less than $3 a day, compared to about 6% in other developing economies.
In this context, my organization, the International Rescue Committee (IRC), has been analyzing the numbers to identify the countries most in need of aid. We came up with a list of 13 countries, led by Sudan, home to the largest humanitarian crisis in the world. While 29% of the world’s extreme poor reside in these most conflict-affected countries, only 9% of international aid is allocated to them, creating a funding gap of $35 billion.
Since Russia’s full-scale invasion of Ukraine in 2022, Ukraine has become the largest recipient of global aid. Moreover, European countries are increasingly spending funds categorized as “foreign aid” on integrating refugees domestically. These expenditures now represent about 14% of the total global aid bill, nearly equivalent to what is spent on humanitarian aid.
Therefore, even without U.S. funding cuts, a new way of thinking about how the aid sector operates is necessary. First, we should focus the aid we provide — which constitutes over 90% of the global aid budget (with the remainder being concessional loans) — on the poorest people in the poorest places. This means addressing the mismatch between almost 50% of the extreme poor living in fragile and conflict-affected countries and the 25% of the global aid budget allocated to those areas.
Second, we need to dedicate resources to evidence-based, tested, and cost-effective programs. An example is the community vaccination campaign led by the IRC in East Africa, where we supplied over 20 million doses at $2 each. We also proposed a simplified protocol for treating moderate and severe acute malnutrition. In our study involving 27,800 children suffering from acute malnutrition in Mali, we achieved nearly 20% cost savings. However, scaling these approaches requires a shift in donor mentality, ensuring their efforts lead to widespread results rather than diluting them.
Third, we need more creativity in programming, financing, and delivery. For instance, the IRC is currently using artificial intelligence to reduce the time needed to diagnose monkeypox in Africa from two weeks to five minutes. We have also demonstrated how technology can facilitate remarkable educational outcomes for children whose schooling has been disrupted due to conflict and disasters.
Creativity naturally demands new capital commitments. For example, disaster risk financing, such as parametric insurance paid out as soon as disaster triggers occur, facilitates rapid and predictable support flows. We should also work to introduce debt swaps in humanitarian action. Such methods have already been used to finance environmental improvement projects worth $1.7 billion in seven countries.
Fourth, we need accountability for outcomes, not inputs, to reduce bureaucracy, increase flexibility, enhance value for money, and drive creativity and innovation. Governments and international institutions should follow Sweden’s example, which holds us accountable for the outcomes we achieve. What matters is educational attainment, not the number of trained teachers, and healthy births, not the number of health consultations for newborns.
Fifth, we must align the burden of aid with the composition of the global economy. The United States represents 25% of global income, but its share of national income allocated for foreign aid does not exceed 0.22%, a figure expected to decline after recent cuts. Nonetheless, in a survey conducted in February, around 89% of Americans stated that 1% of the federal budget should go to foreign aid. Given that this figure aligns closely with current actual spending, maintaining this funding could be a unifying mission for America and Americans.
Today, 80% of children suffering from acute malnutrition in conflict areas do not receive treatment, and 60% of maternal deaths during childbirth occur in fragile states, while 85 million children in these countries do not attend school. Effective international aid is the solution to these challenges, not the problem. Humanity’s current resources for doing good are greater than ever in history, and it is up to us to use them wisely. Allocating 1% of the federal budget is not an exaggeration. This funding can be utilized to its utmost effect, and it is in America’s interest to do so. The sooner it is acted upon, the better.
