Attacks on world order, global aid hits progress on poverty

UN General Assembly in session. UN Media

Penang, 26 Jun (Kanaga Raja) — Unprecedented cuts to global aid and intensifying attacks on multilateralism are undermining decades of progress in the fight against poverty, a United Nations human rights expert has warned.

In his report (A/HRC/59/51) to the 59th regular session of the UN Human Rights Council, currently taking place in Geneva, Mr Olivier De Schutter, the United Nations Special Rapporteur on extreme poverty and human rights, urged governments attending the Fourth UN International Conference on Financing for Development (FFD4) in Seville, Spain on 30 June-3 July, to prioritise financing social protection through wealth taxes, “solidarity levies” and other innovative financing tools to prevent further backsliding.

“As countries turn their backs on international cooperation, we are witnessing a terrifying domino effect of cuts to global aid, with one country after the next announcing major reductions to their aid budgets,” said the rights expert.

“The world order that emerged from the horrors of the Second World War has lifted hundreds of millions of people out of poverty. In just a few short months, that progress has begun to wildly unravel,” De Schutter said.

“It is a sad reflection of our times that money once earmarked for life-saving development programmes are now being redirected to defence and military spending,” the Special Rapporteur pointed out.

De Schutter noted that official development assistance fell in 2024 for the first time in six years, with predictions estimating a drop of almost 20% for 2025.

In his report, De Schutter detailed how these cuts are hampering humanitarian assistance and deepening poverty, leaving vulnerable populations increasingly exposed to the intensifying climate crisis.

“It is a perfect storm: cuts to global aid as the climate crisis ramps up and wipes out people’s entire livelihoods and assets in mere minutes,” the Special Rapporteur said.

He said that his present report has come “at a time when multilateralism is under attack and when international solidarity is facing threats unprecedented since the Second World War.”

De Schutter called for a reset ahead of FFD4 and the Second World Summit for Social Development, to be held in Doha from 4 to 6 November 2025.

He said that most urgently, Governments must take a stand against attempts to undermine global solidarity by living up to their pledges to support low-income countries in strengthening the financing and operation of social protection as a powerful tool in countering the effects of climate change.

“For while Governments can procrastinate, while oligarchs can win elections and while authoritarian regimes can seek to hide scientific data, environmental collapse continues unabated,” said De Schutter.

He said it is in low-income countries and for the most vulnerable populations, where – despite having contributed the least to carbon emissions – the death and destruction will be greatest and the capacity to respond weakest.

“However much the world would like social protection to be strengthened in low-income countries in order to fulfil its role in protecting people in poverty from climate risks, progress will only be achieved with increased international support,” he pointed out.

Pointing to a breakdown in solidarity, the rights expert said that in the United States, the new administration that took office on 20 January 2025 adopted on day one an Executive Order entitled “Reevaluating and realigning United States foreign aid”, suspending foreign development assistance for 90 days to facilitate an “assessment of programmatic efficiencies and consistency with United States foreign policy”.

On 24 January 2025, the Department of State sent to all contracting and agreement officers and implementing partners of the United States Agency for International Development (USAID), and to all other relevant agencies and internal offices, a “Notice of implementation of executive order on reevaluating and realigning United States foreign aid”, including stop-work orders and an instruction to amend or suspend existing awards.

“The choice of the United States to turn away from international cooperation is shocking. It is costing lives all over the developing world,” De Schutter emphasized.

But while the example of the United States is extreme, this worrying trend is not limited to one country, he said.

Between 1990 and 2022, the share of European Union aid going to the least developed countries decreased from 52 per cent to 19 per cent of the total and the slide continues, he noted.

According to some estimates, the average reduction of support across the least developed countries could amount to 35 per cent for the period 2025-2027, when compared to the amounts allocated for the period 2021-2024, the Special Rapporteur said.

He said the focus of the European Union is increasingly on the so-called Global Gateway: investments that are of strategic importance to the European Union and that will facilitate access to critical minerals in particular, rather than on forms of support that could contribute the most to poverty reduction.

He also said that with a few exceptions, European Union member States are reducing, sometimes drastically, the budget dedicated to official development assistance (ODA).

Germany, for instance, cut 2.7 billion euros from its foreign development budget in the period 2023-2024 and 930 million euros from its humanitarian aid budget.

According to the report by the Special Rapporteur, France, which has been regularly increasing its aid budget in recent years and had set an objective of reaching 0.7 per cent of its gross national income in ODA by 2025, has postponed that target and has instead reversed that trend: French ODA diminished by 742 million euros in 2024 and by a further cut of more than 2 billion euros in 2025.

Indeed, De Schutter said that further cuts can be expected to be announced in 2025.

Many countries of the Organisation for Economic Co-operation and Development facing high levels of debt are adopting austerity measures, which will include reductions in aid spending, he noted.

European countries, in particular are reallocating significant budgets to defence spending, in order to take into account the new threats to peace and security resulting from “neo-imperialist expansionism”, he said.

The decision announced by the United Kingdom in February 2025 to cut its development budget from 0.5 per cent of gross domestic product (GDP) to 0.3 per cent, in order to raise the defence budget from 2.3 per cent of GDP to 2.5 per cent, is an illustration of that trend, said the Special Rapporteur.

It is against that background and that trend that the rights expert called for a re-commitment to multilateralism.

He said in the 26 poorest countries on the planet, only 9.7 per cent of the population enjoys even minimal social protection, the main reason for such low coverage being insufficient fiscal space.

According to De Schutter, while lack of political will, low administrative capacity and the weight of the informal sector are also important explanatory factors, financing remains key.

He said if those countries benefited from higher levels of international support, rather than being punished by rating agencies and external creditors for investing in social protection, they would be more willing to make progress and they would build the necessary capacity to improve both the collection of domestic revenue and social spending.

The report said the total additional spending required in low-income countries to ensure universal access to five key social protection guarantees (child allowances, disability benefits, maternity benefits, old age pensions and unemployment benefits), as well as providing essential healthcare, amounts to $308.5 billion per year in absolute terms.

That financing gap represents 52.3 per cent of the GDP of low-income countries, exceeding by four times their current government expenditure and a staggering 28 times their current social protection spending, it added.

Without international support, low-income countries will simply not be able to make the investments needed, De Schutter said.

“It is in countries that are least responsible for climate change that people have the worst access to social protection systems that could shield them from its impacts,” the rights expert said.

“Over 90% of people in the world’s poorest countries lack any form of social protection whatsoever, leaving them entirely unprotected,” he added.

In this context, he called on governments meeting at FFD4 to adopt alternative financing mechanisms, including international tax reform and “solidarity levies” on sectors such as transport and finance, managed through a Global Fund for Social Protection, to ensure long-term and predictable funding of social protection in the Global South.

The Special Rapporteur said a new international financing mechanism in support of the efforts of poor countries to establish social protection floors would ensure access to a reliable and predictable source of funding for the countries lacking the fiscal capacity to make progress, allowing such social protection floors to be designed as rights-based (in accordance with the Social Protection Floors Recommendation, 2012 (No. 202)), moving beyond ad hoc and limited cash transfer schemes and involving an enforceable commitment from Governments to their populations.

He said were such a tool to be created, countries would have a positive incentive to invest in social protection, whereas in the current context of high levels of indebtedness, countries making such investments are instead penalized by rating agencies and financial markets, since investing in social protection leads, in the short-term, to higher public deficits.

In the present context, the Special Rapporteur said such a tool would provide countries committing to protect their populations through social protection floors with an insurance against co-variate shocks, such as those caused by climate disasters, by increasing the level of international support in times of crisis, when demand for social protection increases at the same time that public revenue falls.

If financing through a global fund for social protection were made conditional on beneficiary countries investing more in social protection by mobilizing domestic resources, it could lead gradually to a virtuous cycle emerging, favouring the increased mobilization of domestic resources, he suggested.

“It would also act as a financial safety net during economic, climate or health crises and accelerate progress towards achieving the Sustainable Development Goals, including Goal 1 on poverty reduction and Goal 3 on improved health outcomes.”

That would allow countries to move away from dependency on short-term, ad hoc aid of a humanitarian nature and gradually gain the fiscal space required to finance social protection without external support, De Schutter said.

“Such an investment has potentially high returns: it leads to building human capital, has significant multiplier effects in the local economy and contributes to resilience in times of crisis.”

As the level of support provided by the fund would increase in times of crisis, for instance, when climate-related disasters occurred, it is the necessary international complement to adaptive social protection, he added.

In his contribution (annexed to his present report) to FFD4, the Special Rapporteur reviewed a range of options that could be explored to support the establishment of social protection floors in low-income countries (LICs).

He pointed to calculations he presented in advance of FFD4 demonstrating how the international community could raise US$759.6 billion a year – more than twice the amount required to provide the world’s 26 lowest- income countries with the essential healthcare and basic income security that would safeguard people in poverty from the impacts of climate change.

Among the options presented, De Schutter said that official development assistance (ODA) could play a role, if donor countries met their pledges and allocated a significant portion of aid to social protection.

In 2023, ODA from the OECD’s Development Assistance Committee countries reached a record $223.7 billion, said the Special Rapporteur’s report.

However, the average ODA contribution from high-income countries in 2023 was just 0.37% of gross national income (GNI), falling well short of the internationally agreed target of 0.7% of GNI.

Moreover, only a small fraction of ODA goes to social protection: in 2023, DAC bilateral ODA allocated to social protection ($1,570 million) represented 1.44% of bilateral sector-allocable ODA ($108,818 million).

If donor countries were to meet the 0.7% of GNI target, nearly $200 billion in additional funds could be made available annually, increasing total ODA to $423.2 billion annually, and if, consistent with the Addis Ababa Action Agenda (reflecting commitments contained in both the Monterrey Consensus and the Doha Declaration on Financing for Development), rich countries dedicated 0.2% of GNI to ODA to support the LDCs, $120.9 billion would be directed to LICs – a substantial increase from the current $22.4 billion.

Even a partial allocation of this amount to social protection – such as 25% of total ODA, or $30.2 billion – could cover one tenth of the social protection financing gap in LICs, De Schutter underlined.

However, he noted that donor fatigue, and competing priorities facing rich countries, make it unlikely that ODA will increase in the next few years.

De Schutter also suggested that the International Monetary Fund (IMF) could issue new Special Drawing Rights (SDRs) based on need rather than quota, providing LICs with liquidity without increasing their debt burden.

This would enable them to finance critical investments in social protection, healthcare, and economic recovery, particularly during crises, he said.

The distribution of SDRs based on IMF member countries’ quotas, which are determined by the relative size of their economies, disproportionally favours wealthier nations, he pointed out.

In the 2021 allocation of $650 billion to stabilise the global economy during the COVID-19 pandemic, only $21 billion (3.2%) went to LICs, despite their greater need, he noted.

The rights expert said that allocating $650 billion a year to countries according to population and need would allow LICs, despite comprising just 9% of the global population, to receive 27% of SDR allocations rather than the 3.2% allocated in 2021.

This would represent approximately $175 billion, addressing half of their social protection financing gap, he added.

According to De Schutter, still other innovative financing tools exist, such as “solidarity levies”.

For instance, he said that a globally implemented financial transaction tax of 0.1% on the trading of stocks and bonds and a 0.01% tax on derivative transactions could yield $326.9 billion annually, equivalent to 0.43% of global GDP.

He said that while most of the revenue raised would be concentrated in high-income countries which have more active financial markets, allocating a share of 9% to LICs (in proportion to their share of the world population) could generate $29.4 billion, covering 9.5% of their social protection financing gap.

“Social protection is increasingly recognised as our greatest tool in the fight against poverty – and is proving just as powerful in protecting people in poverty from the climate disasters that are becoming part of their daily lives,” De Schutter said.

“By championing the financing of social protection, world leaders meeting at FFD4 would be taking a powerful stand against today’s deplorable attempts to upend the international order, ignore the climate crisis and abandon the world’s poorest people,” he stressed. – Third World Network