How Cutting Development Aid Threatens Global Security

In 2023, the world's rich governments spent a record $223.7 billion on official development aid. This is the money — grants and low-interest loans — that builds clinics, vaccinates children, and keeps famine away in the poorest countries. Two years later, that number has fallen to $174.3 billion. In real terms, more than a quarter of the world's aid budget has disappeared in just twenty-four months. The OECD says the 23.1% drop in 2025 is the biggest one-year fall in the history of foreign aid, and it came right after another drop the year before. Aid is now back to where it was ten years ago, and it is expected to fall again in 2026.

This is not a case of many governments cutting their budgets together. Above all, it is the story of one country.

The American Pullback

The numbers make it clear where the fall comes from. The OECD reports that the five biggest donors — the United States, Germany, the United Kingdom, France, and Japan — caused 95.7% of the total drop in 2025. But one country stands out. The United States alone caused about three-quarters of the global fall. Its aid dropped by 56.9% in a single year — the largest cut by any donor in any year ever recorded.

The cause was the shutdown of the U.S. Agency for International Development (USAID) in early 2025, and the end of more than 80% of its programs. The effect is already clear in the donor rankings. For the first time in history, the United States is no longer the world's largest aid provider. That place now belongs to Germany, at $29.1 billion. One government's decision has changed the shape of global aid.

People who support the cuts argue that aid is charity the American taxpayer can no longer afford, that much of it is wasted, and that poor countries must learn to stand on their own. These are fair debates about how well aid works. But the size and speed of the American pullout — with no plan to replace it — turned a policy debate into a sudden break.

China : A Lender, Not a Donor

Any talk about who funds development sooner or later turns to China. Here we must be careful, because what most people believe is mostly wrong.

By most measures, China is the largest single-country lender to the developing world. Its lending is now as big as the World Bank's, and studies by AidData, the Kiel Institute, and others show it has passed the IMF and the World Bank as a country-to-country lender. Between 2000 and 2021, Chinese banks lent about $1.34 trillion to developing countries. This money built ports, railways, power stations, and roads in around 165 countries under the Belt and Road Initiative.

But this is not aid in the way the OECD counts it. China gives loans, not grants. Since the Belt and Road began in 2013, AidData finds that China has given about 31 loans for every 1 grant. China builds things and expects to be paid back — often at interest rates near 6%, and often with a country's exports, like oil or minerals, used as a guarantee. And the Belt and Road boom is over. Chinese lending peaked in the mid-2010s. Today China collects more in loan repayments than it lends — it has become more of a debt collector than a bank.

Look at what this means for the world's poorest countries. In 2023, China's real aid to the developing world — the grant-like help the OECD would count as aid — was only about $1.9 billion, according to AidData. In the same year, the loans it was still owed by developing countries came to around $800 billion. At the interest rates China charges — close to double the World Bank's, and up to 6% on its business loans — that loan book earns an estimated $30 billion or more in interest every year. The balance has now flipped completely. The Boston University Global Development Policy Center found that in 2022 and 2023, developing countries paid China about $3.9 billion more each year than they received in new loans. The Lowy Institute expects total loan repayments to China from developing countries to reach $35 billion in 2025 — and about $22 billion of that is owed by the 75 poorest and most vulnerable countries. In simple terms, China now takes more out of the developing world than it puts in, and gives back almost nothing in real aid. Whatever we call this, it is not development aid — and it is not a gap that China will ever fill.

The Human Cost Is Real

The results of the pullback are already being counted in lives. A study in The Lancet in 2025 found that USAID programs prevented 91 million deaths in low- and middle-income countries between 2001 and 2021. The same study warned that if the 2025 cuts are not reversed, more than 14 million extra deaths could happen by 2030. Over 4.5 million of them would be children under five — about 700,000 extra child deaths every year. A separate study by the Barcelona Institute for Global Health, looking at the wider wave of cuts, warned of 9.4 million extra deaths by 2030, and up to 22.6 million if the cuts get worse. USAID had provided about 40% of all humanitarian aid in the world.

Afghanistan: A Warning in One Country

Nowhere do all these threads come together as clearly as in Afghanistan. Few countries ever relied on aid so heavily. When the Western-backed government fell in 2021, foreign grants paid for about 75% of all government spending. When Washington shut down USAID in early 2025, it cut around $1.8 billion in aid to a country that was already falling apart. The results, recorded by the United Nations through late 2025, are shocking. In one year, 422 health centers closed, cutting three million people off from care. More than 300 feeding centers shut down, leaving 1.1 million children without lifesaving food and 1.7 million at risk of dying. And for the first time in four years, the number of hungry Afghans went up instead of down. Nearly 22 million people — about half the country — will need humanitarian aid in 2026, even though total aid to Afghanistan fell another 16.5% in 2025. The International Rescue Committee says it can now reach almost two-thirds fewer people than before.

What makes Afghanistan such a clear warning is not only its size but where it sits. This is a country the UN Security Council itself names as a lasting source of terrorism, and a place people are already leaving in huge numbers — hundreds of thousands of Afghans pushed out of Iran and Pakistan, returning home to a country that can no longer feed them. A budget decision made in Washington becomes, within months, a hunger crisis, a broken health system, a recruiting ground for extremists, and a wave of migration. Afghanistan is not a question of charity. It shows, in real time, how fast a line cut from a budget in one capital turns into a security problem with no borders.

How Poverty Becomes a Security Problem

Here is the argument that should worry even people who do not care about the moral case for aid: development aid is not only about kindness. It is also about security.

The link between poverty, weak states, and instability is one of the strongest findings in development research. The OECD's own work treats poverty, weak government, and insecurity as parts of the same problem; in the most fragile countries, humanitarian aid already makes up half of all aid. The European Commission's own strategy directly links poverty and weak institutions to “organised crime… extremism, terrorism, forced displacement and migration.” These are not extreme views. They are the basic assumptions of Western security policy.

The chain of events is easy to follow. When health and food systems collapse, poverty grows. As poverty grows, weak states grow weaker. Weak states are where armed groups recruit, where criminal networks spread when no one is in control, and from where people flee. That flight does not stay local: today's regional refugee crisis becomes tomorrow's migration pressure on Europe and North America. The Sahel, Somalia, Afghanistan, and Sudan all show how an empty space, with no development and no working government, turns into a security problem that no border wall can stop.

To be honest — and this makes the case stronger, not weaker — the direct link from “less aid” to “more terror” or “more war” is debated. Some research shows that badly designed aid can even feed conflict, by creating resources for groups to fight over. Aid is not a switch that turns instability on and off. But the balance of evidence supports the wider point: pulling large amounts of support out of fragile societies, suddenly, raises the risk of exactly the problems — extremism, crime, mass migration, war — that rich governments then spend far more money trying to contain. Prevention is cheaper than the cure. A vaccination program costs less than a peacekeeping mission. A working clinic costs less than a refugee camp.

The Question of Responsibility

This is where the argument goes beyond money. The five permanent members of the UN Security Council hold a power no other country has — the veto. They were given it on the idea that they carry a matching duty for world peace and security. That duty cannot be met with warships alone. Famine, state collapse, and mass migration threaten peace just as much as any army, and these five powers are among the few big enough to prevent them on a large scale. A permanent seat is not a prize. It is a job.

For eighty years, the United States understood that its leading role came with duties beyond its own borders — that a more stable world was a safer America, and that real leadership means helping hold the global order together, not just policing it. To tear down the largest tool of that leadership in a few weeks, with nothing to replace it, is not a change of strategy. It is walking away. A country that wants the benefits of global leadership, but drops its duties the moment they cost something, is not leading. It has left the field and kept the trophy.

China deserves the same hard look, and honesty has to work both ways. China's dealings with the developing world are about business — loans priced to make money, made to grow its own power, by a state that still has tens of millions of its own people near the poverty line and an open goal of becoming the world's top economy above all else. It is fair to ask what China gives the world for free, without expecting to be paid back with interest. But an argument that ignores the other side falls apart quickly: China is one of the biggest funders of the UN's regular and peacekeeping budgets, and the largest provider of peacekeeping troops among the permanent members. So the honest charge is not that China does nothing. It is that China does far too little for a country that wants to be a superpower — that it has learned to collect the rewards of global power while avoiding its human costs. To ask America to step back in while excusing China's free-riding — or the other way around — is to score a political point, not to make a fair one.

America Is Not China

The current U.S. administration makes one fair point about China. China does not really give aid. It gives loans, and it charges interest on them. On top of that, Chinese companies usually build the roads, ports, and power plants that these loans pay for. So China wins twice: once from the interest, and once from the contracts its own firms take home. Much of the money goes out and then comes straight back to China. This is trade wearing the costume of help.

But this cannot be used to defend the American cuts — because the United States cannot copy China's model. The two countries are not built on the same foundation. America's place in the world rests on ideas: human rights, democracy, human development, and peace. That is where its real influence comes from. A country that leads on these values cannot suddenly treat the world's poorest people as customers to profit from. The moment the United States starts acting like China, it throws away the very thing that made it different from China in the first place.

So the honest conclusion is not “China is stingy, so America can be too.” It is the opposite. Because America is not China, it cannot walk away. Leading on global development is not a charity the United States hands out only when it feels rich. It is part of who America says it is. A country that claims to stand for human rights and human dignity cannot turn its back on millions of people in need and still keep that claim. The United States can criticize China's model. It cannot become it. And it cannot leave the space empty and expect its own values to survive there without it.

What Is at Stake

The pullback from aid is being sold as being careful with money. It is really a risky bet — that the rich world can shut its doors and the poor world's problems will stay far away. Nothing in the last twenty-five years supports that bet. Pandemics traveled. Refugees traveled. Extremism traveled. Instability has never stayed where it began, and it will not start now.

And aid was one of the cheapest security tools ever built. Americans paid about $64 a year each for USAID — around seventeen cents a day — for programs that, by one Lancet study, prevented 91 million deaths in twenty years. Few things a government can buy give back so much safety for the money. Cutting them will not save anything in the end. It only moves the cost from the small, steady bill of prevention to the huge, unpredictable bill of crisis — the peacekeeping missions, the border walls, the counter-terror operations, the refugee camps — paid first by the world's poorest, and in the end by everyone.

The saddest part is not that the world cannot afford to help. It is that the world has chosen not to, at the exact moment when the need is greatest and the cost is lowest. The bill will still come. It will simply arrive in a form — instability, migration, war — that is far more expensive than the aid we refused to give.

Sources

OECD Development Assistance Committee statistics (2024–2025 preliminary data); AidData, Global Chinese Development Finance Dataset; Lowy Institute, “Peak Repayment: China's Global Lending” (2025); Boston University Global Development Policy Center (2025); Cavalcanti et al., The Lancet (2025); Barcelona Institute for Global Health / ISGlobal (2026); UN OCHA and UN News reporting on Afghanistan (2025–2026); International Rescue Committee; OECD States of Fragility; European Commission international partnerships. Figures are nominal unless noted; 2025 aid data are preliminary and subject to revision in the OECD's final release.