Global aid forecasts have small island developing states “among the hardest hit individually” as aid spending reaches new lows.

The OECD, which tracks their wealthy member states’ Overseas Development Assistance (ODA), is projecting a 6.9 percent drop this year. Last year, it was 23.3 percent.

In a report, it noted this would make for the lowest global ODA level since 2014, with health spending down to pre-pandemic levels.

“Most reductions come from a small number of the largest providers,” the report noted, referring to European countries, and the United States.

“Many highly aid-dependent countries rely on a small number of providers, increasing vulnerability to shocks.”

It was also noted that five of the fifteen recipient countries with the largest cuts are small island developing states. Caribbean Small Island Developing States (SIDS) will have lost 36.6 percent of aid between 2024 and 2026; Asian and Pacific states will have lost 33.4 percent.

“A single provider accounts for most ODA in several LDCs and small island developing states (SIDS), such as the United States in Marshall Islands and Micronesia, or Australia and New Zealand in Tonga and Tuvalu,” it read.

“In these countries especially, a shift in aid could therefore spill over quickly into broader macroeconomic and societal stress.”

Globally, health spending is projected to fall by between 29 and 46 percent in that two-year timeframe, with aid for public health and the control of communicable diseases the hardest hit.

Aid targeting malaria falls by 59.6 percent, tuberculosis by 57.2 percent, other infectious-disease control by 40.4 percent.

Delivery models need to change – ChildFund NZ
Humanitarian aid is projected to fall by 40.3 percent, while government and civil society falls by 39.8 percent. Aid from multilateral institutions falls by 31 percent.

For Josie Pagani, CEO of ChildFund NZ, these are the most dangerous trends from a Pacific perspective.

“That’s for when you’re in a crisis, like we’ve just seen in Venezuela, or in the Middle East,” she said.

“That is going to have a very direct impact on the ability for countries to respond, or charities like ChildFund to respond directly to a crisis.”

Pagani said it created both a need and an incentive to make the way that aid was delivered more efficient, and more effective.

This, she said, would address a core issue around public perception — where aid was viewed as useless or unnecessary, and so it was deprioritised.

“Across the Pacific, there are sorts of dinosaur aid projects scattered around… water tanks with logos on them… [but] there are five million people in the Pacific who still don’t have access to running clean drinking water.”

“You can’t solve that by a tank here and a tank there, you’ve got to look at it systemically.”

Unchanged aid budgets
She also noted that unchanged aid budgets from Australia and New Zealand could insulate the Pacific from wider multilateral grant cutbacks.

Australia and New Zealand, in their respective budgets from May, kept their aid allocations roughly the same. New Zealand brought over NZ$160 million forward to this year from unspent cash in the previous two years.

Meanwhile, the Trump Administration is lobbying United Nations member states for its “Trade Over Aid” policy, which would prioritise aid spending for “free market reforms” in poor countries.