US development aid cuts are a disaster for the whole world

The year 2025 began dramatically when the United States cut a large slice from the world’s poorest. Europe now has a chance to prove itself, as the effects will also be felt here.

Text: Tapio Laakso
Illustration: Julia Tavast

The beginning of the year has been dramatic, especially for people living in the poorest and most fragile countries. The United States decided to end almost all of its international aid practically overnight. The decision terminated nearly 10,000 funding agreements worth a staggering 58 billion US dollars. From the perspective of humanitarian aid and development, this was not just a bureaucratic decision, but the beginning of a crisis whose scale is difficult to overstate.

For decades, the United States has been a major financier of development cooperation, humanitarian aid and the international system. Last year, the United States accounted for 42 per cent of all global humanitarian aid. Relative to the size of the country’s economy, the contribution has been modest, but in dollar terms the amount has been enormous. Now this massive pillar of support is crumbling – and the first cracks are already visible.

The United States implemented humanitarian and development aid through several ministries and agencies. The largest budget was allocated to the USAID development agency, which was the most significant player in the global health sector before the Trump administration shut it down – or ‘put it into the wood chipper’, as Elon Musk, who has been pushing for reforms alongside the president, put it. USAID’s health programmes provided, among other things, polio vaccinations in countries where the disease still exists and worked to prevent the spread of dangerous viruses. Viruses that could cause a pandemic.

The United States also funded globally significant systems for anticipating food insecurity and famine, as well as data collection to support famine prevention. Without the United States, these systems are at risk of collapsing, which would make it harder to prepare for food crises. The timing could not be worse, as the need for humanitarian aid around the world is at its highest since the Second World War.

According to estimates, millions could die as a result of these decisions. Human lives are at stake, but their fate may go unnoticed when funding for statistics, and thus statistics themselves, come to an end.

The United States has been an important donor to Finn Church Aid (FCA) in Uganda and Kenya. It has provided seven million dollars in support for refugee education. For FCA, the end of funding means that more than 200,000 children and young people will be left without education, school supplies, protection, learning facilities – and even menstrual hygiene products.

However, concern about education extends beyond the work of FCA. The United States has been a major supporter of basic education as part of its development cooperation. Cuts in humanitarian aid, on the other hand, are leading to a major reallocation of funding, and there are fears that education will be severely neglected. During the Coronavirus pandemic, we saw the enormous impact of school closures. School dropout rates are rising, as are child labour, teenage pregnancies and child marriages.

Schools not only support people’s belief in the future, but also keep children and young people safe and provide mental health support in times of crisis.

The impact of the US cuts is not limited to individual projects. This is a systemic shock.

The United States plays a significant role in UN agencies such as the UN Refugee Agency (UNHCR), the World Food Programme (WFP) and UNICEF. Through UN agencies, its influence is reflected in the entire global humanitarian system, as these agencies play an important coordinating role and provide basic structures. UN agencies ensure that logistics function in humanitarian crises, that work is safe and that up-to-date information on the situation is available.

More broadly, there is concern about the future of the international system, which is creaking at the seams. The UN is far from perfect, but it is still the best forum available for maintaining dialogue and agreement between all countries in the world.

The devastating earthquake in Myanmar in March 2025 was the first major disaster since the United States announced it was ending almost all international aid. Last year, the United States still funded a third of Myanmar’s humanitarian aid and would have been among the first to rescue earthquake victims and provide assistance. Under the new funding situation, the US sent a three-person team to the scene, who were dismissed in the middle of their relief work.

And it’s not just about the earthquake. Myanmar is a country ravaged by civil war, where the need for aid is enormous. In several countries – such as South Sudan, Somalia and Afghanistan – USAID accounted for more than a fifth of all aid. As a result of the cuts, up to nine per cent of the gross national income of the countries mentioned above could be lost at a stroke.

In fragile countries, the consequences are immediate and can deepen or escalate long-standing conflicts. The poorest countries have the fewest alternatives, such as foreign investment or sources of financing from the private sector. Furthermore, the climate crisis and protracted conflicts, for example, make it hard for them to get back on your feet without outside help.

When the world’s largest donor of development aid withdraws, a huge vacuum is created. The EU and its Member States, including Finland, now have a role to play. Poverty and instability are on the rise and conflicts are deepening, particularly in Europe’s neighbouring regions. It is clear that this will also affect us, for example by making it more difficult to protect ourselves against infectious diseases.

With the withdrawal of the United States, Europe has a greater need than ever to find new partners. Diplomacy towards China, India, Turkey and the Gulf countries could help bring new actors on board to support the international humanitarian system.

At the same time, Europe can now demonstrate its reliability as a partner in times of crisis and take action. Finland, too, must review its own cuts and increase funding, particularly in areas that have been hardest hit by the US withdrawal. Supporting education, for example, would be a natural course of action.

When attempts are made to destroy the world, we must build.

Sources: Devex, Center for Global Development, Donor tracker, CNN. ReliefWeb 28.2.2025