5 futures for aid in a divided world

The global development industry is facing a reckoning. Long reliant on Western donors, the sector is grappling with deep and sudden cuts to official development assistance.

The crisis in aid affects tens of thousands of workers and service users with cascading effects on food security, poverty reduction, health and education provision, conflict prevention and peacekeeping.

This upheaval signals not merely a crisis of funding but of shared purpose. The aid architecture, constructed after the Second World War as a bulwark against conflict and destitution, is faltering under the pressure of nationalism, fiscal tightening and geopolitical rivalries.

The post-war liberal consensus – anchored in rules-based multilateralism, a commitment to lasting peace and global solidarity – is being replaced by transactional diplomacy and geopolitical muscle-flexing. Rather than incremental reform, development cooperation is entering a phase of rupture.

A messier, multipolar order is emerging, where new actors, norms and mechanisms will shape the future of aid.

While outcomes remain uncertain, five broad scenarios are coming into focus. They are not mutually exclusive; in practice, a patchwork of these futures is likely to unfold.

In the most pessimistic scenario, the West continues its retreat from global development.

UN agencies now face mounting funding shortfalls. The UN Office for Coordination of Humanitarian Affairs will cut over 20% of its staff this year. The Green Climate Fund, once a flagship for global coordination, is adrift. In many cases, recipient countries already saddled with debt are being left to patch together support from philanthropies, domestic budgets or private financiers.

Some see a silver lining in this decentralization. Local actors – often nimbler and more trusted – are taking on bigger roles. Domestic philanthropy is growing, from Brazil, India and Indonesia to Kenya, Malaysia and the Untied Arab Emirates. However, without substantial external resources, these efforts risk being ad hoc and overwhelmed.

The scale of challenges such as climate change, food insecurity and pandemics dwarfs local capacity. A world in which official development assistance recedes without a credible replacement is one in which the Sustainable Development Goals are quietly shelved.

A more restrained path could see Western donors regroup, reorienting their aid strategies toward core functions. Rather than lofty ambitions, development becomes a matter of damage control and building local resilience – focused on humanitarian relief, migration deterrence and geostrategic influence.

Already, signs of this recalibration are evident. The UN’s humanitarian “reset” urges countries to streamline interventions around essential needs - from security to shelter. The European Union’s Global Gateway, a counterweight to China’s Belt and Road Initiative, funds infrastructure that could create favourable conditions for Europe.

Under this model, multilateral institutions are trimmed back to their most functional roles. Aid becomes more conditional and interest-driven. Donors may re-engage in fragile states but with the goal of containment rather than capacity-building.

While such realism may appeal to beleaguered finance ministries, it risks sidelining issues such as gender equity, conflict prevention and rights-based development. A focus on doing less, even if done well, may not be enough.

As the West retreats, China may fill the vacuum. Beijing has already invested over $1 trillion in infrastructure across Asia, Africa and Latin America through its Belt and Road Initiative. Its involvement in health, digital infrastructure and climate finance is also growing, albeit unevenly.

Much will depend on how China navigates its internal economic slowdown, demographic challenges and property-sector instability. While Chinese officials continue to express support for multilateralism – particularly in trade and climate – they show little appetite for adopting Western development norms.

Human rights, civil society and governance reform are unlikely to feature prominently.

Still, China is incrementally expanding its influence at the UN, World Bank and International Monetary Fund. The upcoming International Development Association replenishment negotiations will serve as a litmus test for Beijing’s commitment to reshaping global finance.

For many developing countries, especially those excluded from Western-led institutions, China offers a more accessible – even if more opaque – alternative.

A parallel future may see the emergence of an alternative multipolar development bloc centred on the BRICS+ countries – Brazil, Russia, India, China and South Africa, along with potential additions such as Saudi Arabia, Nigeria and Indonesia. These powers are already experimenting with new financial instruments and governance models.

The BRICS-led New Development Bank has disbursed billions in loans and is considering expansion. Regional development banks, sovereign wealth funds and South-South partnerships are increasingly prominent. These mechanisms are not merely filling gaps but redefining development itself, away from Western priorities and toward regional autonomy.

Debt reform may prove to be the linchpin of this vision. Many developing economies are facing unsustainable repayment burdens and seek alternatives to IMF-imposed austerity.

A shift towards more flexible, concessional and politically neutral financing could attract a growing number of countries, particularly if accompanied by a genuine redistribution of influence within international institutions.

Another plausible scenario sees the rise of private actors – not just in logistics or project delivery but across all development functions. Indeed, private corporations have long been assuming roles once reserved for states and non-government organizations.

Many large consulting firms are already heavily involved in development assistance ranging from Chemonics and DAI Global to Accenture, Boston Consulting, Deloitte and KPMG.

Public-private approaches to development are widespread. Blended finance, social impact bonds and green investment funds are proliferating. Advances in artificial intelligence (AI) and fintech are enabling rapid deployment of digital solutions in healthcare, education and social protection – bypassing traditional aid channels.

Some argue this unlocks innovation and scale. Others warn of accountability gaps, predatory pricing and the erosion of public trust.

Without a framework to govern this private-sector pivot, the risk of fragmentation and inequity rises. Stripped of its moral dimension, development becomes a matter of risk management and profit margins, which is hardly a recipe for inclusive or sustainable outcomes.

These five scenarios reflect a world in transition. The old model of donor-led development – linear, hierarchical and rooted in post-war liberalism – is no longer fit for purpose. What replaces it remains to be seen. More likely than not, future models will be hybrid – blending localization, private capital, bilateral aid, philanthropy and a dose of multilateral improvization.

To navigate this new and uncertain terrain, development practitioners will need to think strategically, act flexibly and build coalitions across public and private lines. The aid sector must adapt not only to funding cuts but to a fundamental realignment in global power.

The world’s top development priorities – humanitarian assistance, poverty alleviation, access to finance and shared public goods – are more pressing than ever. The challenge now is to craft a new compact for development – one grounded in mutual interest, shared responsibility and the messy realities of a multipolar world.