At this year’s World Economic Forum in Davos, Canadian Prime Minister Mark Carney warned of a world defined by great power rivalry, where “the countries in between have a choice: compete with each other for favour, or combine to create a third path with impact.”
Global affairs have become defined by disorder, exacerbated by a lack of international cooperation. The Iran war and its ripple effects exemplify this, but so do longer-standing trends such as debt stress, forced displacement, climate shocks, and ongoing outbreaks of contagious diseases. In our interconnected world, instability abroad causes ructions at home.
The European Union is the world’s most integrated political and economic bloc. It has much to lose from President Trump’s shift away from anchoring the global system and the Transatlantic Alliance – particularly as conflicts in Europe’s neighbourhood intensify. But it also offers the global order a unique value proposition, combining multiple policy tools with significant spending power.
International aid has borne the brunt of attacks from the Trump Administration, with the shuttering of USAID and cancellation of over 80% of grants and contracts. Yet as needs continue to grow, the EU now has a chance – and a responsibility – to take the global lead.
The bloc and its member states have collectively become the world’s largest foreign aid donor by a wider margin than ever before, despite cuts in national aid budgets. Power lies not only in the scale of its pooled resources, but in how it plans them. Seven-year budget cycles allow it to think beyond short-term crises and invest in the longer-term.
Under the proposed Global Europe fund for 2028-2034 – of which the Commission suggested allocating a minimum of €25bn for humanitarian aid – the EU would have substantial financing to respond to humanitarian crises and support strategic investment worldwide. It also has trade tools to further its own interests. This creates an opportunity for the aid budget to do what it does best: save lives, alleviate suffering, and build long-term resilience.
This budget should be a springboard for innovation: funding interventions that predict and respond to crises, tackle the drivers of need in the most vulnerable states, deliver to the hardest-to-reach communities, and mobilise additional investment to speed recovery.
This is not only ethically right, but economically rational. A recent study found that conflict prevention is 100 times less costly than crisis response. With the right vision, the EU could turn its next humanitarian aid budget into a strategic blueprint for its global standing – and for a more sustainable, efficient aid system.
The first step will be to target support where it is needed most. The IRC’s 20 countries at greatest risk of worsening humanitarian crisis are home to 12% of the global population, yet account for half of those living in extreme poverty and 89% in humanitarian need. But they currently receive just 8% of the EU’s foreign aid (excluding Ukraine) – the lowest share since 2013.
If the EU is to contribute proportionally to where needs are concentrated, at least 30% of its aid should go to these countries, and 60% to fragile and conflict-affected countries more broadly.
Second, the world’s most disadvantaged people are cut off from cash and services by conflict. Of the one billion people living in what the World Bank classifies as “fragile and conflict-affected situations”, 200 million live under de facto non-state authorities. Reaching these communities requires new delivery models that can operate even where state systems cannot. For instance, increased partnerships with local humanitarian organisations to deliver vaccines to communities that government health systems cannot reach, while also reducing costs.
Third, Europe must invest far more in preventing crises. Despite the clear value of this precautionary approach, only 1% of global official development assistance goes to anticipatory action. The UN has found that every euro invested in prevention and adaptation can save up to €15 in post-disaster recovery. Scaling up anticipatory action is not only the most humane response – it is the most cost-effective one.
Meeting this moment will require ensuring every euro delivers maximum impact. More efficient supply chains could see cost savings of up to 12% each year, while AI-powered forecasting could save up to 40%. DG ECHO’s (for overseas humanitarian aid and for civil protection) commendable efforts have begun laying the groundwork for more strategic supply chains. Scaling them across the sector could allow faster delivery at lower cost.
But public institutional funding alone cannot fill the growing global aid gaps. The EU must pursue new innovative financing strategies to bring money into the system. Debt swaps have recently supported development and environmental goals, but now need to be seized for humanitarian purposes. The IRC-developed ‘Advisory Model’, supported by ECHO, enables humanitarians to advise investors using contextual expertise, steering investments towards more inclusive and sustainable outcomes in fragile contexts.
Harnessed this way, a €25bn investment in humanitarian aid over seven years, as well as the larger amount to be allocated to development finance, could enable the EU to deliver for communities at a much larger scale. It would also establish the EU as a humanitarian leader that combats the climate crisis, promotes global public health, and strengthens its own internal peace and security.
As others retreat, Europe can show that humanitarian and development leadership mean not just spending more – but spending smarter.
David Miliband is president and CEO of the International Rescue Committee, where he oversees the agency’s humanitarian relief operations in more than 50 war-affected countries. He is a former Foreign Secretary of the United Kingdom.
Source:
www.euractiv.com