C (2:56)

Yeah, I was just going to jump in on, on that piece because I think part of the reason that this administration has been forced to sort of push money through OCHA is because with the, you know, closure of USAID and with staff cuts at the State Department, there are just a, you know, there's not a lot of staff to actually approve and push through this funding. So even though the administration has said they don't want to work with UN agencies and big NGOs, the only way you can really move big pools of capital if you don't have a lot of internal capacity is to push it through these types of organizations where you can actually give them huge chunks of money in one go. And so I think that, you know, we're sort of seeing that and this sort of, sort of OCHA agreement is an example of exactly some of the challenges that the State Department is trying to navigate with its current staffing and its current sort of capabilities to put money out there.

A (3:49)

Yeah, I mean, we've seen this so many times before. People want, say that they want to do one thing and then they try and deliver the cash and they encounter the reality and they're like, oh, no, this is hard, dear. We hadn't realized how hard it was. We need to give the cash to somebody else who's an expert in handling these funds and they look around and they don't even have the resources to identify smaller organizations who might be the experts. So they go to the big organizations with the big reputations that they, they're familiar with and they can easily find to deliver this money. And that's generally Speaking, Large, Large INGOs and the United Nations. So it's, it's like we've seen this film, we know how it Ends.

D (4:26)

Yeah.

C (4:26)

And it's interesting because I recently interviewed Representative Sarah Jacobs, who had a bill that focuses on localization that actually was approved by the House Foreign Affairs Committee recently. And I think we've seen, you know, successive administrations really want to focus on this issue of localization, of getting more money through to local organizations. And I think in some senses, we've also seen that from this Trump administration, they're really looking at more government to government assistance and things like that. And so I think, you know, one of the things when I was speaking with Congresswoman Jacobs about this is she said, look, putting all this money through OCHA is like actually the opposite of localization. It's not. And, Alyssa, I think in one part of your story, even OCHA itself had mechanisms by which it could funnel more money to local organizations, but that's not necessarily in play with this pool of funding. So, I don't know, maybe you can tell us a little bit more about that. But I think, you know, there's Is this effort to localization that's also coming into conflict with. With these types of policies. So I think there's, you know, lots of dynamic pieces where it's really hard to make things. Make things work at the moment.

B (5:33)

Yeah, definitely. I think this is a really important point. Now, something that I didn't mention at the top is the way that this process is moving is through something, at least we initially thought through OCHA's pooled funding system. So these are a number of different kind of pots of money that are set up, pooling money from donors across the world. Sweden, Denmark, Norway, United States, et cetera, into one pot for, let's say, Ethiopia. Now, originally, that was kind of the language that was tossed around in terms of, like, the US Is creating, you know, kind of this process to push money into these pooled funds. It will create other. Make other donors step up in a more meaningful way, et cetera, et cetera. Now, we have since learned that actually these will not be traditional pooled funds. These will be pots of what they're calling reserve allocations within the pooled funds that are specific to US Funding. Now, I know that sounds really complicated and confusing, but essentially look at it as a pot within a potential. And that little pot of US Funding will have US Dollars kind of. Only now, why that matters is because that's the kind of money that's going through to these big ingos. Whereas the larger pots, the traditional pooled funds, yes, do have mechanisms to push toward local funding. And in years past, I think it was something like nearly 50% of those big pooled funds were going toward local, local nonprofits. Now if you look at kind of the list of organizations that are receiving that US money, that pot within a potential, it's very few. So you have, you know, several, kind of like in Nigeria, there's a couple in Ethiopia, there's a couple in South Sudan. Other than that, it's pretty far and few between. So it, it kind of reminded me writing the story about another story that I wrote last year about how local organizations were the worst to be impacted by the aid cuts last year. You know, these were the, the orgs that were often sub grantees. They were receiving small amounts of cash and didn't have quite the capacity to compete on the level that these larger INGOs do for these types of awards. And this was kind of another lay on top of that because all of these organizations that we outline in the piece were pre selected. So you have kind of these, you know, world food programs, unicef, Save the Children, et cetera, kind of being singled out and said, please apply. And local organizations were often not included in that list.

A (7:40)

Putting money into a pooled fund and then not pooling it seems to be just kind of none of its strengths, all of its weaknesses. It seems that absolutely the worst possible way of doing, doing something that pool funds are a fantastic funding mechanism, but in order for them to be fantastic, you have to pull the funds. If you, if you don't do it, that completely avoids the point of a pool fund.

C (8:02)

I wonder if the reason the US government is doing this is to have more control on where exactly the funding is going. And in a pooled fund, often, you know, the, in that case, OCHO would probably be able to dictate the terms. And so I think that's probably why we're seeing more of this approach. But curious your thoughts on that too, Alyssa? And then also, you know, I mean, I think one of the things that both Alyssa and I have written about is this expanded Mexico City policy that the administration has put in place. Alyssa, I think you explained to me that it doesn't apply to this pool of funding, but if the US transfers additional funding into this mechanism, there are questions about that. So I'm also curious, sort of, you know, is this partly so they can ensure that this funding all, you know, sort of abides by the policies and priorities?

B (8:48)

There is a, there's a lot of question marks around this promoting human flourishing and foreign assistance policy, which is this, as ABBA has mentioned, this expanded Mexico City policy. And from what Folks have told me if this policy were to be expanded to UN funding, like these pooled funds, it would be nearly impossible for the UN to manage because there's all of these kind of bits and pieces within this expanded policy about diversity, equity, inclusion, what the administration refers to as gender ideology. So really looking at kind of like gender identity and everything around that, and of course, promoting and providing abortion services. And because of the way in which, for example, the UN responds, let's say, in a peacekeeping mission or to a crisis, dropping rape kits, there was an analysis that said it would be almost impossible for the UN to kind of figure out whether all those sub grantees are truly not providing, for example, safe abortion services in a conflict zone like the Congo. It's just crises happen too quickly and it's, it's not compatible with this system. So there has been, I think, a lot of folks wondering, will Ocha and will the UN seek waivers? That's something that the State Department, in its kind of references to these, to this policy, the expanded policy, has said waivers could be an option. Now, whether that'll happen, we don't know yet, and that remains a question mark.

A (10:00)

Okay, let's back up just a second. Make sure everybody understands how this works. So the, this is the Mexico City policy, the global gag rule, the protecting human flourishing. It goes by various different names, but the way that it's been expanded, as I understand it under this Trump administration, and you can explain this better than I can, Alessaris, is that if you take money from the United States, you must guarantee that not only not just that money, but any other money you spend must not be spent on any kind of, I don't know exactly where the boundaries are, but any kind of family planning adjacent kind of services. Is that correct?

B (10:35)

So it's been through a couple of iterations now, like you said, and I think ADVA has covered this through several of its iterations. So maybe I'll let her back up further once I say this, but under this new expansion of the policy, there's actually different levels depending on which partner. So there's, for example, foreign NGOs or nonprofits have always been targeted by the Mexico City policy since the Reagan administration first created this policy in 1984. Now with the expansion, UN agencies, US based agencies, and others are also included and up to the State Department's discretion, even foreign governments now. So there's a lot of different levels in terms of can they promote, can they provide, do those funds also relate to other funds? And we have a long piece Kind of detailing all of those bits and pieces and foreign NGOs are the ones that are kind of underneath that umbrella restriction that Dave has just described. So promoting, providing, even partnering with organizations that do so, and merging, merging all that money together, it's pretty complicated. And I think that's part of the reason why experts estimate organizations will have to spend, you know, upwards of. I think it was over $100,000.

C (11:45)

Yeah. What's actually interesting is that in the State Department rules that sort of outline these restrictions, the State Department itself has estimated how much money it thinks organizations will have to spend to comply. And so this doesn't come without a cost. I would just add a couple of things. So the Mexico City policy historically has applied specifically to abortion. And so an organization that, that receives US Money cannot provide abortions or even counsel on abortions. In the past, this is only applied to that sort of foreign NGO category. And if we go way back, it actually only applied to a very narrow pool of funding. In the last administration, it expanded it to all global health funding. And then this administration, with this protecting human flourishing set of rules, is it has expanded it to all foreign assistance. So not only it no longer applies to smaller pool of funding, it applies to all foreign assistance funding, it applies to more organizations and agencies, including US based NGOs and UN agencies in a way that's never happened before, and as Alyssa said, could be applied in some of these government to government deals. And the third piece is that it moved beyond just being about abortion rules and policies. And now there are these two other components which Alyssa has mentioned, one of which is around gender ideology. So not. And I think some of these, these two new rules, there are still questions about exactly what they mean and how they would be implemented. So one around gender ideology and things like not paying for, you know, surgeries to help trans people transition and things like that. But it's actually quite a bit broader than that, in my understanding. And then another piece which is about diversity, equity, inclusion. I think that's the, the rule that people have the most questions about, because in the context, for example, of an OCHO or in a disaster response might, you know, if rape is being used in the conflict as, you know, a mechanism of the conflict. And you have a program that helps women who have been raped. That is a program that singles out people based on the fact that they're women, and that maybe could run afoul of this diversity equity inclusion rule.

A (13:58)

Yeah. And the position here is the rule is so vague, so broadly worded, so confusing. That nobody really knows whether they would or would not necessarily fall foul of it and what the consequences might be if they did fall foul of it. And therefore, for almost any aid organization of any size, the best thing to do is to just say, no, thank you, it's not worth the hassle and walk away.

C (14:20)

But a lot of. So yes, I think there are a subset of organizations that do that. We've seen that in the past with the Mexico City policy. There are certain organizations who say we are going to, you know, fund abortions with other money. Because I will go back to this. It is illegal to use any US Dollars to fund abortion that is in the law. It doesn't require these rules. It doesn't require the Mexico City policy. But some organizations say that is not some, you know, once the Mexico City policy in place, that is not something we can agree to. They don't accept money. Your International Planned Parenthood Federation organizations like that typically have accepted the money. A lot of other organizations comply. And actually what, what we, we've seen historically is that people pre comply or over comply. So instead of saying, we're not taking your money, they say, okay, we want to take this money. So we're going to like go overboard to make sure that we're not running afoul of this regulation. So I think we'll see how that plays out this time. But I think that's a really interesting piece of this. I also think, you know, with these new rules, things will probably become clearer over time as they're implemented. Often we do see more guidance. I think there's been sort of a lack of additional guidance this time around. I think there still isn't clarity around the waiver process, for example. So I think, you know, it's, there's lots of moving pieces in this.

B (15:38)

And a reason that we haven't seen that quite yet is because this applies only to new money. So that's why, going back to the OSHA conversation, conversation, because that money was initially kind of like things were signed and sealed before February 26, which is when this new expanded Mexico City policy went into effect. It is not touching this, this cash. It just could be for the future. And we'll also see that in terms of whatever requests for proposals we see coming out of the State Department, whatever new grants get applied after that February 26th date. So it's a little bit of a wait and see moment right now.

A (16:09)

Yeah. And what we often see with this, this type of money is a kind of chilling effect which you were describing. People don't want to fall foul of it. So they, they ring themselves around. They comply 20% more than you need to just to be on the safe side. Like nonprofit organizations are typically very compliant, naturally compliant with rules. And one thing I wonder about this is how, how easy it would be for the State Department to actually catch you if you did something wrong because they don't have anybody monitoring this stuff. Would be quite easy to just take the money and trust that they never find out. But yeah, okay, Eliza, do you feel that those are the, are there any other kind of key points to, to this Archer funding that the audience needs to know about or.

B (16:50)

I mean frankly there's, there's so many and I think we're going to be content have a story list a mile long about all the different kind of bits and pieces. So I would just encourage anyone who's listening out if you are also tracking this, please do reach out because there's a lot more here to uncover and just kind of dig at especially as these kind of programs start to actually land in country and at the same time as legacy USAID programs, these programs that were initially tagged as life saving by the State Department last year, most of them are actually coming to an end and many prematurely. So organizations that were told that they were going to have their programs, a lot of them are more developmenty. But still in the humanitarian space, things like resilient food structures and systems they might have been supposed to end in 2027 are now coming to an end a bit early. So that's something we're also looking at, especially the confluence of both of these things happening at the same time. One does not replace the other, but they're both happening kind of in mirroring each other.

C (17:40)

I was just going to say one of the things that struck me that you mentioned, Alyssa, is that these are very short term. It's money to be spent in six months. And I think, you know, something we've written about at Devex over the years is like, you know, to prevent humanitarian last blizzard, you know, sort of pre, you know, pre position things. Sometimes you need to think about the broader sort of humanitarian development nexus and how you do more longer term programs to address humanitarian needs. It does seem that that is not a priority currently of this administration. It's more this sort of immediate response. But it was interesting to me that these funds are like to be spent very quickly, very sort of narrow windows. I guess that does mean that we'll have a lot more information in the next.

D (18:25)

Hi, I'm Kate Warren, Executive Vice President and Executive Editor at devex. At devex, we don't just cover the biggest moments in global development. We create space to understand who and what are driving the headlines. Alongside gatherings like the World bank and imf, Spring and annual meetings, the World Health assembly, the UN General assembly and beyond, we host DEVEX Impact House, where our journalism comes off the page and onto the stage. We bring together a curated group of leaders for live interviews, intimate roundtables, hands on workshops, and candid conversations you won't hear in the official meetings. It's where tough questions get asked, the spin gets stripped away, and meaningful connections happen. If you'd like to join us or see Stay in the Loop on all of our events online and in person, please visit devex.com events and I hope to see you at a future DEVEX Impact House.

A (19:21)

You wrote last week about how the President's budget request for 2027 has come in once again. They're requesting a major cut to the amount of foreign aid spending, which is something the President keeps requesting and Congress keeps pushing back against. So why don't you fill us in on kind of where we are with that, what happens next in that field?

C (19:39)

Yeah, so what President Trump requested is about a 30% cut to the foreign affairs budget. Last year the request was about a 50, 50% cut. What we saw Congress do was close to a 20% cut. So if you look at the numbers on a whole, they're sort of still want the same levels of cuts as they wanted last year, but it's from a slightly lower benchmark because of what we saw Congress approve. That would mean a total of about $35.6 billion for the state Department and other international programs. Some of the proposed cuts include $4.3 billion less for global health. So a real hit to the global health budget that's almost cutting it in half. 2 billion less for humanitarian assistance. It proposes eliminating Food for Peace, which is the flagship $1.2 billion US food aid initiative. One of the things I'll say is that several of these things are places where Congress weighed in last year. I think last year they also proposed eliminating food for peace. Congress said no, we think this program is important. And so I think, you know, the real question now is like, will Congress, as they did actually really only a few weeks ago because of how late in the game the FY26 budget was approved, reject these sort of steep cuts to foreign, to the foreign affairs and aid budget? And I think, you know, we'll see how that plays out. I think that There are, you know, there's going to be some layered challenges with sort of the money that the administration is requesting for defense spending. You know, I, I think anyone who has been watching the US Budget process in recent years also expects that it's probably not going to follow the traditional sort of normal process. We will likely have a continuing resolution that, you know, I, I don't think the government will be funded by the start of fiscal year 2027 on October 1st. I think there will be a delay. Could there be a shutdown? I suppose, but at the very least, I think most people expect a delay until after the elections, perhaps farther than that. So I think there are, you know, it's probably going to be a messy road ahead. I think it will be interesting to see if Congress like what the numbers in Congress look like. I wanted to point out a couple other quick details. One is that the administration has several requests in that budget request, including $5 billion for the America First Opportunity Fund that was first proposed last year. We did see Congress provide some money for it. I think they appropriated about $850 million for FY26. So this would be like dramatically increasing that pool of funding. And I think it's a little bit unclear exactly what that money would go to. I think big picture, national security interests, illegal migration, critical minerals, countering adversaries is sort of what they've said they want it to be used for. But it's, you know, a little, you know, it doesn't exactly align with past funding buckets we've seen. So I think we'll see. But obviously they want sort of that flexible America First Opportunity Fund funding. And the other thing we saw in this request, which is unusual, is $13 billion for critical minerals. And this is, I mean, at least, you know, I've been covering this for about a decade. I don't think I've ever seen such a significant amount of money specifically for critical minerals. It's a little bit unclear how or where those funds would go. Is this like, you know, and so I think it raises a lot of questions. I think, you know, we have certainly seen this administration focus on critical minerals. I think there's an appetite in Congress to focus on critical minerals and supply chain security and things like that. Encountering China as part of that narrative, 13 billion of a 30 billion, you know, $36 billion, it's like a third of the funding. And so I think it also begs questions of if a third of the funding is now going to critical minerals, where are those cuts coming from? And how does that sort of really reshape what we're looking at? So I'll stop there so I don't start boring people.

B (23:14)

Definitely not boring. We need you to iron through these budget details for us. But yeah, I think like something that jumped out to me so much in this, of course, as ADVA mentioned, the critical minerals. But that zeroing out of the Food for Peace line, I think was just really surprising. And I mean surprising and unsurprising. Like ADVA said, we've seen this before. However, this was something that we've seen kind of a lot of movement around because earlier this year that program actually moved over to the U.S. department of Agriculture. So there's kind of all these kind of competing things going on at the same time that the President is putting out this budget request. And to put a finer point on where these things clash and kind of, you know, I guess clash is the only word for it. We've been spending so much of this podcast talking about family planning, and in the FY26 bill, there was actually $600 billion earmarked for family planning. So you have a sense of this, even this kind of very, very hotly charged topic, Congress is still allocating some funds for it. And this is a Republican led Congress. So it's a pretty interesting live back and forth that I think we're seeing. And again, it's up to Congress to decide. At the end of the day, they are the ones that should and historically have held this power of the purse.

A (24:19)

Now, that's going to be worth stressing actually for our non American audience, that Congress in the United States, unlike in most European governments, for example, it's Congress that has the final say on this. It's not the executive that comes in and lays down this. This is a request from the President. It's likely that Congress is going to push back, make a different set of decisions. Ultimately, it's Congress that makes those decisions. But Congress has been so split on bipartisan lines that it's been extremely difficult for Congress to actually reach a constructive decision. And we see typically like months and months and months of horse trading sometimes ending in this deadlock and the whole government shutting down in a way that's kind of difficult to understand if you're not used to it, if you're not an American. It's a very strange system. And therefore it looks likely that whilst this is the President's request, given Congress's previous behavior, we can probably expect to see a more generous settlement than anything President Trump requests. How much more Generous, perhaps. Advari, you're a better place to tell people than me, but I'm not sure any of us really knows.

C (25:23)

I don't have any sort of special crystal ball skills that will tell us where Congress will land. I do know that the House Appropriations Committee is already sort of thinking about what their bill is going to look like. I would expect that, you know, given what we saw them agree to just in the last couple months, I, I don't think it will be these, this level of steep cuts. At least we've seen sort of consensus emerge in Congress that at least members of Congress still think there's a real need for some of these foreign assistance dollars. I do think one of the big things that we'll be watching in this broader appropriations conversation is whether the administration actually spends this money or whether they come to Congress with some significant rescissions. I will say that in this, in this president's budget request, they do include a significant amount of rescissions for prior year money, and it's something that we saw them do last year. So while Congress does traditionally have the power of the purse, I think one of the big questions in this administration is what will they do to ensure that they keep that and to ensure that the government is actually spending the money the way that they have expressed they want it to be spent?

A (26:26)

Yeah. And I've just been reminded that we did actually do a special episode on exactly this, how all this works out. AADVAR gave us a great kind of summary of all of that. So if you're interested and you want to know more details about how US Congress and its funding works and how that affects the development sector, you can go back and check that out. I don't know if we'll be able to link to that. Maybe in the notes on YouTube or in the if you're listening to this on the podcast, we'll see if we can get you a link to that episode. And I think one thing that is really interesting is exactly what you were saying there, Ivar. The we're expecting to see ODA figures essentially any minute now. This episode is being recorded shortly before the ODA figures drop. So we don't have the final numbers, but I think we're predicting a big drop in overall ODA spending in the tens of billions, probably. OECD said that they were expecting 9 to 17% for a fall on last year. Looking at how much the US Actually spent on aid last year, it would not be totally surprising if the figure actually exceeded that, I think. And we saw a drop in excess of sort of 20 to 30 billion. But obviously we'll see those figures tomorrow and we won't have to guess on that anymore. Keep an eye out on that. We will be covering that in great detail on devex. We've historically obviously always covered those figures, but we're going to look at them in much more detail because they're so interesting this year as an indicator of what's happening. We're expecting to see cuts from the uk, from France, from Germany, from a lot of major European donors, and obviously a massive cut from the United States. So hopefully we'll have more on that on next week's podcast as well. But we'll also be writing about that in great detail on delegation, so make sure to follow up on that. Right. Very quickly. We're approaching time, but I think it's worth just taking a couple of minutes to come to you ever to say that next week it's the World bank meetings. You've just done a whole devex Pro event on what's going to be happening at those World bank meetings. So if you're a devex Pro member, you can go and you can check that out, you can check out the recording and you can get all of advanced wisdom on that subject. If you're not a devex Pro member, I suggest becoming a devex Pro member and then the problems that you'll have will largely go away. So ever do you want to just run through very quickly for us the top lines of what you've been discussing and the key things that we're kind of looking out for next week for the World bank meetings.

C (28:51)

Yeah, so the Reader's Digest version, because we only have a few minutes here. I think one of the things that we've seen in past years as well is that really we come in a moment of real uncertainty. I think that the war in the Middle east with Iran has really cast a shadow over these meetings, particularly because the economic fallout of the energy price increases and that's also translating to food costs and things like that are really hitting low income countries the hardest. And they're the countries that sort of are most vulnerable to begin with. And so I think that's something that we will be talking a lot about next week here in D.C. and you know, there is this ceasefire now, so it's unclear exactly how long the conflict will extend, but I think some of the impacts already have been felt and will continue to be felt in terms of global growth slowing down, inflation increasing and sort of the economic knock on effects we see from, from the disruption so far. So I think, you know, we enter in this, in this sort of moment of uncertainty and upheaval and we will be looking to, you know, and as we look at the oda, numbers drop. You know, I think there's a big focus on sort of the role of the World bank and the multilateral development banks to respond to crises. How are they sort of ramping up their crisis response mechanisms but also you know, more broadly how, what role MDBs are going to play in the development finance conversation moving forward. We do know that the World bank is, you know, their sort of main flagship event is going to be about water. They're launching a new Water Forward initiative in partnership with a number of different organizations and MDBs and that's been, you know, they've sort of issued a new water policy recently. So we'll be looking at that. I think one of the, you know, other, you know, the bank has been really focused on jobs. So obviously I think that's one thing we're continuing to cover. In a speech yesterday, Ajay Banga said that you know, his, the sort of pillar of the jobs agenda that they're going to focus on at these spring meetings is really the policy reform agenda and what governments can be doing even in moments of crisis to sort of set themselves up for success in economic growth by changing and creating the right enabling and policy environments. So I think that's another thing we'll be watching. You know, I think debt continues to loom large. Unfortunately, you know, at least the folks I'm speaking to don't think we'll see much movement on that. They don't expect that we'll see a lot out of the, the G20. I think in moments of conflict we also don't expect sort of official communiques. We'll probably just see some statements coming out of the G20 and the development committee at the World Bank. So you know, those are some of the things. There's obviously a lot more, but maybe I'll, I'll leave it there for now. I guess. One, one last thing I'll mention is that Devex is also doing a two day event called the Capital Summit where we'll have, we have just like a really rich agenda of folks who are coming to speak. I'm going to be interviewing Anna Biarde, the World Bank's Managing Director of Operations. I'm also going to be interviewing Conor Coleman who's the head of investments at the U.S. international Development Finance Corporation and interviewing Nadia Calvino the president of the European Investment Bank. So I think we're going to have some really rich conversation about sort of the, you know, how the development landscape is changing and how the development finance ecosystem is evolving as well.

A (32:17)

Okay. And Alyssa, you'll be there as well at the World bank meetings.

B (32:21)

I'll be there, too. Yeah. So we should have a couple of days that are really, really interesting. We've got a lot on the agenda for me, I'm covering quite a lot to do with artificial intelligence and just the way it will be looking at global development more broadly. So stay tuned on that. We'll have a lot of interesting conversations in D.C. and if you can't make it to Washington, then stay tuned with our coverage online.

A (32:40)

Yep. All of that direct coverage will be available for people to follow online. Be able to tune in and find out what's going on. We will, as usual, have a huge amount of analysis from the World bank meetings telling you exactly what's going on, making sure that if you're not able to be there, then you'll be up, you'll be kept up to date. It just remains for me to say thank you very much to both my guests and to you, the audience, and we wish you well and we'll see you next week.

B (33:02)

Thank you.