Foreign assistance from Southeast Asia to fall more than $ 2 billion next year | News

Development financing in Southeast Asia is expected to drop by more than $ 2 billion in 2026 due to recent cuts by Western governments, according to a large Australian reflection group.

On Sunday, the Lowy Institute, based in Sydney, predicted in a new report that the development aid of Southeast Asia will fall to $ 26.5 billion next year, against $ 29 billion in 2023.

The figures are billions of dollars below the pre-countryic average of $ 33 billion.

Bilateral funding should also drop by 20%, compared to around $ 11 billion in 2023 to $ 9 billion in 2026, report.

The cuts strike the poorest countries in the hardest regions, and “the priorities of the social sector such as the health, education and support of civil society which are based on the financing of bilateral aid are likely to lose the most”, according to the report.

Less alternatives

Cups by Europe and the United Kingdom were made to redirect the funds while NATO members plan to raise defense spending around 5% of the gross domestic product (GDP) in the shadow of the Russian war against Ukraine.

The European Union and seven European governments will reduce foreign aid by $ 17.2 billion between 2025 and 2029, while this year, the United Kingdom has announced that it would reduce foreign aid expenses by $ 7.6 billion per year, report.

The greatest upheaval came from the United States, where President Donald Trump closed the American international development agency (USAID) and has reduced nearly $ 60 aid. More recently, the US Senate has taken measures to recover $ 8 billion in additional expenses.

The Lowy Institute said that governments closer to their homes, like China, will play an increasingly important role in the development landscape.

“The center of gravity of the financial landscape of the development of Southeast Asia seems ready to derive east, especially in Beijing but also in Tokyo and Seoul,” said the report. “Combined to potentially weaken trade links with the United States, the countries of Southeast Asia are likely to end up with less alternatives to support their development.”

After having experienced a sharp decline during the COVVI-19 pandemic, Chinese development aid abroad began to bounce back, reaching $ 4.9 billion in 2023, according to the report.

However, its expenses focus more on infrastructure projects, such as railways and ports, rather than the problems of the social sector, according to the report. Beijing’s preference for non-concessional loans granted to commercial prices benefits the middle and high income countries in Southeast Asia, but is less useful for its poorest, such as Cambodia, Myanmar, Laos and East Timor.

While China and institutions such as the World Bank and the Asian Development Bank play a larger role in Southeast Asia, it is less clear how Japan and South Korea can fulfill whites, according to experts.

Japan, South Korea

Grace Stanhope, a research partner of the Lowy Institute and one of the authors of the report, told Al Jazeera that the two countries have expanded their development aid to include civil society projects.

“(Although) support for Japanese and Korean development is often less openly based on ” values than traditional Western aid, we have seen Japan, in particular, entering the governance and civil society sectors, with projects in 2023 which are explicitly focused on democracy and the protection of vulnerable migrants, for example,” she said.

“The same goes for Korea (South), which recently supported projects to improve the transparency of Vietnamese courts and the protection of women against sexist violence, so that the approach of Japanese and Korean development programs evolves beyond infrastructure.”

Tokyo and Seoul, however, face pressures similar to those of the Trump administration Europe to increase their defense budgets, reducing their development aid.

Shiga Hiroaki, professor at the Graduate School of International Social Sciences at Yokohama National University, said that it was more “pessimistic” than Japan could intervene to fill the gaps left by the West.

He said cuts could even be made while Tokyo increases defense expenses to a historic summit, and a “Japanese” right -wing party puts pressure on the government to redirect the funds at home.

“Given the budgetary and public opposition from Japan to tax increases, it is very likely that the aid budget will be sacrificed to finance defense expenses,” he said.