With the U.S. Agency for International Development officially ceasing operations as the main U.S. foreign aid agency on July 1, the State Department now faces the daunting task of spending an estimated $20 billion before the fiscal year ends on Sept. 30 — without the 10,000 staff members who previously managed such distributions. The administration is legally required to spend money appropriated by Congress, or find legal justification for not spending it, as seen in earlier rescission efforts that returned $9 billion to the U.S. Treasury.

Meanwhile, USAID Deputy Administrator for Management and Resources Ken Jackson's recent tour of nine countries — including Belgium, Kenya, and the Philippines — to oversee mission closures, has drawn criticism from displaced staff who view the visits as poorly timed during their difficult transitions.

With many NGOs forced to restructure or face closure, some organizations are exploring mergers and partnerships to survive, with a new initiative led by Accountability Lab helping them pivot.

Devex Business Editor David Ainsworth discusses the latest developments in these stories with reporters Michael Igoe and Elissa Miolene.

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While the abrupt cuts to official development assistance and closure of the U.S. Agency for International Development have upended the existing global development landscape and multilateral framework, they also represent an opportunity to reimagine a more just and equitable international system, said Open Society Foundations President Binaifer Nowrojee.

In a podcast recording with Devex President and Editor-in-Chief Raj Kumar at Casa Devex during the Fourth International Conference on Financing for Development in Sevilla, Spain, Nowrojee emphasized the shifting power dynamics that are emerging and the need to focus on building strong domestic institutions and national capacity. “What we have is national architecture that’s completely underused. National development banks could play a role and build a different set of economic opportunities inside countries,” Nowrojee said.

The conversation also emphasized the urgent need to mobilize domestic resources to close the development finance gap — including through better international tax cooperation to help counter the $200 billion lost annually through corporate tax avoidance — and a fairer approach to debt. Today, 3.3 billion people live in countries that spend more on debt repayments than on health or education. “The global north actually gives pennies in aid compared to the dollars flowing out of the global south,” Nowrojee said.

This special episode of This week in global development podcast was sponsored by the Open Society Foundations.