Policy Updates

On 13 March 2024, Sweden announced a new agreement between Sida and the USAID, which is set to advance sustainable development initiatives, prioritizing local initiatives and engaging the private sector closely.

The agreement was officially sealed in Washington DC on 4 March by Sida's Director-General Jakob Granit and USAID Deputy Administrator Isobel Coleman.

The agreement, slated to span the next four years, introduces new focus areas including digitalization, cybersecurity, the enhancement of global public goods like food security, climate action, and the improvement of transparency and oversight in development.

On March 12, 2024, US President Joe Biden's FY2025 budget was sent to Capitol Hill, asking for US$64.4 billion for foreign assistance programs, a decrease compared to his FY2024 request of US$70.5 billion.

FY2024 appropriations have not yet been approved, as Congress has been deadlocked on funding decisions. The FY2024 appropriations, which should have been set by October 1, 2023, have instead been postponed with a series of continuing resolutions to extend budget negotiations. Foreign assistance levels have been the subject of intense debates, including assistance to Ukraine, and proposals by Republicans for serious ODA cuts.

Of Biden's total foreign assistance budget, the bulk of it, approximately US$58.8 billion, will go to the State Department and USAID.

The budget proposal is constrained by the spending deal that Biden reached with Republicans in fall 2023, which capped spending. In the proposal, global health faced the largest cuts with the US' contribution to the Global Fund cut down from US$2 billion to US$1.2 billion, largely due to the fact that US law limits US contributions to no more than one-third of all funding from other donors.

Other funding in the budget includes US$10.3 billion for humanitarian and refugee assistance and US$3 billion for democracy, human rights, and governance. Gender programs are slated to receive US$3 billion. The President's Energy Plan for Adaptation and Resilience is also proposed at US$3 billion, with another US$500 million for the GCF, although the GCF has not received any funds from Congress in recent years.

The budget request also includes US$1 billion for IDA replenishment, of which US$750 million is in guarantees. These guarantees are to unlock US$36 billion in new lending by removing risk from the World Bank's balance sheet.

On March 11, 2024, USAID and the IFRC announced a Global Summit on Extreme Heat, which will be held on March 28, 2024.

The summit was previewed by USAID Administrator Samantha Power during a speech on climate shocks and resilience in January 2024. The meeting would be the first of its kind. Power and IFRC Secretary General Jagan Chapagain will be joined by government and private sector leaders who are working on innovative solutions both to reduce the impacts of extreme heat and to increase climate preparedness.

The summit will be virtual; registration is open to the public.

On February 26, 2024, during the Conference of Government of the CARICOM, the US announced US$16 million for climate and biodiversity threats to the region.

The announcement brought the total of USAID funding to the CARICOM region to US$43 million.

The support is part of US President Joe Biden's PREPARE program, in partnership with the US - Caribbean PACC 2030.

The funding will be directed to addressing threats to marine biodiversity on the coasts of the Caribbean, building climate resilience and increasing climate investments, and addressing water security threats in Haiti.

On February 20, 2024, KOICA’s resident officer in India and USAID's India office signed a memorandum of understanding to strengthen development cooperation partnerships in India, a key country in the South Korean government’s Indo-Pacific Strategy.

The cooperation is intended to support the sustainable development of countries in the Indo-Pacific region through trilateral cooperation between India, the US, and South Korea. KOICA and USAIDare slated to cooperate in four sectors in India:

• Women’s economic empowerment;
• Disaster and climate resilience;
• Digital literacy; and
• Trilateral cooperation.

KOICA and USAID expressed the intention to explore new development projects in India and bolster joint projects between South Korea and the US. The two countries plan to develop a concrete cooperation plan for the empowerment of female social entrepreneurs in India to support the economic empowerment of women in India.

On February 2, 2024, it was announced that Norad joined the partnership launching the GGC launched on the London Stock Exchange, alongside the Nigeria Sovereign Investment Authority, USAID, the GCF, Prosper Africa and the FCDO's MOBILIST program.

The GGC will provide guarantees for institutional investors buying green bonds on the London Stock Exchange, as well as green bonds in the private credit market.

Norad has invested NOK52 million (US$5 million) in the GGC. By 2035, the GGC aims to mobilize US$5 billion in climate financing for partner countries. The launch comes as the IEA urges low- and middle- income countries to increase their investment in renewables by 700% to continue economic growth while limiting the effects of climate change.

On January 30, 2024, USAID Administrator Samantha Power announced additional US support for preparation and resilience against increasingly regular climate shocks, including severe storms, heat waves, floods, and fires, that have disrupted infrastructure, crops, and livelihoods for communities around the world.

Power announced US$22 million through PREPARE for the innovation and the application of renewable energy to significantly scale climate solutions in partner economies. She called for a new approach to address climate shocks by policy-makers and private business to increase community resilience. USAID is slated to provide financial and technical assistance to encourage the private sector to create adaptation services and products.

Power also announced USAID will host the first global summit, featuring leaders from around the world, on extreme heat.

On December 15, 2023, the IRPP criticized Canada for plastic waste dumping in LICs and called on Canada to meet its legal obligations to prevent the practice.

Canada has historically shipped large amounts of hazardous plastic waste to the US, which is often re-exported by the US to LICs. The IRPP criticized Canada's arrangement with the US as a constituting a legal loophole of the Basel Convention on Waste, which restricts its signatories' trade of some hazardous plastic waste. The US is not a signatory of the Basel Convention, unlike Canada, and is not bound by the trade restrictions.

LICs receiving this plastic waste typically lack the infrastructure to manage the additional waste, leading to environmental degradation and serious impacts on the health and human rights of vulnerable people. In failing to meet the Basel Convention’s legal obligation, the IRPP criticized Canada for supporting a system of environmental injustice in LICs.

The IRPP called on Canada to help address the plastic pollution crisis by properly implementing its treaty obligations under the Basel Convention and prohibiting any export of hazardous plastics to LICs, both directly and indirectly through the US.

On December 6, 2023, the US announced additional commitments to address the climate crisis at COP28 through the US' PREPARE program and various funds for climate resilience initiatives in urban areas across the globe.

USAID Administrator Samantha Power and Special Presidential Envoy for Climate John Kerry made a joint announcement that 21 companies were joining the private sector's call to action under PREPARE. It is expected that the private sector's involvement will mobilize US$2.3 billion in adaptation finance.

Power also announced that USAID committed US$53 million to address a range of climate change issues in 23 cities across Asia, Africa, Latin America, and the Caribbean. The program is intended to help cities reduce climate risks and air pollution, as well as decarbonizing transportation modes, transitioning buildings to net-zero emissions, and accelerating adaption of innovative solutions to climate issues.

On December 4, 2023, during COP28, the US announced it would invest in a new public-private partnership to create a new privately-run climate guarantee company known as the Green Guarantee Company.

The Green Guarantee Company will be the first private company created to mobilize green bonds and loans in countries across Africa, Asia, and Latin America. The US, through USAID, the US State Department, and Prosper Africa, is joining the UK, the Green Climate Fund, Norfund, and the Nigerian Sovereign Investment Authority to contribute US$100 million to the initial balance sheet of the Green Guarantee Company.

Experts estimated that the initial contribution will allow the Green Guarantee Company to raise US$1 billion in new climate finance capital by 2024. The US contribution is US$10 million. The Green Guarantee Company is slated to use its finances to de-risk private capital towards climate solutions.