Development funding for Southeast Asia is anticipated to decrease significantly, dropping from $29bn in 2023 to $26.5bn in 2026. Bilateral funding is forecasted to see a 20 percent decline, impacting poorer nations most acutely. Social sectors such as health, education, and civil society are expected to suffer from reduced support. Cuts in foreign assistance are driven by financial reallocations in response to military spending demands, particularly influenced by geopolitical tensions, especially following the Ukraine crisis. Consequently, development financing is expected to shift towards nations like China, Japan, and South Korea.
Development funding to Southeast Asia is expected to fall by over $2bn in 2026 due to cutbacks by Western governments, according to the Lowy Institute.
Bilateral funding is predicted to decrease by 20 percent from approximately $11bn in 2023 to $9bn in 2026, severely impacting poorer countries.
The cuts will primarily affect social sector priorities such as health, education, and civil society support, which depend heavily on bilateral aid funding.
Governments in Southeast Asia will increasingly see China, Tokyo, and Seoul as pivotal players in its development finance landscape.
#development-funding #southeast-asia #foreign-aid-cuts #geopolitical-influence #social-sector-impact
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