Stubborn Things, Stubborn Thought: Thinking Through Development’s Crossroads Moment

“A pessimist sees difficulty in every opportunity; an optimist sees opportunity in every difficulty.” — Winston Churchill

And so where does that leave us? Many of the development programs, budgets, and institutions that we’ve known for years are gone or have been sharply reduced. Not just here in the U.S., but across Europe and at the United Nations (including institutions like the World Food Program and the UN Development Program). But all of these changes pale in comparison to the broader, more impactful changes that have been taking place out there —in the field and around the world.

Technology and innovation. We have new medicines, new treatments, new tests…new seed varieties, irrigation methods, weather forecasting tools, and more. And we have the frugal technologies (like mobile phones, civilian drones, and 3-D printers) to extend them to remote places.

Evolving Financial Flows. Official Development Assistance, better known as foreign aid or “ODA,” used to make up well over 80% of the monies flowing into the developing world from America and the “donor community.” Even before the cuts of 2025, ODA had fallen to below 10%. It’s been surpassed by foreign direct investment and, more than anything else, international remittances. If we only debate ODA levels, aren’t we “losing the forest for the trees?”

Rising Debt. For every $1 China provides in ODA, it lends $35…which is just one reason why, according to World Bank figures, 32 African nations are now spending more on debt service than they do on health or education.

Rising Youth. Africa is young, very young, with a median age in places like Tanzania of only 16. This “youth bulge” is challenging the ability of leaders to create enough good jobs and rewarding economic opportunities for a generation that is better educated  —and better informed— than their parents.

To be clear, none of this, including the relative decline in ODA, is an argument for further deep cuts to assistance or ending all of the programs assistance has powered. It’s an argument for spending it more strategically…in ways that unlock the full development impact of the other flows…investment, commerce, remittances, etc. It’s an argument to fill in the gaps —the areas not addressed by other financial sources— and to incentivize reforms that attract more private investment, especially catalytic investment.

In the first Trump Administration, we planted some of the seeds for a new approach. Our “Journey to Self-Reliance” framework (which relied upon objective, outcome-based metrics) was designed to focus our attention on those attributes countries needed for strong economic growth, impactful development, and “self-reliance.” We expanded the tools and reach of the Overseas Private Investment Corporation (even giving it a new name, the US Development Finance Corporation, or DFC). With the launch of our “Private Sector Engagement Strategy” (the first ever official strategy), we made it easier for private enterprise to participate in development and endorsed the use of innovative financing tools like development impact bonds. The Biden  Administration and the second Trump Administration planted more seeds by expanding the pool of countries that the Millennium Challenge Corporation (MCC) can work with—countries that would see their investment enabling environment improved through the MCC model.

Of course, there’s so much more that a new approach to development could include, for example:

• Conducting constraints to investment analyses (along the lines of MCC’s Constraints to Growth Analysis) to identify, country by country, the barriers holding our partner countries back from receiving even greater levels of American business investment.

• Helping partner countries expand their domestic resource mobilization so they can more effectively capture revenues, reduce their “informal economy,” and better turn revenues into essential government services.

• Offering to lend or “embed” American business talent (perhaps recent business school graduates or retired business executives) in partner countries to help them with strategic planning, policy reforms, and capacity building.

• Encouraging partner countries in their efforts to develop refining and manufacturing capacity closer to the sites of strategic resources (something China is doing in places like Zimbabwe). This will help them go from being mere vendors of resources to true strategic partners—AND create more of the jobs that their growing workforce demands.

When I joined USAID in the first Trump Administration, I reminded everyone that the purpose of our assistance “should be ending its need to exist.” I proclaimed that we wanted our friends go from being aid recipients, to partners, to fellow donors and contributors. All of that is even more true today… and more possible as well.

That’s why we need a new approach to development and why America should continue to lead.