Jayati Ghosh: Step up to prevent mutually assured destruction

If wealthier countries refuse to provide for the global common good, the multilateral system as we know it will not survive.  (Reuters)
If wealthier countries refuse to provide for the global common good, the multilateral system as we know it will not survive. (Reuters)
Summary

The world has been going down a ‘MAD’ path. It’s in the interest of other wealthy nations to plug gaps left by the US withdrawal from global institutions like the WHO. Rising health vulnerabilities are enough to justify sustained support for multilateral efforts.

Towards the end of the ancient Indian epic, the Mahabharata, Krishna’s Yadava clan self-destructs. Many dark omens presage their downfall: nature behaves erratically and pests multiply. Sin, deception and violence proliferate, eroding trust and solidarity. Clan members humiliate and insult elders. When Krishna’s extended family goes on a picnic, the men get drunk, argue and attack each other, until eventually all of them are dead.

This cautionary tale has gained new resonance as geopolitical tensions—including in South Asia—escalate and many countries embrace protectionist policies. US President Donald Trump’s second administration has contributed significantly to the current fragmentation and disorder. But other wealthy countries have exacerbated the situation by failing to show any real solidarity in response to Trump’s hostile policies.

Also Read: This time for Africa: With USAID slashed, India and Japan must step in to support development

The lack of development cooperation is a prime example of this growing appetite for mutually assured destruction. To be sure, aid from donor countries was already declining. The covid pandemic exposed the system’s injustices and highlighted Western governments’ greed, undermining trust in their global leadership. Moreover, these governments have directed most of their dwindling foreign-aid budgets to Ukraine since Russia’s 2022 invasion, diverting funds away from other war-torn and desperately poor countries, underscoring the largely self-serving approach to such ‘charity’ flows.

Still, it is surprising and dispiriting that other donor countries have not stepped up after Trump terminated almost all US foreign-aid funding and programming. This would have been the obvious thing to do, not necessarily out of solidarity, but simply because of geopolitical self-interest.

Also Read: USAID squeeze: Trump’s cut-back of aid is a wake-up call for India

For starters, Trump’s indiscriminate attacks on allies and rivals alike have demonstrated the necessity of coordinated action—building alliances, supporting multilateralism and cultivating soft power. One easy and relatively cheap way to do that is continuing to support multilateral institutions. Such funding may also defuse some of the anger that many in the Global South feel about Western complicity in the ongoing mass killings in Gaza.

Moreover, the massive reduction in US direct aid and financing for international organizations will hinder the provision of global public goods, including healthcare and climate stability. The concept of global public investment suggests that all countries have a stake in solving these challenges and should thus contribute resources to address them, according to their means, and distribute the collected funds based on need and impact.

But the response of most rich countries has been appalling so far. Instead of scaling up foreign assistance, several European governments have slashed it, citing the need to channel funds to defence investment. As a result, some of the most immediate needs that fall under a global public investment framework are going unmet.

Also Read: Elusive peace: India shouldn’t wade into the Ukraine quagmire

This is especially baffling because the amounts required to plug the development-financing hole left by the US are so small as to be trivial.

For example, Trump’s withdrawal of the US from the World Health Organization—which remains absolutely critical for managing global health threats—means that the WHO faces a $1.9 billion budget shortfall in 2026-27—a gap that rich countries and even most large middle-income countries could easily afford to fill.

It’s a similar story at other international organizations. The United Nations World Food Programme now faces an estimated 40% reduction in funding—equal to roughly $4 billion. The WFP, which served more than 100 million people in 2024 and won the Nobel Peace Prize five years ago, must now downsize its staff by nearly one-third (around 6,000 positions worldwide) and reduce the amount of life- saving food that it provides, because no other countries have offered to offset the shortfall.

Also Read: When Yusuf Hamied defied Big Pharma in the battle against HIV/AIDS

Similarly, the Joint UN Programme on HIV/AIDS (UNAIDS), which relied on the US for more than 40% of its financing, will need to cut more than half of its workforce and reduce or eliminate some of its essential programmes. 

Switzerland and the United Kingdom, two other major UNAIDS funders, have likewise reduced their contributions. That could lead to six times more HIV infections and a 400% increase in AIDS deaths by 2029, as well as the emergence of new strains, which would have negative repercussions for all countries. But the organization’s budget gap is a modest $58 million—the same shortfall facing the UN Office for the Coordination of Humanitarian Affairs, which has to lay off a fifth of its staff.

Given these minuscule sums, filling the gap left by the US would have a negligible fiscal impact on traditional donors and large middle-income countries. But only a handful of countries, like South Korea, have responded to the funding crisis, preventing essential organizations’ collapse and enabling them to function properly—for now.

If wealthier countries refuse to provide for the global common good, the multilateral system as we know it will not survive. ©2025/Project Syndicate

The author is professor of economics at the University of Massachusetts Amherst, and co-chair of the Independent Commission for the Reform of International Corporate Taxation.

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
more

topics

Read Next Story footLogo