The Economics Show

What future for aid and development? With Minouche Shafik

Feb 27, 2025

Minouche Shafik, an accomplished economist and member of the House of Lords, shares her insights on the shifting landscape of international aid. She discusses the UK's recent budget cuts and the potential decline of generous health and education initiatives. The conversation highlights the rise of authoritarian powers like China in the aid sector and the need for quality over quantity in foreign assistance. Shafik also emphasizes the importance of long-term policy vision, especially in addressing challenges in global health and demographics.

32:31

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Episode guests

Dame Minouche Shafik

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Episode notes

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Quick takeaways

Significant reductions in aid budgets among wealthy nations reveal a troubling shift towards prioritizing domestic issues over international assistance.

The rise of emerging powers like China is transforming the aid landscape by linking assistance to commercial interests, raising ethical concerns about sustainability.

Deep dives

The Shift in Global Aid Dynamics

The podcast emphasizes the recent decline in aid budgets, particularly following significant changes in U.S. foreign policy, such as the suspension of foreign aid under the Trump administration. This shift has contributed to a wider trend among wealthy nations, where traditional aid budgets have been reduced in favor of domestic priorities, leaving low-income countries vulnerable. Concurrently, new financial flows have emerged from rising powers like China and India, changing the landscape of global aid and development. It raises important questions regarding the future structure and effectiveness of international aid amidst these geopolitical changes.

Intro

2min

Shifting Trends in International Aid

14min

Technological Advancements and Their Impact on Global Health

2min

Navigating Global South Dynamics

11min

Investing in Future Generations and Long-Term Policy Vision

2min

Concluding Insights on Aid and Development with Service Solutions for Professionals

2min

US President Donald Trump has frozen all foreign aid payments, while Elon Musk is putting America’s biggest development agency, USAID, “through the woodchipper”. Meanwhile, the UK government has just announced it will slash its aid budget from 0.5% to 0.3% of GDP. So are the days of generous programmes to promote health and education in the poorest nations now over? And should we fear that rising authoritarian powers, most notably China, are stepping into the breach with their own funds and parallel institutions? In an interview recorded just before the UK’s announcement, Alan Beattie speaks to economist Minouche Shafik, who is a veteran of the international development scene. She has worked at the World Bank, IMF, and the UK’s Department for International Development. And she is not optimistic.

Alan writes the Trade Secrets newsletter. You can sign up here. He is on Bluesky at @alanbeattie.bsky.social.

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Presented by Alan Beattie. Produced by Laurence Knight. Manuela Saragosa is the executive producer. Audio mix and original music by Breen Turner. The FT’s head of audio is Cheryl Brumley.

Read a transcript of this episode on FT.com

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