Aid Cuts Threaten Global Economic Stability Amid Iran War

Cuts to overseas aid by countries including the US and the UK risk stoking global economic instability amid the humanitarian crisis resulting from the Iran war, according to David Miliband, former British foreign secretary and head of the International Rescue Committee (IRC).

Miliband criticized the US for abandoning its aid program under Donald Trump, which he believes will worsen shocks to the global economy, affecting both poor and wealthy countries alike. He also expressed regret over the UK's aid budget cuts under Keir Starmer's government, stating that supporting the world's poorest is morally right and a sound investment for Britain.

Humanitarian Crisis and Global Instability

An untended humanitarian crisis can incubate political instability, Miliband warned, emphasizing the interconnectedness of the world. The Iran war demonstrates this connection, with its impact felt from poor to rich countries.

Speaking at the International Monetary Fund and World Bank meetings in Washington, Miliband noted that the Middle East conflict will increase global poverty and risk displacing millions of people. He drew parallels with the 2016 European refugee crisis, highlighting the potential for conflict to drive human migration.

Western governments' decision to cut overseas aid budgets removes crucial support that could help prevent future global economic instability, Miliband argued. This comes at a time when warfare and threats to food security are rising globally.

The United Nations estimates that 32.5 million people globally could be plunged into poverty by the economic fallout from the Iran war, with developing countries expected to be hit hardest. Soaring global energy and fertiliser prices, exacerbated by the closure of the Strait of Hormuz, have created a 'food security timebomb' with the potential to cause widespread hunger.

Aid Spending Cuts

Figures from the Organisation for Economic Co-operation and Development show that rich countries cut aid spending by $174.3 billion in 2025, a decline of almost a quarter from 2024. Miliband criticized the US under Trump for abandoning its leadership role in global development, stating that this decision will have a net negative impact.

Miliband also reflected on the UK's aid budget cuts, expressing regret and citing evidence that links lower levels of British aid to rising fatalities worldwide. He emphasized that Britain's aid budget is not only morally justifiable but also a sound investment, as it aligns the country's words and deeds.