Foreign aid suffered an unusually sharp contraction in 2025, leaving many countries searching for other sources of money to protect public services, humanitarian programmes and development spending. A new study titled ‘Debt relief and remittances can offset foreign aid cuts for most countries, but some remain locked out,’ published in arXiv preprint by Andrea Vismara, Rafael Prieto-Curiel and Rosie Hayward, examines whether reducing external debt payments or increasing money sent home by migrants could help fill that gap.
The researchers estimate that bilateral foreign aid cuts affected 130 recipient countries and removed about $25.9 billion in financing, equivalent to a 9.5% reduction in total foreign aid flows to those…