The international aid system is facing unprecedented challenges, marked by abrupt funding cuts, shifting geopolitical priorities, and growing skepticism about its effectiveness. In a previous post, we explored how the international aid system is structured and what these recent cuts mean for the different actors involved. But for some this moment is not just a crisis—it’s an opportunity for necessary reform.
To better understand what this shift means, Kuja spoke with experts and activists who challenge the current model and envision alternatives. Their perspectives point to deep structural problems in the aid industry—but also to potential pathways forward.
Aid or Industry?
Degan Ali, a longtime advocate for localization, views this disruption as a long-overdue reckoning. "This is actually an opportunity and a hope. We knew that the system was broken for many reasons. The aid sector has become an industry, and because it's an industry, there are so many vested interests. Nobody wants to do the hard work of taking it apart and fixing it in a dramatic way." According to Ali, the traditional model of aid has failed. "Aid is not the thing that makes us self-reliant and not dependent on external actors. That happens through trade, investments, debt relief, revenue collection, and industrialization."
Ali also points to a broader trend: donor countries, official development assistance (ODA)—the public funds that governments allocate for international aid—is declining across donor countries. "This is not just about Trump—European countries are also reducing their aid commitments. The trend is clear, and it’s not a question of if it will happen, but when and how quickly."
Is Aid Designed to Maintain Dependency?
Sri Lankan economist, Howard Nicholas, argues that the aid system deliberately suppresses self-sufficiency in countries. "All these international institutions, all the aid givers, have one major purpose: to block manufacturing in developing countries. They have no choice because if they don't, we will see an acceleration of the collapse of the West."
He recounts an experience from Sri Lanka: "Thirty years ago, there was a possibility that female entrepreneurs could produce microprocessors in a factory. They needed just a quarter of a million dollars in seed capital. But donor groups refused. A Dutch ambassador told me, ‘You never, ever, bring this issue up again. We are not trying to make rich female entrepreneurs.’"
For Nicholas, the issue is aid’s role in maintaining dependency. "It’s like they were saying: 'We don't mind our own people becoming rich, but this is not for your people'. That’s the trap. The biggest enemies of real economic empowerment are the very NGOs that claim to support it. They live fantastic lives off the
money meant for poverty alleviation, so the moment you talk about financial independence and entrepreneurship, you threaten the entire system."
Sandra Macías, former crisis director for the Global Fund for Women and Co-director of the Alliance for Feminist Movements, claims that the current system does not support self-sufficient economic models."Haiti could perfectly well produce its own rice. But the U.S. flooded the market with cheap rice and told them they couldn’t produce it. This dependency was manufactured to serve U.S. economic interests. The aid sector is political."
The Inequality Within Aid
Beyond questions of dependency, some argue that international NGOs (INGOs) themselves mirror the very inequalities they claim to fight. Venezuelan political scientist and feminist activist Xili Fernández points to the wage gaps within major INGOs.
"There are some very well known INGOs whose CEO earns a million dollars per year. What’s the wage gap between that salary and the salary paid to a colleague in that organization, working as a driver or a cleaner? Such a wage gap is outrageous and hard to justify." The irony, she argues, is that many of these organizations are now facing financial insecurity for the first time. "Some people are in shock because, for the first time, a Global North government considers them corrupt and refuses to fund them. But NGOs, by definition, should be a thorn in the side of the state. When did they become extensions of the states instead?"
Fernández also sees this crisis as exposing deep contradictions within the sector: "They don't want to give up control because localization and decolonization mean ceding power. And they hide behind the argument that decolonizing costs money. Yes, it does—but it must be done."
Macías acknowledges that while some aspects of aid are necessary, the overall structure is unsustainable. "There are certain things civil society organizations simply can’t do—like setting up sanitation systems after an earthquake. But the humanitarian system has colonial roots that cannot be denied. The North-South dynamic of ‘let’s go rescue people’ still exists."
What Comes Next? Rethinking Aid Models
For these experts, the real question isn’t whether the old aid model will survive, but what will replace it. Ali envisions a shift toward truly locally-led aid, one that removes unnecessary intermediaries and directs funding straight to national institutions.
"We need to fund through direct budget support, through ministries, through government systems as much as possible," she argues. "If this is the new reality that we're working under, then we have to not be in a situation of thinking of this as a danger, but thinking of it as an opportunity for true, serious reform," says Ali.
Macías echoes this need for deeper change, calling for stronger South-South cooperation and a reimagining of international collaboration—not as charity, but as a genuine economic and political partnership. "The real challenge is flipping globalization on its head. Before globalization, economies were community-based and deeply connected to nature. Indigenous communities still protect the majority of the world’s remaining ecosystems. We need to focus there."
As funding structures shift and power dynamics evolve, the challenge ahead is clear: Will aid continue to reinforce dependency, or can it finally become a tool for self-reliance?
Resources For More Learning:
Course: History of Inequality in Aid & Development by Kuja.
Talk: The role of economic policies and international institutions in the 'underdevelopment' of Africa by Critical Collective.
Report: Humanitarian funding report 2023 by Development Initiatives.
Podcast: Transforming Humanitarian Aid with Cash Transfers by Center for Global Development