Cuts to Overseas Aid Amid Iran War Heighten Global Economic Instability

David Miliband, former British foreign secretary and current head of the International Rescue Committee (IRC), has warned that cuts to overseas aid by countries such as the United States and the United Kingdom are exacerbating global economic instability, particularly in light of the ongoing humanitarian crisis resulting from the Iran war. Miliband emphasized that the U.S. aid program's abandonment under former President Donald Trump has intensified these challenges, affecting both impoverished and affluent nations. He expressed concern that the UK government's decision to reduce its aid budget under Prime Minister Keir Starmer is morally and strategically misguided, stating that supporting the world's poorest is essential for both ethical reasons and as a beneficial investment for Britain.

The Guardian

Miliband highlighted the interconnectedness of global crises, asserting that an unattended humanitarian crisis can lead to political instability. He pointed to the Iran war as a prime example of how conflicts can drive poverty and displacement, recalling the European refugee crisis of 2016 as a stark reminder of the consequences of warfare. The United Nations has projected that 32.5 million people could fall into poverty due to the economic repercussions of the Iran conflict, with developing countries facing the most severe impacts. Rising global energy and fertilizer prices, exacerbated by the closure of the Strait of Hormuz, have been described by Miliband as a "food security timebomb," threatening widespread hunger.

The Guardian

Recent figures from the Organisation for Economic Co-operation and Development (OECD) revealed that wealthy nations cut their aid spending by $174.3 billion (£129 billion) in 2025, marking a nearly 25% decline from the previous year. Miliband criticized the U.S. for abandoning its historical role as a global development leader, arguing that this shift undermines both moral and strategic interests. He stated, “For moral and strategic reasons... the US wanted to be, not a global empire, but a global anchor,” lamenting the current administration's explicit intent to relinquish that role.

The Guardian

In response to the UK government's aid budget reductions, Miliband noted a correlation between decreased aid levels and rising fatalities globally. He expressed regret over these cuts, asserting that Britain's aid budget is not only a moral obligation but also a sound investment. He remarked, “It has proved its worth... because aid is one way in which you align your words and your deeds.” Miliband underscored the importance of Labour's internationalism as a vital aspect of its public offering, framing it as a positive attribute rather than a liability.

The Guardian

• “An untended humanitarian crisis is an incubator of political instability.” — David Miliband, Head of the International Rescue Committee

The Guardian

• “There are all sorts of things that America has done wrong in the last 80 years, but it [US aid policy] has had a net positive impact – that role of being a global anchor has been a positive one more than a negative one.” — David Miliband

The Guardian

The ongoing reductions in overseas aid by major economies, particularly in the context of the Iran war, pose significant risks to global stability and humanitarian well-being. As the international community grapples with the consequences of these cuts, the call for a reevaluation of aid strategies becomes increasingly urgent.

The Guardian