Foreign aid is being cut, but business will keep fighting poverty
It’s easy to feel discouraged these days about international development. The new US administration has proposed cutting the foreign aid budget by nearly a third and eliminating certain programs. Even if the US Congress manages to salvage some of these funds, the fight against global poverty seems at risk of losing momentum.
But it’s worth remembering that there is another force out there that I believe will maintain, and even increase, progress against poverty: business.
In the past 10 years, private sector investment to developing countries has been growing faster than foreign aid. Indeed, developing countries now receive 27% more foreign business investment than development aid – a trend likely to grow over time. Even the lowest-income countries, as classified by the World Bank, have seen business capital flow into their economies at dizzying rates, with investment increasing nearly nine-fold since 2000.