Devex Newswire: Want to send money back home? Trump wants you to pay a price

The Trump administration has stripped many lower-income nations of the U.S. foreign assistance they’ve come to rely on. Now, it’s coming after their diasporas.

Also in today’s edition: Opinions are all over the place on how to deal with the unsustainable debt loads in lower-income countries, but one thing is clear: The status quo isn’t sustainable either.

+ Are you heading to Seville for the Financing for Development, or FfD4, summit this month? Come to Casa Devex! From June 29–July 1, Devex will host an exclusive gathering space for FfD4 delegates featuring nightly networking, journalist-led briefings, and partner dinners. Request your invitation or learn more about partnering with us.

A taxing possibility

Remittances blow foreign aid out of the water. These transfers — money sent back home from abroad — equaled more than $800 billion in 2023 — including $85.8 billion just from the U.S. — while official development assistance totaled $223.3 billion that same year.

But the Trump administration is proposing a 3.5% tax on financial transfers sent by non-U.S. citizens, a move that could cripple a vital economic lifeline at a time when so much foreign aid is already being severed.

“In places where the government doesn't really have economic viability or programs to fit into the local communities, those remittances were lifesavers,” Ariel Ruiz Soto of the Migration Policy Institute tells my colleague Jesse Chase-Lubitz.

But to the White House, those remittances represent a chance to stem immigration to the United States, since only non-U.S. citizens would feel the tax pinch.

But many experts say the opposite will happen — less money from abroad could lead to more poverty that in turn leads to even more migration. Moreover, immigrants could start using illegal channels to funnel money back home to loved ones.

“Many migrants send a substantial portion of their earnings back home,” says Marcela Escobari of the Brookings Institution. “Within these countries, the poorest regions — often rural areas where families depend on every dollar sent — will feel it first.”

“Until a few years ago, the world was singing praises of countries providing opportunities to people from low-income countries to work and send remittances and how those remittances helped jump-start the development process or contribute to it,” says Ijaz Nabi of the International Growth Centre, based at the London School of Economics and Political Science. “But of course, the United States has an administration that doesn't see the world that way.”

Read: What a 3.5% tax on remittances could do to the developing world

+ Listen: For the latest episode of our weekly podcast episode, Devex’s Rumbi Chakamba, Michael Igoe, and Ayenat Mersie discuss the Trump administration’s 2026 budget proposal and other top global development stories from the week.

All too common

Not all debt is the same. And not all debt restructuring is the same.

In fact, many experts say the international community’s main vehicle for restructuring sovereign debt, known as the G20 Common Framework, has thus far been a big letdown.

“Very few cases have moved through the Common Framework,” said Eric LeCompte of the Jubilee USA Network. “Even though two-thirds of African countries, as well as low-income countries, are spending more on debt than on social services, education, and health combined, they continue to make payments because they don’t feel the framework will actually help them to quickly get out of the crisis.”

LeCompte joined a panel of experts for a recent Devex Pro briefing on debt, moderated by Jesse, ahead of the Fourth International Conference on Finance for Development, or FfD4, starting this month in Spain.

All of the panelists pointed to problems with the framework, which represents a hodgepodge of creditors with often-competing interests, while lacking voices that could make it more of an inclusive venue.

While opinions differed on solutions, panelists broadly agreed on what’s needed: clearer rules, more timely interventions, and mechanisms that avoid pitting different types of creditors — and debtors — against each other.

Avinash Persaud, special adviser to the Inter-American Development Bank president and architect of the Bridgetown Initiative, cautioned that the current framework lumps very different debt challenges together.

“Debt is very heterogeneous,” he said. “The vast majority of poor people in the world live in a middle-income country, which is indebted to private creditors for whom the Common Framework has no relevance.”

Interestingly, Persaud stressed that countries should feel safe defaulting on unsustainable debt, but many don’t — because of what he referred to as the “fear of fund” — i.e., the stigma and austerity conditions attached to the International Monetary Fund.

“The big problem is countries aren’t defaulting enough,” he argued. “We need to find ways of reducing that fear so unsustainable debt is restructured as early as possible.”

Watch: Calls for overhaul of global debt architecture intensify ahead of FfD4 (Pro)

+ Upcoming in our “Road to Sevilla” event series previewing FfD4 is a briefing on June 26 with Rémy Rioux, the CEO of the French Development Agency, on the evolving role of European development finance institutions in the current aid landscape. Save your spot here.

The series is part of our exclusive offerings for Devex Pro members. Not yet gone Pro? start your 15-day free trial today and access all our exclusive reporting and events, funding data and expert analyses, the Pro Insider newsletter, and more.

It’s only natural

With the decline of traditional foreign aid, some food system proponents are seizing the moment to return to agriculture’s more traditional — less industrialized — roots.

Agroecology — a farming system that works in sync with nature to grow food that is healthy for people, animals, and the planet — is part of this big rethink taking place in Africa, writes Devex contributor David Njagi.

The continent spends about $50 billion annually on food imports despite containing 60% of the world’s uncultivated arable land. Meanwhile, for decades, the U.S. has poured billions into initiatives such as USAID’s Feed the Future program, which aimed to improve agricultural production and food security — but, in activists’ view, did a great deal of harm by pushing industrial agricultural policies.  

Some of the trends activists are promoting have been gaining momentum for years — such as locally developed seeds and indigenous crops — but may see renewed attention in light of aid cuts.

“In general, what Africa needs is a narrative that helps the continent achieve its food security in terms of availability, access, usability, stability, and sustainability, by taking charge of its food policies and freeing land ownership from external influence,” says Million Belay of the Alliance for Food Sovereignty in Africa.

Belay argues that African food systems must be “rooted in people, in place and in power,” and driven by production that protects soil health and reduce farmers’ debt — while also reducing Africa’s dependence on big agribusiness for seeds and fertilizers.

Read: Aid cuts spark a rethink of African food systems rooted in agroecology

+ For more content like this, sign up for Devex Dish — a free, must-read Wednesday newsletter — to keep up to date with the race to remake a more equitable and sustainable global food system.

Consult this

That’s how much consulting opportunities dropped between late January and late May compared to the same period in 2024, according to Devex job board data. The decrease has been especially steep for long-term contracts, which fell by 32%, while short-term roles declined by 19%.

Consultants are used to being flexible and having to adapt — but today’s aid drain is testing the most seasoned and resilient consultants. Delayed payments, paused procurements, and increased competition for a shrinking pool of assignments are taking a tremendous toll on the sector.

Despite the overall downturn, my colleague Raquel Alcega writes that more than 16,000 consulting jobs were still posted on Devex during the first quarter.

In other words, the opportunities are there but the rules are shifting. Our new Devex Consulting Survival Guide offers a snapshot of this evolving landscape and practical ideas for consultants looking to stay competitive.

Among the lessons you’ll learn:

• Why networking is more important than ever and how to improve your approach.

• The consulting skills that are in demand as the sector continues evolving.

• Who is still hiring consultants in a reshaped recruitment landscape.

• How to approach contract and rate negotiations in the new normal.

• What the future may hold for the consulting profession, and much more.

Read: How development consulting jobs fell 25% — and how to adapt

+ Sign up to Devex Career Hub, our free, Friday newsletter to get global development’s top jobs and expert career advice — and for more opportunities, check out our weekly Jobs Alert newsletter published directly on LinkedIn.

In other news

Aid leaders are urging Yemen’s Houthi rebels to immediately release detained humanitarian workers, including U.N. staff, who have been in captivity for a year. [The Telegraph]

The World Food Programme is urgently seeking $46 million to provide food assistance over the next six months to 2 million people facing severe hunger in Haiti. [AP]

Israel has been accused of arming a Palestinian militia which allegedly looted humanitarian aid convoys in Gaza, exacerbating the region's humanitarian crisis. [The Guardian]

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