Foreign Aid Cuts: Where Does Switzerland Stand?

(MENAFN- Swissinfo) The United States has frozen all foreign aid spending as President Donald trump attempts to dismantle the country's main humanitarian agency. This has an impact on Switzerland, which itself is shaving hundreds of millions from its international development budget.

This content was published on February 7, 2025 - 13:36 7 minutes

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The global trend has sparked outrage from humanitarian groups. Where does this leave Switzerland by international comparison?

In May 2024, the government requested CHF11.27 billion ($12.4 billion) to meet Switzerland's international development ambitions between 2025 and 2028. The spending ceiling was capped to maximum spend of CHF11.12 by parliament. This compares to a CHF11.25 billion budget for the 2021-2024 period.

+ Foreign aid cuts 'mean less help for the needy'

Faced with mounting costs resulting from the Covid pandemic, the global energy crisis and the Ukraine war, parliament has further pared down the 2025 spending plans by CHF110 million, while some CHF321 million in budget freezing savings are forecast for the years 2026-2028.

The Swiss Agency for Development and Cooperation (SDC) has seen its budget cut from around CHF2.16 billion in 2024 to some CHF2.04 billion this year. SDC programmes in Albania, Bangladesh and Zambia will be shuttered by the end of 2028.

External Content Impact of budget cuts

The impact of the US development aid freeze is already being felt by Swiss NGOs. The relief organisation of the Swiss Protestant Reformed Church (HEKS) has announced it will lay off more than 100 employees . Projects in Ukraine, Ethiopia and the Democratic Republic of the Congo will be closed down.

The Lausanne-based NGO Terre des hommes will lose $10 million in annual contributions from the US. Projects in nine countries are affected and around 1.5 million beneficiaries will lose“vital support”, said the children's aid organisation.

Switzerland is also reviewing development projects it runs in collaboration with USAID. This includes development work in Mali, Serbia and Kosovo, representing an investment of CHF14 million, a Swiss foreign ministry spokesperson told Swiss public broadcaster RTS.

Switzerland's own foreign aid funding cuts are not as serious as the US, but will nevertheless impact work in developing countries. The recently announced Swiss budget cuts“do not affect humanitarian aid, peace promotion or support for Ukraine”, the government stated in a press release in January.

This includes a pledged CHF1.5 billion contribution to Ukraine's recovery and CHF1.6 billion set aside for international climate financing.

But Swiss contributions to the international organisations UNAIDS and UNESCO and the Global Partnership for Education, will be discontinued from 2025. Funding for all multilateral organisations, including the UN Development Programme (UNDP), the UN entity for gender equality and the empowerment of women (UN Women) and UNICEF has been cut by CHF30 million this year.

Direct financial support for NGOs will also be slashed by 7.5%. These humanitarian groups will also receive less money for carrying out development work on the ground, as Switzerland and other countries shutter aid projects.

External Content How have NGOs reacted?

“ In the end it boils down to lives not being saved that could have been saved, a slowdown of development and less resilient to climate change in recipient countries,” Andreas Missbach, Director of Alliance Sud, told SWI swissinfo.

“Other countries that have cut development budgets [such as France and Germany] have serious economic problems. Switzerland is a very rich country with a self-fabricated budget crisis, it's a fiction,” he added, referring to Switzerland's rigid debt containment mechanism, known as the Debt Brake, which places limits on national spending.

The US development aid freeze was“not anticipated, not planned. Poof, it's over. And that, for me, is really extreme. I've never experienced that in my thirty-five years in humanitarian work,” Barbara Hintermann, director of Terre des hommes, told RTS.

“Bit by bit they are chipping away at aid to the poorest countries,” Catherine Schümperli Younossian, secretary-general of the Geneva federation for cooperation and development, told SWI swissinfo last November .“Yet world stability depends on including the emerging nations too.”

Global comparison

Several countries, including Germany, Britain, Sweden and France, have also cut humanitarian and development aid budgets in recent times. This trend has been driven by a mixture of hardening social sentiments towards outsiders and immigrants, domestic economic problems and a desire to boost defence spending in the wake of the Ukraine war.

“With slower growth and rising debt servicing costs, developing countries are facing additional fiscal pressures and increasing risk of debt distress” said Organisation for Economic Co-operation and Development (OECD) Secretary-General Mathias Cormann last year.“Long-term structural challenges such as climate change and deepening economic and social disparities, are compounding these pressures.”

US president Donald Trump has gone even further by suspending all foreign aid projects for 90 days and threatening to hobble the United States Agency for International Development (USAID).

The United Nations has set a target for developed countries to spend 0.7% of their national wealth on 'official development assistance' (ODA). But by 2023, only five countries had reached this target, and the average spend was 0.37% of Gross National Income. GNI is seen as a better measure of national wealth than Gross Domestic Product (GDP) as it takes into account income derived from the foreign investments of companies and individuals.

In 2023, the last measurements available, Switzerland spent 0.6% of its GNI on foreign development projects, according to the OECD.

This placed Switzerland as the seventh most generous nation and not far from the UN target of 0.7%. In 2022, Switzerland contributed 0.56% of its GNI to development aid.

External Content How Swiss funds are used

Official Development Assistance (ODA) is categorised as financial support from donor countries for improving such areas as health, education, sanitation, education and infrastructure. Aid typically comes in the form of grants or loans with favourable terms.

Emergency humanitarian aid to alleviate the effects of disasters is also included in ODA accounting, but not military assistance.

The majority of Switzerland's ODA contributions (CHF2.54 billion in 2023) are provided by the Swiss Agency for Development and Cooperation (SDC). The State Secretariat for Economic Affairs (Seco) also provides development funds (CHF389 million in 2023) to support companies with ecological and social goals, strengthen public institutions and for infrastructure projects in target countries.

Other Swiss government agencies, cantons and municipalities made up CHF450 million Swiss ODA in 2023.

A rising share of ODA payments are made in Switzerland to help house and integrate asylum seekers. This share rose to 28% of total ODA spending in 2022 and 2023 (CHF1.3 billion).

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