The Political Economy of funding cuts: Towards Resource Re-mobilisation as a Framework of Action
Budget cuts and funding freezes have been sweeping the non-profit humanitarian and development sectors globally as donor governments in the Global North rethink their foreign policies amidst drastic geopolitical and economic shifts. This article explores the interwovenness between foreign funding and the global capitalist economy, proposing alternative ways of resourcing as a framework of action.
Historically, the global economy has held a colonial legacy of control over natural, capital and human resources, shaping the unequal material realities between global north and global south populations. In the context of neoliberal and capitalist economy that is shaped by colonial remnants, the sustainable development potential in the global south largely relies on capital mobilisation from the global north. This dynamic is a feature of the transactional relationship between donor and grantee governments, as directed by international relations between nation states that have economic, diplomatic, security and political interests that vary according to global power shifts. With the increased dominance of the United States after the second world war, international aid became a main component of the foreign policy of global north countries, slowly and increasingly building the dependency of global south countries on it to serve their populations.
In recent years, the shift to right wing politics in western donor governments accompanied global crises such as the Covid-19 pandemic, drastic climate degradation, wars and political instability, destabilising national, regional and international economies, pushing governments with capital concentration to be more aggressive and explicit with their resource provision behaviors, to either preserve or gain power in times of uncertainty. We can see this materialise through the stop-work order that was authorised by the Trump Administration in January 2025. Similarly, governments such as The Netherlands, that don’t engage in international politics as directly as the United States, have slashed their funding and shifted their priorities drastically after the election of a new right-wing government in mid-2024. According to the Organisation for Economic Co-Operation and Development (OECD), the total Official Development Assistance (ODA) by development assistance countries saw a 7.1% decrease in 2024, in comparison to 2023.
Funding cuts continue to jeopardise the economic and political stability in global south countries. Lack of funding poses significant threats to human rights as governments and civil society’s become less capable to support the economic, social and environmental realities of populations, risking the exacerbation of crises and inequality.
Economist Bhumika Muchhala from The Third World Network, an independent non-profit international research organization, explores capital flow between the Global South and Global North in her article entitled A Feminist Social Contract Rooted in Fiscal Justice: An Outline of 8 Feminist Economics Alternatives. She explains that in order for substantial change to take place, the global economic system must radically change, starting with the systematic processes that shape systemic economic injustice at micro and macro levels.
The creation of alternative social, economic and educational infrastructure is needed at this point marked by fast-paced geopolitical shifts, global degradation and right wing politics. Alternatives are needed to tackle the systematic processes and fiscal policies that shape the capital flows between global north and global south. The rethinking of funding sources and mechanisms in development and humanitarian work is essential for all stakeholders, in order to curb heavy foreign funding dependence that continues to destabilise the material conditions of the global south population. Alternative infrastructure that directly meets the needs of populations and that is not funding-dependent is essential for sustainable development and improvement of the lives and well-being of global south populations.
Resource re-mobilisation as a framework of action
During the September-November 2024 of Israeli full-scale aggression on Lebanon, informal and organized civil society groups, organizations and individuals bore the responsibility of crowdfunding, procuring and distributing basic assistance for more than 1 million displaced people all over the country. Individuals and groups had access to resources that were directed to support the urgent needs of a vast number of displaced people. These resources were social, economic and technical signaling the abundance of already existing abundant resources in local communities.
Activist groups, organizations and collectives were able to meet the direct needs of a large number of people in a short matter of time by investing in their capabilities, re-mobilising and re-distributing resources from one place to another and from one community to another. This transfer can be adopted as a model of mutual support on a larger scale because it has the ability to bypass systemic challenges.
This case is evidence that communities possess resources, and that they have the capabilities to acquire them through social channels, in a critical time where the intervention of aid and relief agencies was derailed and delayed, and the role of the Government of Lebanon was limited due to its weak public infrastructure and emergency preparedness.
Resource re-mobilisation and re-distribution that is built on the premise of identifying and utilising existing capacities and capabilities requires the adoption of the framework of economic justice. This involved centralised short-circuit, self-sufficient and community-led economies based on the reorientation of unequal economic and social dynamics, that would contribute to building alternative physical arrangements and modes of societal organization needed for the just operation of society.
Most importantly, when visualising community-led work, the concept of solidarity and reciprocity are concretised, strengthening communal bonds between individuals that belong to different backgrounds. Drawing back to foreign aid dependency and the resource scarcity it reinforces, the interests and struggles of communities to improve their realities have been co-opted by conditional funding that limits the scope of development work and pushes into prioritising reportable impact over process, compromising the social and communal relations needed for any change to occur. Communal work directed at mobilising resources to meet the need for food, water, healthcare, housing, education, labor and clothing of everyone has the potential to resist co-optation because it restores the importance of these relations as a viable and sustainable resource.
It is not an understatement to say that the recent years of war and genocide reveal how geopolitical dynamics and global economic shifts impacted our daily life, pushing our societies into into material and psychological impoverishment, risking their eventual disintegration. Communities can fight deprivation by reinstating their self-sufficient nature, negating the discourse of “lack of capacity” describing them as perpetually malfunctioning or vulnerable. On the contrary, communities are resourceful and are able to bring life to a reality of justice and abundance built on sustainable and universalist norms and values that shape the building blocks of economic, social and political life that is not confined to the global economic system and its conditional financing.
