Development finance under strain

Developing countries left Washington with a promise of more financing, but also with a sharper warning that aid is shrinking fast. (worldbank.org) (un.org) At the International Monetary Fund and World Bank spring meetings, held in Washington from April 13 to 18, officials pushed a jobs agenda built around infrastructure, energy and private investment. (worldbank.org) (sdg.iisd.org) The World Bank-IMF Development Committee backed work to “unlock opportunities” in infrastructure and energy, while meeting coverage said the two institutions pledged up to a combined $150 billion in new financing for countries hit hardest by the energy shock. (sdg.iisd.org) (business-standard.com) The squeeze is coming from both sides. A United Nations financing report said official development assistance fell 6% in 2024 to $214.6 billion and then dropped another 23% in 2025, while debt service in developing countries hit a 20-year high in 2024. (un.org) That leaves poorer governments trying to fund power imports, roads and social spending with less grant money and more expensive loans. The same UN report said least developed countries could face aid declines of as much as 25%. (un.org) Officials used the meetings to argue that private capital has to fill more of the gap. The spring-meetings coverage by IISD said the main pitch was to create jobs at scale by improving the business climate, investing in physical and human infrastructure, and mobilising private capital. (sdg.iisd.org) A second response was to give borrowers a stronger collective voice in debt talks. On April 15, finance ministers and central bank governors from eligible developing countries launched a UN-backed Borrowers’ Platform during the spring-meetings week in Washington. (unctad.org) UN Trade and Development, known as UNCTAD, said the platform will support debt management, transparency and representation for borrowing countries in global debt discussions. Egypt’s finance minister, Ahmed Kouchouk, and Pakistan’s finance minister, Muhammad Aurangzeb, were listed for the launch. (unctad.org) The platform was agreed at the Fourth International Conference on Financing for Development in July 2025 under the Sevilla Commitment. UNCTAD said it is meant to address a system in which creditor coordination has expanded while developing-country borrowers remain underrepresented. (unctad.org) The meetings ended without any quick fix for the wider funding gap. The official line out of Washington was more investment, more coordination and more debt-management support, as developing countries face falling aid, high debt-service bills and fresh energy-price pressure at the same time. (imf.org) (un.org)