The Trump administration’s announcement of the closure of the United States Agency for International Development (USAID) has had a significant impact on the international community. With an annual budget of $40 billion, USAID is the world’s largest development agency, accounting for 40% of global humanitarian aid funding across more than 130 countries. Its potential disappearance has raised alarms within the United Nations, whose aid programs received a total of $72 billion in 2024, largely from U.S. contributions.

Regardless of whether the agency’s closure materializes, the new U.S. stance on international cooperation and the 2030 Agenda has put multilateral humanitarian aid at risk. This collaborative model—built on joint action by governments, international organizations, and NGOs—has long guided global efforts to support the most vulnerable communities. Its weakening raises pressing questions about the future of international assistance in an increasingly interconnected world.

Regarding climate change—another issue downplayed by the new U.S. policy—2024 has reaffirmed the consensus among experts on the need for private sector participation in financing aid efforts.

At the recent World Water Week, we witnessed the development of financing strategies discussed at the Water for Climate Pavilion during COP29. There, it was highlighted that the world must mobilize up to $7 trillion by 2030 in global water infrastructure if we are to meet our SDG commitments related to water and recover from decades of delays. The financial return on climate adaptation investments was also emphasized: every $55 billion allocated to prevention could yield savings of $245 billion in costs.

The data reflects similar returns in the water sector. Every year, the lack of access to water and sanitation results in $260 billion in global losses. Estimates indicate that every $1 invested in water generates a return of $4. Additionally, European insurance companies say every $1 invested in disaster prevention—such as droughts and floods—could yield up to $15 in return.

This scenario is theoretically promising for advancing the cooperation principles of SDG 17, particularly Target 17.17, which calls for fostering and promoting effective partnerships between the public, private, and civil society by leveraging each actor’s experience and resources.

However, there is still a long way to go when it comes to water financing. Currently, nearly 91% of annual water expenditures come from the public sector—including governments and state-owned enterprises—while less than 2% come from the private sector.

The fight against drought is especially urgent. Last October, the call for increased private sector participation was unanimous during the Drought Resilience +10 Conference, organized by the World Meteorological Organization (WMO) and the  FAO.

The private sector has largely recognized that developing sustainability in aid is also an economic investment. Beyond financial returns, the social impact of these investments fosters stability—a key factor for sustainable development and long-term global benefits.

We have identified the fundamental pillars that sustain these benefits based on our experience working on 109 projects across 40 of the world’s most vulnerable countries. Our collaboration with governments, UNICEF, and nine NGOs allows us to summarize them as follows:

• Ensuring access to water and sanitation drives economic development. These essential services create new markets and help curb the expansion of extremist movements—since lower poverty levels mean lower vulnerability to recruitment, particularly among young men. The result is greater social and political stability.
• Stability reduces forced migration, a phenomenon that perpetuates underdevelopment and creates demographic imbalances that also affect the world’s most prosperous countries.
• Access to water, sanitation, and hygiene improves public health, preventing epidemics and saving countless lives. This, in turn, reduces healthcare costs and associated economic risks.
• Schools with safe water and sanitation enhance education quality. This decreases dependency on state resources and increases opportunities to generate wealth, particularly for women.

Despite these arguments, we must be realistic and acknowledge that there are still insufficient incentives to trigger the so-called blended finance model—a mechanism that leverages public funds to attract private investment by reducing its risk exposure.

Investments in water and sanitation require long-term infrastructure, yet political instability and violence can render projects unfeasible or too high-risk. Recognizing and mitigating these risks is essential to attracting private capital. For that, it is crucial to remember that water unites more than it divides and to consider the following factors:

• Infrastructure tailored to local conditions and based on precise data. Each community has specific needs, making it essential to design facilities that align with geographic, demographic, and climatic characteristics. For example, a wastewater treatment plant must be adapted to soil type, water availability, and population density.
• Legal security and anti-corruption measures. Private funds often avoid environments plagued by these issues. In many conflict-affected countries, a lack of transparency in aid management and weak institutions discourage private investment. To overcome this barrier, it is essential to strengthen governance, implement more effective regulations, and use existing resources strategically. Financial guarantees and political risk insurance can be crucial in this process.
• Professional, cost-effective solutions. Modular infrastructure and decentralized water and sanitation systems offer flexible and cost-efficient alternatives, allowing for greater adaptability to shifting conditions. The private sector has a significant role to play in the professionalization of the industry, contributing expertise, innovation, and the capacity to absorb risks.

These solutions are already delivering results. The 2024 Annual Report of the Global Water Security & Sanitation Partnership (GWSP) highlights significant global progress in water and sanitation management. Just last year, GWSP influenced over $9.3 billion in new World Bank loans, benefiting 70 countries.

A promising development is that 46 of these initiatives have been implemented in fragile and conflict-affected regions, such as Sudan, the Democratic Republic of the Congo, and the Sahel. This demonstrates that investment in water and sanitation can have an impact even in highly unstable contexts.

In wealthy nations governed by protectionist policies, it has become increasingly difficult to justify foreign aid spending to voters, especially amid budget cuts and challenges in funding public services. It is imperative to emphasize that foreign aid is not charity but an essential foreign policy tool rooted in ethics.

Amid uncertainty about the future of international cooperation, the message is clear: investing in the world’s most vulnerable regions benefits everyone. The high cost of inaction is undeniable when it comes to access to water and sanitation. Multilateralism remains the best path toward achieving global benefits.