Since the United States withdrew its support for the international humanitarian community in early 2025, it has cut US$709 million in life-saving grants. The United Kingdom, Germany and the European Union have followed, slashing over 30 percent of their aid budgets and channelling part of those funds to re-armament. Unfortunately, the US’ spectacular success in fighting disease in low- and middle-income countries in the last 30 years is now reversed. 

In this “new normal”, we’ve seen the collapse of global response capacities and the disruption of the UN cluster’s efforts to coordinate with NGOs on the ground – at a hefty cost. By June 2025, the funding cuts to USAID health programmes had led to the deaths of nearly 270,000 adults and over 560,000 children, at a rate of 88 deaths per hour.  The funding cuts could result in more than 14 million additional deaths by 2030, according to a Lancet study. In the words of Esther Duflo and Abhijit Banerjee, both Nobel-prize-winning economists and poverty researchers: “For many throughout the world, this is a bloody time”.

Unintended consequences

The mortality figures are appalling, but the indirect consequences also deserve our attention. We are seeing the emergence of unintended risks to our social and economic systems: the loss of efficiency, reliable information and influence. 

On the ground, the nearly 42-percent cut in funding has led to layoffs of 12,000 humanitarian workers and closure of at least 22 humanitarian organisations, representing a critical loss of talent and institutional memory. Take the US’ construction of a floating pier for the delivery of 2 million meals to Gaza per day. Its almost immediate shutdown (attributed to insufficient training, planning and equipment failures) was followed by slow and non-transparent food distribution by military contractors on the ground. 

This shows that defence and foreign policy bureaucracies face a steep learning curve in responding quickly to emergencies. When the lines between humanitarian and military activities are blurred, it quickly becomes apparent that military capacity is not inherently designed, or equipped, to save lives.  

In addition, access to reliable information is compromised due to the politicisation of humanitarian work fuelling misinformation. Since state-led initiatives are not subject to the same rigorous audits and restrictions as international humanitarian organisations, the result is less transparency and accountability, such as the impact of the US$230 million of taxpayers’ money spent on the failed pier project. 

In the current geopolitical context, the unintended consequences of the new normal – the erosion of neutrality, impartiality and independence – directly impact the integrity of our modern society.  Global citizens cannot stand by as hard-won humanitarian gains and institutions are discarded.

We’re all connected

Business is intricately linked to economic development. With globalisation, the integration of global supply chains has boosted economic growth, enabling each country to invest in its strengths and source the rest from the world. More importantly, in the last 30 years, it has lifted over a billion people out of poverty. 

Then there is the interconnectedness between aid providers and the local businesses and economy. For decades, international businesses have benefited from the spillover effects of USAID’s engagement in less developed countries. When local suppliers are contracted by humanitarian aid projects, it gives them the opportunity to expand their business and this in turn drives local economic growth. The entry of aid providers can trigger the development of institutional capacity, which in turn, enables international firms to operate in these emerging markets.

Recent large-scale global crises such as the Covid-19 pandemic have made us acutely aware of our interconnectedness. They taught us that no one is safe until everyone is safe, and that trade has helped solve shortages as they occurred around the world. Even rich countries may one day need the kind of emergency relief that depends on the kindness of strangers. The question is how to benefit from the linkages while mitigating the risks. 

The difference that business makes

Could humanitarianism, which directly contributes to an equitable, peaceful and rule-based system, be defined as a public good, like the environment? As global citizens, we should preserve it. And business leaders are uniquely qualified to do so by translating good intentions into plans with realistic resource allocations and measurable results. 

Targeted social projects by businesses, such as Walmart’s support for hurricane response in the US, are not new. Global logistics companies have joined the Logistics Emergency Team network to offer transport capacity for emergency operations. Companies like Takeda Pharmaceutical Group have co-funded public health supply chain capacity-building with governments in Africa. 

These companies are not only contributing resources to emergency operations; they are helping to develop capacities. In less developed countries, as they build infrastructure and trade with local firms, they are in fact promoting supplier development. And as these markets develop, their increased economic participation and growth combine to create a virtuous cycle, increasing access to goods and services, and ultimately benefiting the local communities and businesses. 

Business can also use its know-how (and know-who), to work with governments and key stakeholders to design more resilient systems that are not dependent upon single donors. For example, in response to drastic funding cuts, a public-private supply chain leadership group convened by the European Civil Protection and Humanitarian Aid Operations  has identified over 100 measures to improve aid distribution. But dedicated expertise is needed for public-private partnerships to succeed. In particular, governments will need to deepen their managerial capacity, make better stockpiling decisions and enable cross-border pooling of essential medicines ahead of the next global pandemic. 

Agents of change

Adam Smith is known for writing the classic “The Wealth of Nations”, but he also stressed the importance of empathy, fairness and community, because efficiency without virtue undermines the economic system. Our research in humanitarian operations reveals that virtue without efficiency is equally unacceptable. 

As the business school for the world, INSEAD has a role in informing policymakers, business and the public, empowering them to make the needed change to make humanitarian systems more resilient. For decades, our Humanitarian Research Group has worked on improving structures and processes in both commercial and humanitarian organisations to improve performance. 

Beside strengthening collaboration between organisations extending aid, our knowledge, built on decades of rigorous scientific studies, is translated into action by partners such as the International Federation of Red Cross and Red Crescent Societies. Practical contributions include analysing how much stock to pre-position in crisis-prone regions, devising more efficient use of humanitarian transport fleets, and updating asset replacement rules to reduce costs and carbon footprint in humanitarian operations. 

Our body of knowledge is fodder for new business models. Business can be a force for good if they adapt commercial practices of supplying food, shelter or medical care to meet the needs of crisis-prone regions. But it’s not just about ideals. The current geopolitical situation and ongoing war in the Middle East drives home the message: The destabilising effects of disease, starvation and political upheaval – on economies, communities and individuals – are real.