Presented by The Rockefeller Foundation.
As the U.S. International Development Finance Corporation (DFC) significantly expands its capabilities under the Trump administration, a key question emerges: will its mandate shift from development to prioritizing more lucrative "America First" investments? Conor Coleman, DFC’s head of investments, asserts that the agency is equipped to achieve both objectives, and do so more effectively than ever before.
This edition also explores development leaders' expectations from the Munich Security Conference, and examines the Peace Corps' adept navigation of the Trump era.
DFC's Strategic Evolution and Expanded Mandate
The DFC is undergoing a substantial transformation, boasting a significantly larger financial capacity. Its investment portfolio has surged from a $60 billion cap to an impressive over $200 billion. According to Conor Coleman, this expanded war chest will be deployed with enhanced precision and speed, signaling a departure from past practices.
Coleman conveyed to my colleague Adva Saldinger that the DFC is adopting a "much more strategic" investment approach. Rather than merely deploying capital to hit volume targets, the agency aims to align its investments with the president's foreign policy objectives, foster economic growth in host nations, and ensure a return for U.S. taxpayers.
Reinforcing the emphasis on President Donald Trump's foreign policy, the DFC is expanding its Office of Foreign Policy. Coleman explains this office will serve as "the umbrella that drives our dual mandate investment thesis of development investment and strategic investment." This new strategy implies fewer, but larger, transactions, with examples like $500 million allocated for infrastructure projects, as reported by Adva. While sectors such as agriculture and healthcare will continue to receive funding, these are expected to be "package investments," complementing larger initiatives to cultivate comprehensive economic ecosystems in emerging markets. The DFC also gains the ability to invest in wealthier nations, facilitating connections between the developing and high-income worlds.
Furthermore, the DFC is ambitious in mobilizing private sector capital, targeting two to four times more private sector dollars than its own investment in each transaction. This will involve assuming greater risk and exploring innovative financial instruments, including securitization, a tool Coleman notes the agency has not fully utilized previously.
Development as a Cornerstone of Global Security
The recent Munich Security Conference provided a platform for robust discussions on geopolitics, yet the equally critical role of development in global security was a prominent underlying theme. Armine Afeyan, CEO of the Aurora Humanitarian Initiative, noted that while a gap between national security and development might seem apparent, her observations at the conference suggested it was less pronounced than anticipated. She remarked, "It’s not an either-or. … There’s an understanding that humanitarianism is increasingly part of the security apparatus."
In a separate interview, former Department of Defense official Celeste Wallander underscored development's integral role, describing it as one of three pillars supporting American national security. She warned that the degradation of USAID leaves "a big missing piece in American foreign policy." Echoing this sentiment, Nathalie Delapalme, CEO of the Mo Ibrahim Foundation, and Udo Jude Ilo, CEO of HiiL, highlighted in an opinion piece for Devex that while military deterrence and great-power competition dominate Munich, for millions, "insecurity is not experienced as geopolitics. It is experienced as injustice." They contend that instability often arises from "unresolved justice needs," where peaceful conflict resolution mechanisms are absent.
Former U.N. Secretary-General Ban Ki-moon and Ismahane Elouafi, head of CGIAR, further stressed that food insecurity is another critical driver of instability. They criticize the underfunding of agricultural research, a powerful tool for peace, despite increased defense spending. They argue that investing in agricultural research and development is not merely aid, but a crucial investment in "lasting peace, stability, and prosperity."
Global Development Insights: Climate, Peace, and AI
This year's development calendar is bustling, with events like the inaugural three-day Mumbai Climate Week. Modeled after established events in New York and London, this conference aims to bring critical climate discussions to one of the world's most climate-vulnerable regions. Focusing on food systems, energy transition, and urban resilience, Mumbai's iteration uniquely amplifies voices from the Global South, offering deeper, more geographically diverse conversations. Shishir Joshi, whose nonprofit Project Mumbai co-organizes the event, emphasized efforts "to ensure that citizens feel they do have a voice, and a voice which can be heard."
The Peace Corps, another prominent U.S. development arm, successfully navigated the Trump administration, unlike USAID which faced severe cuts. My colleague Michael Igoe explored how the Peace Corps survived relatively intact, partly by embracing efficiency initiatives to avoid direct confrontation. Despite some staffing reductions, the agency has maintained stable, experienced leadership. However, the COVID-19 pandemic significantly impacted recruitment, forcing a historic evacuation of volunteers globally. Critics also point to an "onerous, outdated medical clearance process" and a "risk-averse culture" limiting its reach. Nevertheless, the Trump administration has set an ambitious goal for the agency: to more than double its volunteer numbers to 8,000 by 2030. Paul Shea, then-acting CEO, stated this goal is both challenging and achievable for an agency that "rises to the challenge."
Finally, the demand for artificial intelligence (AI) skills in global development is rapidly increasing. As Emma Smith notes, employers are leveraging AI for efficiency due to limited resources. Despite this, AI expertise remains scarce, as identified by a global survey co-led by the Humanitarian Leadership Academy (HLA). Ka Man Parkinson of HLA sees this as a significant advantage for job seekers proficient in AI. Humanitarian data scientist Rebeca Moreno Jiménez offers a stark warning: "AI will not take their jobs — but someone who knows how to use these technologies will."
In related news, approximately $15 million from USAID's remaining operating funds has been reallocated to cover the security detail of Trump's budget chief, Russell Vought. Additionally, President Trump announced that his newly formed Board of Peace has pledged $5 billion for Gaza's reconstruction and stabilization forces. The U.N. also expressed concern over escalating attacks on independent experts, specifically after several European governments criticized U.N. special rapporteur for the Palestinian territories, Francesca Albanese, over alleged remarks on Israel and called for her resignation.
