Aid & development, explained.
Flood waters inside a convenience store in Chiang Mai after Thailand's northern provinces were hit by torrential rain following Typhoon Yagi in the preceding weeks (AFP/Getty Images)
The 2025 Lowy Institute Southeast Asia Aid Map reveals relief spending has soared while prevention investment stagnates, forcing hard choices for development partners.
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Climate disasters drain Southeast Asia’s shrinking aid budgetsClimate disasters drain Southeast Asia’s shrinking aid budgets
Last September, Typhoon Yagi killed hundreds, injured thousands, and displaced even more across Vietnam, Myanmar, Laos, Thailand and the Philippines. The cost of damage ran into the billions – more than US$3 billion for Vietnam alone. Humanitarian assistance and disaster relief were sent from all over the world, from Australia, China, the United Kingdom, Europe, the United States, Russia, and other Southeast Asian nations.
It was an example of the type of help the region is expected to need ever more of in coming decades. The Lowy Institute’s 2025 Southeast Asia Aid Map, released this week, shows that assistance to Southeast Asia for extreme weather events and disasters hit a record high US$1.4 billion in 2023 (the latest full year of available data). It’s still a small proportion of overall humanitarian and development spending: just 5% of the total $29 billion provided in official development finance in 2023. But it’s growing rapidly, and that means that the region’s partners have tough choices ahead.
The number of people affected by extreme weather events in Southeast Asia grew again in 2024 and shows no sign of slowing down.
Southeast Asia’s energy demand is on track to double, surpassing Europe by 2050. The region’s clean energy shortfall will become the world’s problem.
The World Bank and Japan are the main providers of humanitarian assistance and disaster relief, known as HADR, together responsible for two-thirds of all disaster relief. France, the United States, the Asian Development Bank and Australia are also major contributors. France, Canada and Japan devote the highest proportion of their overall aid and development budgets to HADR. But we already know that France and the United States will restrict their foreign aid spending after announcing dramatic cuts in early 2025. Despite its relative weight as Southeast Asia’s third-largest development partner in 2023, China ranks 24th for disaster relief.
These providers also give differently. For grants, the United States is by far the most generous provider, while Japan dominates in concessional loans.
The primary mode of delivery, and the reason the World Bank ranks so highly in this sector, are what are called “CAT-DDO loans”, standing for Catastrophe Deferred Drawdown Option. These are liquidity tools for middle-income economies. The line of financing is pre-approved, once the recipient country has met certain requirements for disaster preparedness, and then can be accessed instantly after a disaster. For example, the World Bank has committed more than $1.5 billion to the Philippines across three different non-concessional CAT-DDO loans since 2015.
The trajectory is certain. HADR will consume greater proportions of shrinking foreign aid budgets – around the world, and especially in Southeast Asia. The Climate Risk Index ranks Myanmar and the Philippines among the top ten affected countries globally, and UNESCAP estimates that only 7.4% of financial needs for disaster adaptation are met in Southeast Asia.
All this is treating symptoms of a changing climate, not the cause. The Lowy Institute’s Southeast Asia Aid Map also finds that international support for Southeast Asia’s clean energy transition is sorely lacking, at just US$708 million in 2023 – only just more than half of what was spent on disaster relief. Southeast Asia is by no means responsible for the bulk of historical emissions, and the effects of climate change are of course global, meaning there is no link between the site of an extreme weather event and the location of the generated emissions. But Southeast Asia’s energy demand is on track to double, surpassing Europe by 2050. The region’s clean energy shortfall will become the world’s problem.
Broader climate development finance is also in trouble, with analysis revealing the $4 billion provided for climate-resilient and low-carbon infrastructure in 2023 is less than 3% of what the ADB estimates the region needs annually. 2023 also saw the lowest level on record of funding directed to projects that list climate action as their principal objective.
The choice is between short-term relief and long-term prevention. There is clearly a role and a need for both. As HADR absorbs greater amounts of foreign aid, Southeast Asian governments and their development partners must confront that choice with clarity. An option may be to ring-fence funding for adaptation, particularly in the most disaster-prone regions.
About the authors
Grace Stanhope
Grace Stanhope is a former Research Fellow in the Indo-Pacific Development Centre at the Lowy Institute, working on the Southeast Asia Aid Map. Her work focused on tracking and analysing foreign aid and development finance flows to Southeast Asia.
Alexandre Dayant
Alexandre Dayant is a senior economist and former Deputy Director of the Indo-Pacific Development Centre, a dedicated policy research centre within the Lowy Institute.
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