Development financing is an investment in collective security

March 26, 2026

Last month I was in Europe, listening closely to partners reflect on a world that feels increasingly fragile. In Germany, I shared my reflections on why development must sit at the heart of security debates and investments. As military escalation unfolds across the Middle East, that argument feels more relevant than ever. 

Longstanding assumptions about global order, economic integration, and international cooperation are being rewritten at speed. Security and sovereignty now dominate foreign policy debates, shaping budgets, alliances and national priorities - from Germany and Europe to Asia and the Pacific, and beyond. 

From Davos to Munich, one message is clear: development belongs at the center of security policy and strategy. Development financing and cooperation risk being misunderstood as “soft power,” disconnected from security policy. That would be a strategic error. Designed and targeted smartly, development investments can serve as bulwarks of national and regional security in the mutual interest of Europe and its allies. 

Europe and the Asia Pacific region exemplify this mutuality. In both contexts, countries that have remained stable and continue to prosper have done so based on open trade, political partnerships anchored in long-term shared benefits, commitment to global public goods, and respect for international law and multilateral systems. In a fragmented yet interdependent world, isolation and insularity are high-risk strategies. Investing in development that focuses on growing stability and prosperity is sound geopolitical and economic strategy. 

Development as stabilization 

Security-related crises are symptoms. Reducing these pressures at their source helps mitigate and contain them. Consider this global evidence: One in four people live in fragile contexts, including three-quarters of the world’s extreme poor. By 2040, according to the OECD, up to 90% of the world’s extreme poor could be living in fragile and conflictaffected settings; 40% of conflicts relapse within a decade, largely where development and inequality gaps persist; Violence and conflict drain $13–17 trillion from the global economy annually; and national GDP per capita is slashed by 15% within five years of severe conflict. 

Development as risk reduction 

Modern security threats are rarely confined to battlefields. The new front lines are everywhere. Climate shocks disrupt trade routes and supply chains. The absence of rule-of-law allows cybercrime, illicit financial flows and fraud to flourish. Poorly integrated economies become chokepoints rather than bridges. Opportunities and markets shrink.  

Through its partnership with UNDP across Asia and the Pacific, Germany has been investing precisely in the kinds of capacities that help reduce such systemic risks that drive inequality. Together, we have supported countries to strengthen public institutions, improve regulatory frameworks, help communities to adapt to the consequences of the climate crisis, and modernize digital and economic systems that underpin trade and economic activity.  

Development as security, now 

As in many parts of the world, military expenditure in Asia and the Pacific has more than tripled in real terms from 2000 to 2023. Conversely, the region is seeing a relative decline in human development investments. Map this with the evidence that countries with higher fragility scores tend to exhibit lower human development outcomes.  

Development and security interests are not trade-offs. Investments can and must have a dual purpose going forward, to serve development and security systems and solutions. When people feel safe, can see opportunity to improve their lot and that of their families, and have hope in their futures, peace and stability become precious global public goods that must not be traded away. 

 The deepening engagement between Europe and Asia Pacific underscores this point. As economic and geopolitical gravity continues to shift eastward, partnerships matter more than ever. Germany’s role in shaping this relationship is significant as it has demonstrated that security, development and human rights are mutually reinforcing, not competing or incompatible interests. Whether in Asia and the Pacific or in Europe, a world built solely on deterrence and fragmentation will be poorer, riskier and more unstable. Development is a strategic imperative to reduce security risk, build resilience, and expand opportunity for all. Think of it as the best form of collective risk management that works in everyone’s interest. 

 

This blog was originally published on Table.Media. Read the German version here