Caught between weak employment opportunities and widespread informal employment, Egypt’s manufacturing sector faces a dual challenge. Existing incentives in the labour market encourage both firms and workers to engage in informal employment arrangements. Firms benefit from lower labour costs and greater flexibility, while workers often seek higher take-home pay, driven by limited confidence in the benefits associated with formal employment. Many workers perceive tax and social insurance deductions as offering few tangible benefits or effective safety nets that would compensate for the reduction in current income. At the same time, policies aimed at promoting formal job creation that rely exclusively on stricter enforcement may backfire by increasing hiring costs, thereby creating an additional obstacle for job creation as well as for policymakers.
Caught between weak employment opportunities and widespread informal employment, Egypt’s manufacturing sector faces a dual challenge. Existing incentives in the labour market encourage both firms and workers to engage in informal employment arrangements. Firms benefit from lower labour costs and greater flexibility, while workers often seek higher take-home pay, driven by limited confidence in the benefits associated with formal employment. Many workers perceive tax and social insurance deductions as offering few tangible benefits or effective safety nets that would compensate for the reduction in current income. At the same time, policies aimed at promoting formal job creation that rely exclusively on stricter enforcement may backfire by increasing hiring costs, thereby creating an additional obstacle for job creation as well as for policymakers.
Over the last two decades, the People’s Republic of China has been central to significant shifts in the geography of international cooperation. With fundamental shifts in the United States’ posture towards international partnerships under the second Trump administration, China’s relevance has grown further, albeit on its own terms. In what follows, we discuss how recent international disruptions have affected China, how China-led cooperation has been evolving over the last decade and what more China-centred forms of cooperation mean for the future of bilateral and multilateral partnerships.
The year 1961 can be seen as the “Big Bang” of international development policy. First, in that year, the Development Assistance Committee (DAC) of the OECD was established. In the context of the Cold War, the United States pushed for an international system to support developing countries. In 1961, US President John F. Kennedy consolidated existing efforts to assist developing nations into USAID. Last but not least, in the same year, Germany’s Federal Ministry for Economic Cooperation and Development (BMZ) was established in what was then West Germany as a dedicated ministry to support developing regions (Bracho, Carey, Hynes, Klingebiel, & Trzeciak-Duval, 2021). The DAC has long been both a symbol of, and a “norm entrepreneur” in, development cooperation (Esteves & Klingebiel, 2021; Janus, 2022; Sumner & Klingebiel, 2025). It is often seen as synonymous with the form of development cooperation practised by “traditional donors”, that is, a club of high-income countries. Linked to this has been the criticism that the governance of ODA reflects persistent global power inequalities. At the same time, the DAC has served as the central forum in which key norms and quality standards of development cooperation have been negotiated over more than 60 years. It was within the DAC that the concept of “official development assistance” (ODA) was developed. ODA refers to public resources provided on concessional terms to promote economic and social development in developing countries. DAC members are also regularly assessed through peer review processes that assess their adherence to agreed standards (Ashoff, 2013). Like the role of the Programme for International Student Assessment (PISA) in education policy, these reviews in theory serve both disciplinary and supportive functions. In practice, no DAC member country has wished to be publicly criticised for failing to comply with jointly adopted DAC standards and relevant international agreements. Last but not least, the DAC members also issue statements of good practice and position papers on the international development agenda. These documents have been influential and have, for instance, influenced the 2000 UN Millennium Declaration and the eight Millennium Development Goals adopted – which in turn evolved into the current 2030 Agenda and its Sustainable Development Goals (SDGs). DAC membership has expanded considerably since its creation, growing to 33 members today. Several nations once classified as developing countries, such as Spain, South Korea and a number of states that joined the EU in and after 2004, later sought and obtained DAC membership. At the same time, a growing number of OECD members, including Turkey, Mexico and Chile, have decided not to join the DAC. This reflects differing approaches to development cooperation and varying degrees of commitment to ODA-based norms. Countries that do not see themselves as part of a collective commitment around the ODA target of 0.7 per cent – such as Mexico, which historically identified with the Global South and was a founding member of the G77 before joining the OECD in 1994 – have so far remained outside the committee. Despite these variations, the United States played a decisive role in establishing the DAC as a rule-setting and coordinating body. US influence extended beyond institutional design. For decades, the United States also dominated personnel decisions and held the DAC chair until a rotating system was introduced (Bracho et al., 2021).
The rules-based trading system has been a central pillar of the post–Cold War international order. Predictable economic relations and lower trade barriers supported an unprecedented expansion of global trade and economic integration. Institutions such as the WTO helped establish a framework of shared principles designed to prevent protectionism and resolve disputes peacefully. This system contributed significantly to economic growth and poverty reduction, particularly in emerging and developing economies (e.g. Baldwin, 2016). However, the system has also faced mounting difficulties over time, with its gradual erosion becoming increasingly evident in the collapse of the Doha Development Round after 2008 and the paralysis of the WTO Appellate Body from 2019 onwards. More recently, unilateral trade measures, successive waves of US tariffs, rising geopolitical competition and the resurgence of industrial policy have not only undermined the multilateral trading system but also generated substantial disruptions and uncertainties in both trade and investment relations. Developing countries are among the most affected by these developments, not least because contemporary global trade involves more than just the exchange of final goods. Around 80 per cent of world trade now takes place within global value chains (GVCs) linked to transnational corporations, with production stages fragmented across multiple countries (UNCTAD, 2013). In these chains, developing countries typically occupy upstream positions and specialise in supplying raw materials or labour-intensive inputs, whereas more technologically complex and higher value-added activities are concentrated elsewhere. Especially economies in Latin America and the Caribbean as well as in Africa remain locked into low-complexity, low-margin tasks, whereas foreign-controlled firms dominate higher-value segments (ADB et al., 2025). This structural position renders developing countries particularly vulnerable to substitution and constrains economic diversification and development (e.g. Barrot, Calderón, & Servén, 2018). Against this background, trade-related development cooperation plays a crucial role. At the multilateral level, it does so by helping to sustain a fair and inclusive rules-based trading system. At the regional and country levels, it does so by strengthening institutions and investing in infrastructure as well as productive and trade capacities. These efforts also enhance developing countries’ attractiveness as investment destinations and trading partners within GVCs, helping them integrate more effectively into global markets and supporting a more resilient development pathway in an increasingly fragmented global order. This contribution begins by examining the implications of a fragmenting global order for trade. It then highlights why development cooperation in the field of trade remains vital before concluding with an exploration of how development cooperation can help build a more equitable and sustainable international trading system.
In the context of the changing global order and rising nationalism, several countries, including the United States and some European countries, have cut their official development assistance (ODA). The OECD forecasts a decline of ODA by around 23 per cent between 2024 and 2025 (OECD, 2026). At the same time there is a significant financing gap for achieving the Sustainable Development Goals (SDGs), currently estimated at about $4 trillion. Furthermore, the annual financing required to achieve the SDGs by 2030 increased by 36 per cent between 2015 and 2022, rising from $6.81 trillion to $9.24 trillion. This increase was driven by climate-related challenges, the impact of the pandemic, supply chain disruptions, and rising food and energy prices. These two trends have led to a significant SDG financing gap, which is projected to reach $6.4 trillion by 2030, assuming that it continues to grow at the rate observed between 2015 and 2022. Furthermore, mounting debt obligations are exerting pressure on pivotal investments in health, education and climate resilience (OECD, 2025). According to the debt sustainability analysis of the International Monetary Fund (IMF) and World Bank, about half of low-income countries are either at high risk of debt distress or already in debt distress.