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flag New Zealand’s 35% aid cut creates a $200M Pacific funding gap, shifting influence to Australia and China.

flag A 2025 Lowy Institute report projects a $200 million annual Pacific aid shortfall as New Zealand cuts its overseas aid by 35%, reducing its regional funding despite past contributions. flag Australia is filling much of the gap, now providing 43% of aid, with infrastructure projects replacing health and education funding. flag Crisis-era loans from Australia and Japan have ended, worsening fiscal strain. flag China is expanding influence through smaller, visible grants and community initiatives, boosting its popularity. flag U.S. aid is less affected due to protected compacts, but some programs face disruption. flag The shift threatens long-term development and increases pressure on Pacific nations amid slowing growth and rising debt.

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