Between 2019 and 2022, Saudi Arabia, the United Arab Emirates, Kuwait, and Qatar spent $28.9 billion on overseas development assistance, establishing themselves as major global donors alongside Western nations. But ongoing conflict in the region is now forcing these Gulf Cooperation Council states to weigh defense spending against foreign aid budgets, according to a new report from the Hoover Institution published in 2026. The analysis, authored by Robert Mason and Rikard Jalkebro of the Anwar Gargash Diplomatic Academy, warns that mounting pressure from missile and drone attacks, coupled with economic uncertainty, is squeezing the same aid programs that have long functioned as tools of regional influence and stability.
The financial shift is already visible in the donor landscape. The report notes that the UAE reported a 55.5 percent increase in overseas development assistance for 2025, driven largely by bilateral humanitarian aid to the West Bank and Gaza Strip, while Qatar saw a 23.4 percent rise. Meanwhile, Western donors are pulling back: preliminary OECD data for 2025 show Germany cut aid by 17.4 percent, France by 10.9 percent, and the United Kingdom by 10.8 percent. In February 2025, the UK announced it would reduce aid from 0.5 to 0.3 percent of gross national income by 2027 to fund defense spending of 2.6 percent of GDP, a transfer expected to release £6.5 billion for defense in 2027-28 alone. Official development assistance from OECD DAC member countries fell 6 percent in real terms in 2024, and preliminary 2025 data show a further contraction of roughly 23 percent, with humanitarian aid down almost 36 percent. The Gulf states have been moving in the opposite direction, but the authors caution that fiscal pressure from defense costs could reverse that trend.
The operational infrastructure behind Gulf aid is substantial. Dubai Humanitarian, the world's largest humanitarian aid hub, moved $110 million of aid to 101 countries in 2025, and held stock valued at $208.1 million in the first half of the year alone. The UN Humanitarian Response Depot network reports that roughly 60 percent of the humanitarian aid it dispatches globally now moves through Dubai. The World Health Organization drew $25 million of medical supplies from the Dubai hub in 2025, with 41 percent going to Sudan and 35 percent to Gaza. The authors argue that this logistics capacity represents more than generosity—it's a strategic asset that converts wealth into regional presence and influence. The report warns that "cutting humanitarian budgets does not simply mean giving less money. It can weaken the machinery that makes Arab Gulf aid effective: logistics hubs, pre-positioned supplies, trained staff, field relationships, and partnerships with UN agencies and NGOs."
The shift reflects a fundamental change in how Gulf states define security, moving from deterring attacks to maintaining functionality when strikes occur. The cost of intercepting a single incoming missile through systems like Patriot or THAAD can run into millions of dollars, while the projectiles they intercept often cost a fraction of that amount. This asymmetry is driving procurement priorities toward interceptor stockpiles, integrated air and missile defense, and domestic production capacity rather than simple hardware purchases. The authors explain that Gulf states have historically exercised power not through large militaries but by turning hydrocarbon wealth into global influence through trade, finance, infrastructure, and aid—what they call economic statecraft. The current environment threatens that model. If Gulf states cut aid capacity to pay for missiles, the report argues, they're not trading a luxury for a necessity but weakening one instrument of influence to strengthen another, precisely in the crises where their reach is hardest to replace.
For Washington, the implications are concrete. Gulf state aid has often complemented or substituted for Western stabilization efforts in fragile states like Yemen, Sudan, Afghanistan, and Pakistan. A sustained reduction would create funding gaps that neither the United States nor European donors currently appear willing or able to fill, the report finds. The authors recommend that Gulf states protect their operational core—the logistics networks, multilateral contributions, and field presence that make their aid effective—while rationalizing high-profile pledges that serve diplomatic signaling more than operational impact. They warn against blunt contraction driven by short-term economic concerns, arguing instead for disciplined selectivity that preserves capacity. The two approaches "look alike on a spreadsheet in the year they are decided," the report states, but "look nothing alike five years later, when the Gulf either still has an instrument of influence in Yemen, Sudan, and the Sahel or is trying to rebuild one from scratch."