APRIL 2026 Why international organizations arerethinking where they operate, and AUTHORS MICHAEL CARACACHESenior Partner FERAS FUAD ABULPartner STEFAN HAIDPartner International organizations (IOs) are navigating a new operatingreality marked by tighter donor budgets, increased politicalscrutiny and less predictable multilateral funding. These pressures CHARIF MHIRECHSenior Project Manager In this shifting landscape, the Gulf Cooperation Council (GCC)countries are emerging as strategically significant platforms formultilateral engagement. The current geopolitical turbulence in theregion only reinforces this relevance as it underscores the growing From expansion to funding constraints: the new reality of For the past 25 years, international cooperation expanded steadily with IOmandates broadening and delivery capacity scaling up, in response to successive Development budgets in advanced economies are under pressure, and majordonors are reassessing their multilateral commitments. Recent US withdrawals from 1A US Presidential Memorandum wasissued on January 7, 2026, by the WhiteHouse, following the Executive Order ofFebruary 4, 2025, and specifies the listof IOs, conventions and treaties fromwhich the United States is withdrawing. These changes are already impacting IO operations. Several organizations havealready announced restructuring measures, hiring freezes or program reductions.The launch of the UN80 reform initiative – which aims to streamline the UN system– reflects this new reality of tighter resource envelopes and heightened UN funding started to drop in 2023, with voluntary andearmarked funding now accounting for ~72 % of total UN system funding mix, 2010–24 – nominal value adjusted for inflation [USD bn] This marks a structural transition: IOs must now make tougher trade-offs and rethinknot only their activities, but also their operating models and physical footprints. Why IO funding models amplify shocks To understand why funding constraints have such far-reaching consequences, it isessential to look at how IOs are financed. Using the UN system as a reference case, Mandatory payments by member states, calculated according to economiccapacity, providing the most predictable funding stream and primarily finance Un-earmarked funds from donors that offer flexibility to allocate resources acrossmandates and priorities but represent a shrinking share of total funding as donors Earmarked contributions Donor-specified funds tied to projects or regions, now dominating the fundinglandscape. While earmarking has enabled rapid scaling in priority areas, it Other revenues Services, investment returns and cost recovery which play a marginal role and offer The UN system's dependence on voluntary and earmarked contribution – over 70 %of total UN funding in 2023–2024 – means that donor tightening has outsized impact, A key vulnerability for major IOs is donor concentration, where a small group ofcontributors (notably the United States, Germany, France and the United Kingdom) A handful of donor countries fund most of some IOs, makingthem highly exposed to sudden political funding shocks Share of donor funding in selected IOs [%] Footprint is becoming a strategic choice, not just a legacy As funding becomes tighter and more volatile, IOs are re-evaluating theirgeographic footprint. Historically, IO headquarters clustered in cities such asGeneva, New York, Paris, Vienna and London. These hubs offered strong ecosystems Strategic and geopolitical factors are increasingly influencing location decisions.Many location choices also reflect political and strategic factors, includinginstitutional prestige, access to decision-makers and proximity to operationalpriorities. Being closer to crisis regions and key partners is increasingly important for Footprint strategy therefore now involves balancing operating costs, access to Against this backdrop, the GCC is emerging as one of the most strategically relevantregions in the evolving geography of multilateralism. This is not about replacingtraditional hubs, nor about positioning as a low-cost substitute for Geneva or New A strategic bridge between headquarters and program theaters: Geographically,the GCC sits at the crossroads of several of the world's most active development Global connectivity and convening power: The region has also become one ofthe world's most connected aviation and logistics platforms. Dubai, Riyadh and Access to capital and development finance ecosystems Financially, the region offers growing access to capital pools and cooperationpartners. Institutions such as the Islamic Development Bank, sovereign funds and Capitalizing on their structural advantages, GCC countries havebegun strengthening their role in global multilateral leadership Accelerating efforts to relocate oropen offices and programs of IOsamid declining commitment and Encouraging appointment of seniorcadres in IO leadership positions toboost country's g