The United States has suspended aid projects worth over $845 million in Pakistan following President Donald Trump’s directive to cut funding for the United States Agency for International Development (USAID) projects worldwide.
The abrupt suspension has halted crucial development initiatives and placed hundreds of Pakistani jobs at risk.
The US has immediately frozen 39 major USAID-funded projects in Pakistan across various sectors, including energy, economic development, agriculture, democracy, human rights and governance, education, health, and humanitarian assistance.
Many of these initiatives, fully or partially funded by USAID, have now come to a standstill, with local NGOs and organisations struggling to sustain operations due to the withdrawal of promised funds.
Among the most significant suspended projects is the Integrated Health Systems Strengthening and Service Delivery Integrated Health System Program, a $86 million initiative aimed at strengthening Pakistan’s healthcare infrastructure.
The Global Health Supply Chain Program, valued at $52 million, was designed to ensure the availability of essential medical supplies. In education, the Merit and Needs-Based Scholarship Program, worth $30.7 million, was set to support underprivileged students pursuing higher education.
Meanwhile, the Inclusive Democratic Processes and Governance, a $15 million initiative, was intended to enhance democratic governance and transparency.
The suspension has also impacted development efforts in the recently merged tribal areas. The Merged Areas Governance Program for former FATA, valued at $40.7 million, had been working to improve governance and administrative systems.
Additionally, the Building Peace in Pakistan programme, worth $9 million, aimed at fostering religious, ethnic, and political harmony, has been put on hold. The freeze has also halted the Pakistan Private Investment Initiative programme, worth $43.5 million, which was focused on generating employment opportunities.
One of the most critical projects affected is the Mangla Dam Rehabilitation Project, a $150 million initiative essential for Pakistan’s energy and water security.
The decision to suspend these aid programmes comes as part of a broader restructuring of US foreign assistance under Trump’s “America First” policy.
USAID, which was established in 1961 under President John F Kennedy, has long been a cornerstone of US foreign policy, administering approximately 60% of the country’s aid budget. In the 2023 fiscal year alone, USAID disbursed $43.79 billion in global assistance, supporting development efforts in over 130 countries.
However, Trump’s administration is now seeking to consolidate USAID into the State Department, a move aimed at reducing government expenditure and redirecting funds towards domestic priorities.
Trump has entrusted Elon Musk, the billionaire heading his drive to shrink the federal government, to oversee these federal agency reforms.
