ISLAMABAD: The United States has frozen aid projects worth over $845 million in Pakistan. This follows President Donald Trump’s order to slash funding for the United States Agency for International Development (USAID) initiatives globally.
The abrupt decision has disrupted vital development programs. Hundreds of jobs in Pakistan are now at risk. The suspension has halted 39 major USAID-funded projects covering multiple sectors. Key areas affected include energy, economic development, agriculture, governance, education, health, and humanitarian assistance. Many local organizations and NGOs reliant on these funds are now struggling to sustain their operations.
One of the most affected programs is the Integrated Health Systems Strengthening and Service Delivery Initiative. This $86 million project was aimed at improving Pakistan’s healthcare sector. Another key initiative, the Global Health Supply Chain Program, valued at $52 million, was designed to ensure an uninterrupted supply of essential medicines. The education sector has also suffered, with the Merit and Needs-Based Scholarship Program—worth $30.7 million—suspended, leaving underprivileged students without financial aid.
The governance sector is experiencing a major setback. The Inclusive Democratic Processes and Governance Program, a $15 million project, was intended to enhance transparency and strengthen democratic institutions. Similarly, the suspension of the Merged Areas Governance Program, valued at $40.7 million, has hampered administrative reforms in the former tribal regions.
Efforts to promote peace and social harmony have also been affected. The Building Peace in Pakistan Program, a $9 million initiative, aimed at fostering religious, ethnic, and political unity, is now on hold. Additionally, the Pakistan Private Investment Initiative, worth $43.5 million, was designed to generate employment but is now frozen.
A major blow has been dealt to Pakistan’s energy sector. The Mangla Dam Rehabilitation Project, a $150 million initiative crucial for water and power security, has been suspended. The freeze comes as part of Trump’s broader restructuring of US foreign aid under the “America First” policy.
Since its establishment in 1961 under President John F. Kennedy, USAID has played a significant role in US foreign policy. In 2023 alone, it disbursed $43.79 billion across 130 countries. However, the Trump administration is working to consolidate USAID into the State Department. This move aims to cut government spending and redirect funds toward domestic priorities.
Trump has tasked billionaire Elon Musk with leading efforts to shrink federal agencies. As part of these reforms, USAID’s role is being reduced, significantly impacting global aid programs, including those in Pakistan. The sudden withdrawal of funding has left development efforts across multiple sectors in limbo.
