Major Trouble For Pakistan, Bangladesh; US President Donald Trump Freezes Funding

By
Asian Observer
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Newly elected US President Donald Trump has made several bold decisions since taking office, one of which has significantly impacted India’s neighboring countries—Pakistan, Bangladesh, and Nepal. Under the “America First” agenda, the US State Department announced a suspension of all foreign aid. According to officials, future funding will only be decided after a thorough review, leading to an immediate halt to various assistance programs worldwide.

On January 20, Trump signed an executive order temporarily freezing all foreign development funds for 90 days. The US State Department later confirmed that almost all new funding for foreign aid programs had been suspended.

The decision has hit Pakistan hard, as the country relies heavily on US aid for several development projects. Many of these projects, including five key energy initiatives and multiple agricultural and economic development programs, have now been put on hold. Funding for democracy, human rights, education, and healthcare programs has also been temporarily suspended, affecting 11 governance-related projects.

For the past two decades, the US has provided Pakistan with $32 billion in financial aid. However, with Pakistan already struggling with inflation, unemployment, and an IMF bailout, the suspension of US funding adds to its economic woes.

Bangladesh’s Crisis Deepens

Trump’s decision also poses a significant challenge for Bangladesh, where Nobel laureate Muhammad Yunus leads an interim government after the resignation of Sheikh Hasina following last year’s student protests. The country, already struggling with food security and economic instability, heavily relies on US aid for essential services like education and healthcare.

Analysts warn that the sudden halt in American assistance could worsen Bangladesh’s economic crisis and disrupt efforts to stabilize the nation. Key programs in healthcare and education, funded by the US, now face uncertainty.

Impact on Foreign Aid

The US is the largest donor of foreign aid globally, disbursing $72 billion in 2023 alone. This included $401 million for Bangladesh and $232 million for Pakistan through USAID. With Trump’s order in place, these funds remain frozen, affecting numerous projects in both countries.

While American officials insist that the aid suspension is temporary, the decision has already sent shockwaves through Pakistan and Bangladesh, deepening their economic and political instability.

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