Home Money USAID Suspends Funding to Bangladesh Amid Trump’s Foreign Aid Freeze

USAID Suspends Funding to Bangladesh Amid Trump’s Foreign Aid Freeze

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The United States Agency for International Development (USAID) has announced the suspension of all financial assistance to Bangladesh following President Donald Trump’s executive order to halt foreign aid for 90 days. The directive, issued on January 20, mandates a comprehensive review of U.S. foreign assistance programs to ensure alignment with American interests and values. Only Israel and Egypt have been exempted from the aid freeze.

A memo from Secretary of State Marco Rubio highlighted that the review must be completed within 85 days, with recommendations provided to the President. The decision has already affected USAID’s programs in Bangladesh, which include initiatives in food security, healthcare, education, democracy, and environmental projects. USAID has instructed its implementing partners in Bangladesh to cease all activities until further notice.

“Partners must immediately stop any work under USAID contracts, grants, or agreements and take reasonable steps to minimise costs. Work will only resume upon written notification from contracting officers,” USAID stated.

Impact on Bangladesh’s Economy and Humanitarian Efforts

The suspension of aid poses significant challenges for Bangladesh, especially for the interim government led by Muhammad Yunus. USAID’s programs are the largest in Asia, playing a crucial role in addressing the Rohingya refugee crisis, stabilizing the textile industry, and supporting economic recovery amid a shrinking foreign exchange reserve.

The halt comes just months after the U.S. committed $202 million in aid to Bangladesh in 2024, part of a broader agreement pledging $954 million between 2021 and 2026. With $425 million already disbursed, the remaining funds are now uncertain.

Bangladesh’s reliance on international aid is evident, as the Yunus administration recently sought $5 billion in financial support from global lenders and a $4.7 billion bailout from the IMF. The suspension could further strain the country’s ability to manage economic challenges and humanitarian crises, leaving the government scrambling for alternative solutions.

Trump’s executive order emphasises that U.S. foreign aid must align with its foreign policy objectives, stating that current aid programs often destabilise global peace by promoting values contrary to American interests. As the review unfolds, the suspension may have far-reaching consequences for aid-dependent nations like Bangladesh.

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