USAID Freeze

Context:

On January 20, 2025, President Donald Trump, on his first day in office for a second time, issued an executive order freezing USAID foreign assistance for 90 days.

Key Highlights:

• About 10,000 employees of the United States Agency for International Development, excluding essential personnel, have been notified that they will be placed on administrative leave at the end of Friday as President Donald Trump moves to dismantle the foreign aid agency.
• A substantial amount of USAID content wiped from the website besides simply putting up a notice about the freeze.
• A temporary restraining order from a federal judge until February 14, but this does not apply to the funding freeze.

What is USAID?

• Established in 1961, USAID is independent agency handling all U.S. foreign aid and development programs.
• Works in more than 100 countries, focusing on:
  • Economic Development.
  • Health & Education.
  • Humanitarian Assistance.
  • Food Security.
  • Climate Change.
  • Democracy & Governance.
• Budget
  • $44.2 billion in 2024 (0.4% of the U.S. federal budget).
• Major programs
  • PEPFAR (AIDS relief)
  • Feed the Future (food security)
  • Power Africa (electricity access)
  • Water for the World Act (sanitation)

Elon Musk and Marco Rubio in the Mix

• Elon Musk, top boss of the Department of Government Efficiency (DOGE), said he would move to close down USAID because he considered it a “criminal organization“.
• Marco Rubio suggests restructuring and not a total shutdown, being actually Secretary of State and current acting administrator of USAID.

Impact of Freeze on the World

• First recipients of USAID
  • Ukraine, Ethiopia, Jordan, Somalia, Congo, Afghanistan, Nigeria, Syria, Yemen, South Sudan.
• Heavy consequences for humanitarian:
  • UN warned without funding from USAID for HIV/AIDS will be tagged topple lose 6+ million people to die within four years.
• Programs in Haiti
  • Suffered $13.3 million aid freeze, and at the same time, the Haitian police force was offered $40.7 million showing much of selective exclusion.
  • Only 294 of 10,000 USAID employees will stay behind causing massive impact on implementation of the many programs.

USAID in India

• US AID grants to India have plummeted in the recent years owing to the objections raised by the Government regarding the disbursement conditions.
• In the last decade, India has received funding from the US in the tune of $1.5 million, which is roughly about 0.2% 0.4% of the global budget by USAID.
• Major areas of support in India ($79.3 million in funding 2024)
  • Health programs (HIV/AIDS, TB, maternal and child health, child health, immunization).
  • Economic Development, energy, water supply, sanitation.
• Effects of freeze on India
  • Little impact as India has not remained dependent on USAID for much.
  • Most health care projects would face disruption, but then the Indian government might fill the gap.
  • USAID has ordered that all projects in India stop work right now.

Political and Global Reactions

• Detractors opine that such an effort will end up isolating the U.S. and abandoning vulnerable nations.
• Former USAID admin Andrew Natsios called it as “political revenge” targeting Biden era programs.
• Experts warn that such actions will impact the U.S. interests vis a vis the developing nations, ultimately leading to greater global instability.

Conclusion

• For the world: The USAID freeze potentially disrupts essential humanitarian projects, especially in Africa, the Middle East, and conflict zones.
• For India: It will not be significantly impacted, but it likely will require government intervention for ongoing health projects to continue.
• The follow up will depend on whether the freeze remains intact 90 days from now or on whether the freeze is transformed into a permanent restructuring of U.S. foreign aid.