The United States Agency for International Development (USAID) has paused new funding for programs in Pakistan following an executive order by former President Donald Trump on January 20. This order, titled “Re-evaluating and Realigning United States Foreign Aid,” halted all foreign aid for a 90-day reassessment period, except for emergency food assistance and military aid to Israel and Egypt.
I received an email response from the US Embassy in Islamabad confirming that all media queries regarding this order should be directed to the White House. However, sources familiar with the situation informed that it was too early to assess the full impact of this decision on Pakistan. A memo issued by then-Secretary of State Marco Rubio outlined that during this period, no new funds would be released, and existing agreements would not be extended unless explicitly reviewed and approved under new guidelines.
According to the US government’s ForeignAssistance.gov portal, actual disbursements for Pakistan declined from $169.8 million in 2023 to $116.5 million in 2024. The primary sectors for US assistance in 2024 included basic health ($21.53 million), disaster prevention and preparedness ($14.01 million), business and other services ($13.34 million), energy ($12.04 million), conflict, peace and security ($11.7 million), government and civil society ($6.6 million), agriculture ($4.82 million), emergency response ($3.3 million), and other multi-sector programs ($5 million). Operating expenses accounted for $15.6 million.
Historically, US aid to Pakistan has fluctuated depending on geopolitical circumstances. In January 2018, President Trump criticized Pakistan for allegedly providing safe havens to terrorists and announced a halt to military aid, arguing that the US had “foolishly” given Pakistan over $33 billion in aid over the past 15 years while receiving little in return.
The aid provided by the US has primarily been channeled through various international organizations and NGOs, including the World Food Programme, UNICEF, WHO, and USAID-affiliated agencies. Over the past two decades, the US has reportedly provided Pakistan with approximately $32 billion in direct assistance.
Aid levels saw a rise between 2001 and 2010, peaking during the US-led war in Afghanistan when Pakistan played a key role as an ally. However, from 2013 onwards, aid began to decline, with major cuts following the US withdrawal from Afghanistan in 2021. The latest suspension of funding further reduces US economic involvement in Pakistan.
Former Pakistani ambassador to the US, Maleeha Lodhi, has argued that this aid had already become negligible, with most funds being funneled through international organizations rather than directly benefiting the Pakistani government or public.
While the direct financial impact of this suspension may not be severe, it could have broader diplomatic and geopolitical consequences. Development sector experts, such as Haris Khalique, argue that the US foreign aid policy has always been guided by its strategic interests rather than humanitarian concerns. While the halt in funding will not significantly impact Pakistan’s economy, it may harm the credibility of US global leadership and aid commitments. He further noted that US aid has historically increased during periods of military rule in Pakistan, reflecting America’s prioritization of security cooperation over democratic governance.
The impact on ongoing development programs, particularly those related to health, education, and disaster relief, remains uncertain. Many of these projects were already facing financial constraints, and a prolonged suspension could disrupt their operations. Additionally, aid cuts could influence Pakistan’s foreign policy realignments, potentially pushing the country to strengthen economic and diplomatic ties with alternative partners, such as China and Gulf states.
While the immediate effects of this suspension may not be dramatic, the long-term implications of reduced US engagement in Pakistan could reshape regional alliances and economic strategies. Whether this policy shift leads to greater self-reliance or further financial challenges for Pakistan remains to be seen.
