Aid on ice

The new American president seems very keen on taking on the axe to the federal bureaucracy in Washington DC. Why does this matter for Pakistan? Well, because this is a very poor country, and, like most poor countries, Pakistan relies on rich countries and their money to meet critical needs like health, education and infrastructure and, in some cases, to simply keep the economy afloat. There is no country richer than the US, which means that fiscal and political moves taken in a different time zone have an outsized impact on what happens here. As a result, President Donald Trump’s directive to cut funding for the United States Agency for International Development (USAID) and its projects worldwide has led to the suspension of aid projects worth over $845 million in Pakistan. This is almost 10 times as much as what our federal government spends on healthcare. The abrupt suspension has reportedly halted crucial development initiatives and placed hundreds of Pakistani jobs at risk as 39 major USAID-funded projects across sectors including energy, economic development, agriculture, democracy, human rights and governance, education, health, and humanitarian assistance have been frozen.

Among the most significant suspended projects is the Integrated Health Systems Strengthening and Service Delivery Integrated Health System Program, a $86 million initiative aimed at strengthening Pakistan’s healthcare infrastructure. Another critical and now-suspended project is the Mangla Dam Rehabilitation Project, a $150 million initiative essential for Pakistan’s energy and water security. When it comes to education, the Merit and Needs-Based Scholarship Programme, set up to support underprivileged students pursuing higher education, is among the major programmes now frozen. The vast footprint and importance of the projects now in limbo underscores just how dependent Pakistan is on external assistance. In particular, it shows that despite the relative decline of Western nations relative to rising Asian economies like China, they still exercise considerable influence in countries like Pakistan, funding crucial projects beyond our means to sustain.

Trump’s ultimate aim is reportedly to consolidate USAID into the State Department, a move aimed at reducing government expenditure and redirecting funds towards domestic priorities. This is a task he has reportedly entrusted to his billionaire buddy Elon Musk. And when a country is aiming to cut expenses, foreigners in the far reaches of the world obviously fall low on the priority list. In simple terms, the US does not need Pakistan as much as Pakistan appears to need its money. At least, this is what the case would appear to be on the surface. A more nuanced view would be that all countries, rich or poor, benefit from less poverty and sickness and more development and cooperation. America-firsters might argue that this means the West footing the Global South’s bill but such a point is ignorant of history. Aside from the fact that the West and its companies would benefit disproportionately from more development and prosperity in the Global South, there is the point that the West would probably not be what it is today without the centuries of colonial rule. Those years saw the wealth of the world drain into the West and never make it back. Even today, the Global South suffers disproportionately from problems that have their origins in rich countries, such as climate change. The West thus has a moral obligation to prioritise aid and development in countries like Pakistan. But a moral logic will likely never appeal to Trump and Musk and their moves to cut aid is in line with the xenophobic and isolationist policy emerging throughout the West. Even if the USAID funding is unfrozen at some point, that things have gotten to this stage is a clear signal that Pakistan needs to start thinking about how it can manage its development needs more independently.