EDITORIAL: Among the plethora of controversial decisions taken by the Trump Administration since January 20, few have been as impactful as the 90-day suspension of nearly all foreign aid programmes.
This sweeping pause, intended to reassess alignment with President Donald Trump’s foreign policy priorities, has affected everything, from development assistance for the world’s poorest to military aid — though, unsurprisingly, support for Israel has remained exempt.
The ramifications for Pakistan are becoming increasingly apparent, straining its already fragile healthcare system and posing substantial economic risks. With aid to Afghanistan also halted, the likelihood of increased smuggling from Pakistan across our western border is now a growing concern.**
The fallout of this action has put United Nations Population Fund (UNPFA) programmes, major recipients of US development assistance, on the chopping block.
As a result, over 60 health facilities operated by the body in Pakistan are set to close, depriving 1.7 million people, including 1.2 million Afghan refugees, of life-saving reproductive health services. In fact, it isn’t just future aid that has been jeopardised; USAID has also halted funds already committed to the UNFPA, which had required over USD 308 million this year to sustain its services in South Asia.
As stressed by its Regional Director for Asia and the Pacific Pio Smith, these “provide a lifeline for women and girls in crises”.
There are genuine fears that this 90-day funding freeze could become indefinite, especially given Elon Musk’s aggressive posturing. Tasked by Trump to drastically scale down USAID, Musk has condemned the agency as a “criminal” organisation and declared it was “time for it to die”. The funding freeze and mass layoffs at USAID have sent shockwaves through the international development sector.
According to an estimate by The Guardian, US foreign assistance accounts for four out of every USD 10 spent on global humanitarian aid. For countries like ours, therefore, the fallout could be devastating — costing lives, heightening vulnerability for at-risk populations and severely disrupting the health sector.
Vital aid for reproductive services, child healthcare and other essential programmes is now at risk, worsening hardships for underprivileged communities.
Expecting Pakistan’s fiscally stretched government apparatus to fill the gaping holes left by these developments, at least in the short term, is unrealistic. For years, federal and provincial governments have neglected the health sector, failing to prioritise investments in critical infrastructure.
As a result, large segments of the population continue to rely on an overstretched and deteriorating healthcare system, leaving them particularly vulnerable in times of crisis.
There are also mounting fears that the halt in aid to Afghanistan could have grave repercussions for Pakistan’s economy.
As highlighted by a report in the media, apart from putting millions of Afghans at risk of starvation, the suspension of vital food and non-food aid to Afghanistan could also result in an uptick in the smuggling of the US dollar across our western border, weakening the rupee.
Pakistan will also have to brace for an increase in smuggling of a variety of commodities, from fuel and smart phones to food items, depriving authorities of valuable tax revenue and strengthening of the informal economy, which already accounts for 40 percent of the GDP. Furthermore, the illicit trade of staples like wheat, sugar, flour and petrol could trigger local shortages and inflationary pressures.
It is evident that Pakistan must urgently prepare for the multifaceted fallout of the suspension of US development funding. Strengthening of surveillance systems at our borders, dismantling of smuggling networks — including those benefiting from official complicity — and increasing social sector spending have become imperative.
Given new global realities, it is crucial that Pakistan builds resilient systems and protections to reduce dependence on foreign aid.
Copyright Business Recorder, 2025
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