KARACHI: Khurram Schehzad, an adviser to the Pakistani prime minister on economic affairs, said on Tuesday US President Donald Trump ordering a 90-day pause in foreign development assistance pending assessments of consistency with his foreign policy would have “no significant impact” on Pakistan.
Trump’s executive order has set alarm bells ringing among aid groups and governments around the world that depend on US largesse.
According to a US State Department cable seen by Reuters, the decision has affected 11 governance programs in Pakistan as well as initiatives under the Ambassadors Fund for Cultural Preservation. The suspension hits five energy projects, four in economic growth, five in agriculture, and several others in education and health. Democracy, human rights, and governance funds have also been put on hold, pending a review.
Over the past twenty years, the US had provided more than $32 billion in direct support to the people of Pakistan, according to the website of its embassy in Islamabad.
“Firstly, the aid has been temporarily halted and secondly, the aid has been halted for all countries, not just Pakistan, and thirdly, it is a very small portion of the overall grants,” Schehzad told Arab News when questioned about the impact of pausing development assistance from the US Agency for International Development for 90 days.
“Total grants for fiscal year 2025 were hardly 1 percent of the total external financing. Grants received so far in the first five months of fiscal year 2025 stand at $38 million, which has already surpassed the budgeted target of $21 million for FY25. So no significant impact as such.”
Humanitarian organizations and UN agencies say they could face drastic curbs on their ability to distribute food, shelter and health care if the freeze becomes permanent. The US is by far the biggest contributor to global humanitarian aid, supplying an estimated $13.9 billion in 2024, accounting for 42 percent of all aid tracked by the United Nations.
The cuts will also affect the supply of lifesaving drugs for HIV, malaria and tuberculosis around the globe, which millions of people depend on.
The order to freeze funding has thrown USAID missions and their partners into chaos, with many organizations unsure whether to lay off staff, start selling assets such as cars or tell employees to take unpaid leave. USAID has reportedly been forbidden from communicating with implementing partners except to say funds have been paused.
