WASHINGTON: In a decision with far-reaching ramifications that is also impacting ongoing projects in Pakistan, the Trump White House has put a halt to all federal grants and loans, as well as any funds designated “for foreign aid” and for “non-governmental organizations.”
The funds will be suspended as the new administration examines grants and loans to make sure they are in line with the Republican president’s policies, the Office of Management and Budget (OMB) stated in a memo on Monday.
The administration started taking steps to halt the flow of life-saving medications for HIV, malaria, and tuberculosis, as well as medical supplies for newborns, to nations that receive aid from the US Agency for International Development (USAID), which is regarded as the largest aid donor in the world, as part of the suspension of foreign aid.
The Trump administration has also threatened “disciplinary action” against any employees who disobey its directives and placed roughly 60 top career USAID officials on leave.
Career employees in top roles across nearly all USAID bureaus in Washington, including those in digital technology, children’s education, water security, and energy security, were among those placed on leave.
The agency’s new leadership found a number of practices that “seemed to be designed to circumvent the President’s Executive Orders and the mandate from the American people,” according to an internal memo distributed to USAID staff on Monday night.
USAID officials were informed in a second message that the freeze on foreign aid expenditures meant a total stop. Officials returning to their duty stations and emergency humanitarian food assistance are the only exceptions.
It’s not unique to Pakistan. A senior Pakistani official told Dawn, “It’s an executive order that affects all nations, except Egypt and Israel.” He added that a suspension order meant that the aid may restart following a review.
Employees on USAID-funded projects in Islamabad, however, have attested to receiving stop-work orders, some of which have led to terminations and furloughs.
In a tweet after the suspension order, researcher Dr. Gabriel Filippelli bemoaned, “This new administration has taken away my new award from the State Department to help Pakistan deal with air pollution and climate change.”
Orders to stop work
Trump had issued an order just hours after taking office to suspend foreign aid for 90 days in order to assess whether it was in line with his foreign policy aims. Even for current assistance, the State Department issued a global stop-work order last week.
Israel and Egypt have been granted waivers on military financing, while Pakistan has not received any such exclusions.
The United States supplied 42% of all humanitarian help recorded by the United Nations in 2024 and disbursed $72 billion in assistance in fiscal year 2023. This comprised $1 billion for Afghanistan, $231 million for Pakistan, $440 million for Bangladesh, and $175 million for India.
Although 2024 figures are not yet available, many projects in Pakistan were funded by USAID and other organizations.
Five energy projects, four economic growth initiatives, five agriculture programs, and numerous more health and education initiatives in Pakistan are all impacted by the suspension.
Funds for governance, human rights, and democracy have also been suspended while a review is conducted.
$16 million was awarded to one of the impacted projects for early recovery, risk reduction, and resilience (ER4) initiatives, which aimed to increase the ability of vulnerable groups to withstand natural disasters.
Afghanistan may suffer greatly as a result of the suspension. Following cuts in international help and the upcoming suspension in US foreign funding, the head of the World Food Programme (WFP) in Afghanistan told reporters earlier this week that the organization could only feed half of the millions of Afghans in need.