Bangladesh faces uncertainty following USAID’s recent decision

Thousands of employees working on USAID-funded projects in Bangladesh face the risk of losing their jobs following a recent decision by the United States Agency for International Development (USAID) to cut or withdraw funding from several initiatives. The decision has sparked widespread concern among development workers, NGOs, and local communities dependent on these programs.

A devastating blow
USAID, a key player in Bangladesh’s development sector, has historically provided significant financial support for projects focusing on health, education, women’s empowerment, and disaster relief. However, a reassessment of funding priorities by the agency has led to the suspension or reduction of financial aid for multiple projects.
According to sources within the development sector, USAID has decided to either discontinue or significantly downsize funding in areas such as climate resilience, poverty reduction, and human rights advocacy. This move is expected to impact not only direct employees of USAID-funded projects but also thousands of indirect beneficiaries who rely on these initiatives.
Experts warn that cuts in aid might hinder the country’s progress toward achieving the Sustainable Development Goals (SDGs) by 2030. “Many crucial projects rely heavily on USAID support. Without it, Bangladesh may struggle to maintain the momentum of development,” said Dr. Mohammad Lutfor Rahman, Professor, Department of Economics Jahangirnagar University.

Thousands of employees in uncertainty
The decision has left thousands of employees in limbo, particularly those working for NGOs and implementing partners that rely on USAID grants. Many of these professionals, including field workers, researchers, and administrative staff, are now facing an uncertain future.
Speaking to Views Bangladesh, an employee from a USAID-funded health project expressed deep concern: “I have dedicated over a decade of my life to this program. If the funding stops, I will lose my job, and thousands of people in rural communities will be deprived of essential healthcare services.”

Deep concern
Nasima Begum, a local Bangladeshi employee who worked on a USAID-funded project in Cox’s Bazar has expressed deep concern and said that "the suspension of funds is alarming. Many of us working on USAID projects have dedicated years to programs that improve livelihoods, healthcare, and education in Bangladesh. If the funding remains halted, thousands of beneficiaries—and even employees like us—may face uncertainty”.
She emphasized that USAID-supported projects play a crucial role in sectors such as public health, disaster response, and counter-trafficking efforts. A sudden pause in financial support could stall vital programs and disrupt community-based interventions.
The suspension of USAID funds comes amid broader concerns over governance and regulatory challenges in foreign aid operations. While U.S. officials have not disclosed a definitive timeline for resolving the issue, local development workers and project beneficiaries remain anxious about the future.

USAID’s official statement
Replayed the reporter’s mail from the Views Bangladesh quarries, the USAID Spokesperson said that “at this moment, to do a thorough review, all programs and grants without a waiver approved by the Secretary of State using foreign assistance funding are paused. The Secretary of State has approved life-saving humanitarian assistance. Implementers of existing life-saving humanitarian assistance programs should continue or resume work.”

Impact on Bangladesh
The International Centre for Diarrhoeal Disease Research, Bangladesh (icddr,b) laid off over 1,000 employees following the suspension of U.S. government funding a few days ago. These staff members were involved in various research projects funded by the United States Agency for International Development (USAID). The layoffs began on Wednesday, with employees receiving termination letters in phases.
This action comes after the U.S. administration decided to halt funding for foreign programs, including those in Bangladesh. In response, icddr,b has suspended all U.S. government-funded projects and research until further notice. AKM Tariful Islam Khan, Senior Manager of Communications at icddr,b, expressed regret over the inconvenience caused to clients, partners, and colleagues, and conveyed hope for resuming operations as soon as possible.
About this issue, Dr. Mohammad Lutfor Rahman, Professor, Department of Economics Jahangirnagar University said that the in absence of USAID the Bangladesh Government should take over some of the projects that are related to government policy and its part of SDG’s goal.

Reactions
The government of Bangladesh and several NGOs are in discussions to find alternative funding sources to mitigate the crisis. Some international donors and private sector entities are being approached for financial support to sustain critical projects.
NGOs have urged USAID to reconsider its decision and adopt a phased approach instead of an abrupt funding cut. “We need time to transition and secure alternative funds,” said a senior official from a leading NGO.

Political and strategic implications
Some analysts believe that USAID’s decision may be influenced by broader geopolitical factors. The evolving diplomatic landscape and U.S. foreign policy priorities might have contributed to the shift in aid distribution.
While USAID has not provided an official statement detailing the exact reasons for the funding cuts, observers speculate that changes in global priorities, budget reallocations, and internal policy shifts could be key factors.
Dhaka University’s Development Studies Teacher Dr. Nayeem Sultana told Views Bangladesh, “USAID has been a crucial partner in Bangladesh’s progress. The loss of funding could roll back years of hard work and slow down the country’s efforts to achieve its Sustainable Development Goals (SDGs).”

The way forward
As thousands of employees brace for the impact of USAID’s decision, the coming months will be critical in determining the future of affected programs. Stakeholders are calling for urgent dialogue between the U.S. government, Bangladesh’s authorities, and international partners to find a sustainable solution.

For now, the fate of thousands hangs in the balance, as the ripple effects of USAID’s decision threaten to reshape the landscape of Bangladesh’s development sector.

Statement over Trump's executive decision

The US Department of State has issued a statement over President Donald Trump's decision over pausing donations.

The statement stated that Americans are a hardworking and generous people, who have sacrificed their blood and treasure to help their fellow man across the globe. But no foreign nation is entitled to those benefits, and no foreign aid program is above scrutiny.

"The previously announced 90-day pause and review of U.S. foreign aid is already paying dividends to our country and our people. We are rooting out waste. We are blocking woke programs. And we are exposing activities that run contrary to our national interests. None of this would be possible if these programs remained on autopilot."

"Every dollar we spend, every program we fund, and every policy we pursue must make America safer, stronger, and more prosperous. And that is exactly what we are doing right now – prioritizing America’s core national interests one dollar at a time," it added.

How much does the United States spend annually on foreign aid?

Even setting aside generous support for Ukraine over the past several years, the U.S. is spending roughly $40 billion in foreign aid annually. That is more than the GDP of multiple U.S. states and accounts for four out of every 10 dollars in global humanitarian aid. Americans deserve transparency and accountability for every dollar we spend, especially when it is spent abroad instead of at home.

Why did the U.S. State Department initiate a 90-day pause on foreign aid?

It is impossible to evaluate programs on autopilot because the participants – both inside and outside of government – have little to no incentive to share programmatic-level details so long as the dollars continue to flow. A temporary pause, with commonsense waivers for truly life-threatening situations, is the only way to scrutinize and prevent waste.

What type of spending has been prevented by the pause?

Without the pause, U.S. taxpayers would have provided condoms (and other contraceptive services) in Gaza, climate justice marketing services in Gabon, clean energy programs for women in Fiji, support for gender development programs, family planning throughout Latin America, sex education and pro-abortion programs for young girls globally, and much more. These types of programs do not make America stronger, safer, or more prosperous.

What type of funding is permitted to move forward?

The original order, dated January 24, 2025, contained several important exceptions, including “emergency food assistance,” and outlined the process to secure additional exceptions. Requests were reviewed and, where needed, approved within hours. Subsequently, the Secretary approved a broad waiver on January 28, 2025, for humanitarian aid, which is defined as “life-saving medicine, medical services, food, shelter, and subsistence assistance, as well as supplies and reasonable administrative costs as necessary to deliver such assistance.”

Have any waivers been granted for non-humanitarian assistance?

Critical national security waivers have been granted, including to ensure the protection of U.S. personnel overseas, facilitate the repatriation of illegal aliens, enforce non-proliferation obligations, and much more. As mentioned, exceptions were reviewed and, where needed, approved within hours.

What is the process to secure a waiver?

The Department provided straight forward guidance on January 24, 2025, encouraging bureaus that manage foreign assistance to send waiver requests with the following information:

Bureau/Office/Mission Name
Program Name
Program Description
Program Location(s)
Intended Programmatic Outcome
Justification for Waiver
Fiscal and Earmark information

That process was used successfully dozens of times in the first several days alone; however, many requests failed to provide the level of detail necessary to allow a thorough evaluation. Subsequent guidance, sent on January 28, 2025, encouraged implementing partners and NGOs to work through their U.S. government agency partners on any additional requests.

How much has this process saved U.S. taxpayers?

In just a few days, the Department received billions of dollars in waiver requests. Many of those requests are still under a merit-based review as they are not considered emergency or life threatening; however, even at this early stage, over $1,000,000,000 in spending not aligned with an America First agenda has been prevented.