US temporarily suspends aid to Pakistan, leading to impact on key growth sectors

• Latest US decision impacts various sectors in Pakistan.
• Move follows "stop-work" order by US State Department.
• Officials will decide to continue programmes after review.
  

The United States has paused Pakistan's foreign assistance for re-evaluation as per an executive order issued by President Donald Trump, an official at the US Consulate in Karachi recently confirmed to Geo News.

Without mentioning any country, Tammy Bruce, spokesman for the US Department of State, has also issued a statement in this regard.

"Consistent with President Trump's Executive Order on Reevaluating and Realigning United States Foreign Aid, Secretary Rubio has paused all US foreign assistance funded by or through the State Department and US Agency for International Development (USAID) for review," Bruce said.

"As Secretary of State Marco Rubio has said, 'Every dollar we spend, every programme we fund, and every policy we pursue must be justified with the answer to three simple questions: Does it make America safer? Does it make America stronger? Does it make America more prosperous?'" he added.

This move has instantly stopped a number of important USAID projects in Pakistan, including the Ambassadors Fund for Cultural Preservation (AFCP) which is the flagship programme to promote cultural heritage preservation and protection.

According to the US embassy, this fund "helps protect historic buildings, archaeological sites, museum collections, and traditional cultural expressions like indigenous languages and crafts around the world."

In other words, the AFCP demonstrates 'the depth of US respect for the cultural heritage of Pakistan.'

Additionally, five projects related to the energy sector have also come to a halt as a result of this decision.

They include Power Sector Improvement Activity, Pakistan Private Sector Energy Activity, Energy Sector Advisory Services Project, Clean Energy Loan Portfolio Guarantee Program and Pakistan Climate Financing Activity.

Economic growth-related four projects are also hit. Among them, Social Protection Activity was the only programme supposed to end in 2025.

Others include Investment Promotion Activity, Pakistan Private Investment Initiative and Economic Recovery and Development Activity. Luckily, the $24.8 million FATA Economic Revitalisation Programme, implemented by the United Nations Development Programme has already been completed.

In the agriculture sector, the Gomal Zam Command Area Development Project was completed in 2024. However, two of the five programmes were expected to end in 2025.

They include Water Management for Enhanced Productivity and Pakistan Agriculture Programmes-II. Yet, Livelihood and Food Security Activity for Khyber Pakhtunkhwa and the Flood Affected Districts of Pakistan, Climate Smart Agriculture and Recharge Pakistan are also affected.

Democracy, Human Rights and Governance funds are also hit by Trump's order.

Four of these 11 projects were expected to be completed in 2025. However, a $19.1 million project to strengthen Electoral and Legislative Processes was just completed in 2024.

Others include Building Peace in Pakistan, Land Registration in Merged Areas Activity, Community Resilience Activity-North, Merged Areas Governance Programme, Inclusive Democratic Processes and Governance, Hum Ahang, Building Understanding and Involvement in Local Governance and Democracy, Subh-e-Nau, Justuju and Water Governance for Sindh.

In the education sector, one of the four projects, Improving Girls Education Activity, was expected to be completed in 2025. A similar programme, Higher Education System Strengthening Activity and Education Resilience Activity, that focused on Sindh and KP are also halted.

In the health sector, Integrated Health Systems Strengthening and Service Delivery, Tuberculosis Local Organisation Network, Tuberculosis Implementation Framework Agreement, Building Healthy Families and Global Health Security Program are paused.

Fears are being expressed that some of these programmes will be shelved forever or at least reduced significantly. And why not? It is an era of America First.

For every penny, the US president is looking for a payback. The day President Trump was sworn in for his second term, the White House had labelled international aid as an industry.

In a bold admission, it stated: "The United States foreign aid industry and bureaucracy are not aligned with American interests and in many cases antithetical to American values. They serve to destabilise world peace by promoting ideas in foreign countries that are directly inverse to harmonious and stable relations internal to and among countries."

However, there is a silver lining.

In a recent statement, the White House stated: "The responsible department and agency heads, in consultation with the Director of OMB, will make determinations within 90 days of this order on whether to continue, modify, or cease each foreign assistance programme based upon the review recommendations, with the concurrence of the Secretary of State."