Donald Trump’s cuts to USAID will hurt Asia, too
Even before Donald Trump’s administration slashed USAID, foreign aid was becoming less important in Asia. Thanks to economic growth in the region, the $53bn that Asia received in 2023 amounted to just 0.2% of collective gross national income (GNI), down from 0.7% in 1993 and much lower than Africa’s 2.4% (see chart). With the cuts to USAID, combined with decreases in commitments from Britain and other European countries, even those contributions will drop. But the costs could still be far-reaching, hurting the region and hindering its policymakers.
War-torn, aid-dependent places, such as Afghanistan, will be pushed to the brink. Nearly half of the Afghan population of 46m depend on international handouts for their survival, according to the United Nations. In 2023 Afghanistan got $2.4bn in aid, the equivalent of roughly 20% of its GNI. Half of that came from America and was mostly directed towards humanitarian and health causes. With much of that funding frozen, schools and health clinics have shut. On February 6th the UN’s food agency estimated that around 3.5m children are expected to be malnourished this year, an increase of 500,000 over 2024.
Even in richer Asian countries which get minuscule aid, the purge will have powerful effects. Take the Demographic and Health Surveys, one of USAID’s flagship programmes. The surveys capture health, fertility and nutrition data in 90 countries around the world, including 18 in Asia. They have yielded valuable insights for researchers and policymakers—and improved the governments’ ability to collect such data. In 2023, USAID handed over the Indian survey’s financing and administration to the Indian government.
Natural disasters may hit harder, too. One low-cost USAID programme, SERVIR, used NASA data to warn countries about climate-related extreme events. In 2023 the early-warning system alerted people in Bangladesh to a category-four cyclone, which limited the death toll to 145 people. Two decades earlier, a similar storm killed 138,000 people.
Development Innovation Ventures, another cancelled USAID programme, helped governments across Asia test out new policies. In India, it funded the development of a phone-based tool in 2010 that let rural health workers better manage their patients, mostly pregnant women. Over a decade after its deployment, the tool is now used nationwide by hundreds of thousands of workers to reach more than 75m families. According to an analysis by Michael Kremer, an economist, and others, the project yielded benefits worth $20m between 2010 and 2019 from an initial grant of $826,000.
It is unclear who will fill the gap. China and Japan, the big regional donors, tend to favour financing infrastructure projects—and often through loans. Asian philanthropy is still relatively nascent. In 2022 Asia’s billionaires donated $24.2bn, less than a third of their North American counterparts, despite outnumbering them, according to Wealth-X, a consultancy.
Still, aid has often backfired in the region. In India, for example, a family-planning and male-sterilisation programme in the 1970s was so unpopular that it led to nationwide protests. The episode fostered scepticism of foreign assistance that many Indians still feel today. Last week the spokesman of India’s ruling Bharatiya Janata Party suggested some USAID funding has been routed through “various George Soros-linked fronts...to meddle with India’s electoral process”.
Another reason for mistrust is corruption. The process of disbursing aid is ripe for graft. Money is often awarded to Western contractors who funnel it through multiple layers, allowing money to be skimmed at each stage. Many Afghans complain about government officials who would skim money from education initiatives, creating “ghost schools” which existed only on paper.
Despite this, the case for humanitarian aid is still strong. In Afghanistan hunger is widespread and the largely NGO-run health system is on the verge of collapse. The Taliban is ill-equipped to step up and it is unclear if other countries will. Aid may be a political decision, but for some countries it is a matter of survival. ■