THE decision to dismantle the United States Agency for International Development (USAID) is a watershed moment in American foreign policy.
For over six decades, USAID has been at the forefront of global humanitarian efforts, disaster relief and development aid, solidifying the United States’ role as a benevolent power.
The agency has worked in over 100 countries, funding programs in health, education, economic growth and governance.
The abrupt shutdown of such a crucial institution is not just a bureaucratic restructuring; it represents a seismic shift in the way the United States projects power abroad.
Foreign aid has never been a purely altruistic endeavour. For Washington, it has served as a vital diplomatic tool, reinforcing alliances, stabilizing volatile regions and countering the growing influence of rival powers. When the US provided infrastructure funding in Africa, it was not just about roads and bridges—it was about countering China’s Belt and Road Initiative. When USAID supported governance reforms in Eastern Europe, it was as much about fostering democracy as it was about curbing Russian influence. The closure of the agency is not just the cutting of an expense; it is the voluntary surrender of one of America’s most powerful instruments of influence.
For nations like Pakistan, the decision is particularly damaging. Over the years, USAID has funded critical development projects, from modernizing agriculture to supporting education and maternal health initiatives. The immediate loss of American aid will leave gaps in vital sectors, forcing Pakistan to turn to other partners for assistance. China, which has been expanding its economic footprint in the region through the CPEC, will be an obvious beneficiary. The shift will not only deepen Pakistan’s economic dependence on Beijing but also reduce Washington’s leverage in shaping policy decisions in Islamabad. The long-term result is clear: less American influence in a nuclear-armed country at the crossroads of South Asia.
The impact extends beyond Pakistan. Across Latin America, Africa and Southeast Asia, USAID-funded initiatives have played a key role in fostering development, mitigating conflicts and promoting American values. These programs have not just been about economic aid; they have helped cultivate goodwill, shaping global perceptions of the US as a leader in humanitarian efforts. In Haiti, USAID played a crucial role in post-earthquake recovery. In Afghanistan, it helped rebuild infrastructure and support education, particularly for women and girls. In Ukraine, it has been instrumental in strengthening democratic institutions. These programs may not always make headlines, but they have quietly reinforced America’s global standing. Their sudden withdrawal leaves a vacuum that adversaries are eager to exploit.
The Trump Administration has defended the decision on grounds of efficiency, arguing that USAID has been plagued by bureaucracy and mismanagement. There is some truth to these claims—like any large government agency, USAID has not been without inefficiencies. But the idea that dismantling the entire agency will somehow improve American governance is misguided. The broader pattern of retreat from global institutions is clear. From withdrawing from the Paris Climate Agreement to defunding the World Health Organization, the Administration has consistently prioritized domestic politics over international leadership. The decision to shut down USAID fits squarely into this trend, reinforcing an inward-looking foreign policy that undercuts America’s global standing.
The legal and diplomatic fallout of this decision is also significant. Congress has already raised concerns about whether the executive branch has the authority to unilaterally dismantle an agency created through legislation. Lawsuits challenging the shutdown have been filed, arguing that the move violates the separation of powers. Meanwhile, US allies that have relied on joint aid programs with USAID are scrambling to reassess their strategies. European nations, which have often coordinated development projects with the US, now face greater pressure to fill the gap. In many ways, this decision can be a first step for the dependent nations to stand on their foot and work on self-reliance.
History offers a cautionary tale about the consequences of US disengagement from international development. After the Cold War, American aid helped stabilize Eastern Europe and integrate former Soviet bloc nations into the Western economic system. The Marshall Plan, which rebuilt Europe after WWII, was not just an economic recovery effort—it solidified US leadership in the post-war world. When the US led in global development, it gained long-term diplomatic and economic benefits. However, when it withdrew, rivals filled the void, often leading to consequences that required costly American intervention later on.
The world does not pause for America’s internal political battles. As Washington debates foreign aid, China expands infrastructure investments, Russia strengthens security partnerships and developing nations adjust alliances. The real question is not whether the US can afford to maintain USAID, but whether it can bear the consequences of disengagement. History shows that the cost of stepping back will outweigh the price of staying engaged. America’s strength has always been its ability to influence the world through ideas, institutions and alliances, not just military power. The dismantling of USAID is more than a bureaucratic decision—it’s a strategic retreat the US cannot afford in today’s competitive global landscape.
—The writer is PhD Scholar International Relations, based in Islamabad.
(guleayeshabhatti@gmail.com)
