USAID: The Good, The Bad, And The Ugly – Analysis
Trump’s decision to shut down USAID has drawn mixed reactions with some justifying and others damning.
Last week, hundreds of internal contractors working for USAID were put on unpaid leave, and some were terminated after President Donald Trump imposed a sweeping freeze on US foreign aid worldwide and put a 90-day hold on its activities.
“It’s been run by a bunch of radical lunatics, and we’re getting them out,” Trump told reporters about US Aid for International Development (USAID). “Time for it to die,” added his “governmental efficiency” Czar, Elon Musk. Musk wrote on his social media platform X that USAID was a “criminal organisation”. In a separate post he declared that “It’s beyond repair and should be shut down.”
The comments by Trump and Musk, who Trump had appointed to lead the new Department of Government Efficiency (DOGE), have sparked a growing debate over the value and future of USAID.
USAID’s exit from the global scene has caused breast beating in many quarters, particularly aid workers and NGOs. But there is also a sense of relief among others who see USAID as a hidden hand of US imperialism.
Disdain for Soft Power
Be that as it may, the move to wind up USAID is a reflection of Trump’s disdain for social welfare and the use of soft power as an instrument of foreign policy. It reflects his preference for transactional relations based on hard economic and political bargaining with just one objective, namely, the advancement US interests and the maximisation of tangible benefits for the US. It is completely non-ideological and amoral, if not immoral.
While some applaud his pragmatic approach depending on cost-benefit analysis, others worry that China (and to a smaller extent Russia) could fill the gap in soft power. That could be to the detriment of America’s wish to be all-embracing super power. After all, Trump is propagating his “America First” policy only to make “America Great Again” not only domestically but internationally too. The question is: “Can he achieve this only by economic power backed by military power without soft power?”
Soft power could well go into the hands of America’s enemies and rivals. While Russia is powerless to use soft power, given its economic difficulties, China has both money power and technological prowess to push its way into spaces vacated by the short-sighted Trump by using soft power in addition to economic power.
China been projecting its Belt and Road Initiative (BRI) not as a one-way street but as a programme of development cooperation for mutual. China also funds social welfare projects and charities outside the BRI framework. China is projecting itself in the Global South as a non-interventionist aid giver unlike the Western democracies which have the promotion of their form of democratic government as the ideal for all.
China, on the other hand, is non-interventionist, in as much as, it does not promote regime change. It prefers to work with existing governments regardless of the latter’s human rights or democratic.
The West accuses China of promoting its authoritarian model in competition with the Western democratic model. But this charge is groundless because President Xi Jinping has described the Chinese model as “Socialism with Chinese characteristics”, which, by definition, is unique to China and not replicable. What China is aiming at is a system of international relations based not on uniformity but diversity. It is working on the old Soviet model which was based on relations between different social system. This is in sharp contrast to the US and the Western bid to promote Western liberal democracy as one size which fits all. USAID had been roped into this task, even making it its main objective, though kept under wraps.
After Musk’s criticism, members of Congress took to social media to debate whether USAID could and should be permanently shuttered. Chuck Schumer, the Democratic Party’s leader in the Republican-controlled Senate, said on X. “This’d be illegal and against our national interests.” But Republican Senator Rand Paul responded saying: “Abolish USAID and all foreign aid.” Democratic Senator Chris Coons also weighed in on X, saying eliminating the agency would make the US “less safe”.
Product of Cold War
USAID founded in 1961 by President John F. Kennedy, it was a product of the Cold War. The Soviets and the Chinese were tom toming their Communist revolution and governance system as the hope of mankind outside the charmed circle of the rich West. The left-leaning and liberal Kennedy established USAID under the Foreign Assistance Act of 1961 to help developing countries improve their economic, social an political conditions.
According to the US government’s official website, USAID is the “principal US agency to extend assistance to countries recovering from disaster, trying to escape poverty, and engaging in democratic reforms”. Before the on-going freeze, USAID was the world’s largest single donor. In fiscal year 2023, the US disbursed US$ 72 billion in assistance worldwide on everything from women’s health in conflict zones to access to clean water, HIV/AIDS treatments, energy security and anticorruption and democracy awareness work.
USAID provided 42% of all humanitarian aid tracked by the UN in 2024. In 2023, Ukraine alone received US$ 14.4 billion from USAID. The second-highest recipient, Jordan received US$ 770 million and even Afghanistan received US$ 332 million.
USAID provided over $1 billion in relief following the Haiti earthquake. USAID’s health programs have also saved lives worldwide, including through the President’s Emergency Plan for AIDS Relief (PEPFAR), which has provided HIV/AIDS treatment to millions. The agency also combats diseases like malaria and tuberculosis through vaccination efforts. Additionally, it promotes democratic governance by supporting anti-corruption measures, election monitoring, and independent media.
The agency’s impact is evident in various case studies, such as its efforts during the Ebola outbreak in West Africa and the Power Africa initiative, which has improved access to clean water and renewable energy.
Criticisms
Criticism of the agency has ranged from its foreign policy agenda to its inefficiency. In 2014, USAID was accused of secretly creating a “Cuban Twitter” called ZunZuneo to stir unrest and undermine the Cuban government. USAID denied the charge. In 2023, Mexico’s President asked the US to stop USAID from funding groups hostile to his government “contrary to international law.”
In Sri Lanka, and India, there is a healthy suspicion of NGOs and their Western benefactors including USAID. A fringe Sri Lankan group “Coalition Against Partition of Sri Lanka” protested in front of the US Embassy in Colombo urging President Trump to investigate if USAID funding was used to oust former leader Gotabaya Rajapaksa through mass protests and to take action against the current US Ambassador for promoting LGBTQ among Sri Lankan children. The group reminded Trump of his statement that “there are only two genders: male and female.”
In India, the Hindu rightwing supporters of Prime Minister Narendra Modi had accused the US philanthropist and democracy campaigner George Soros of promoting groups to dislodge Modi from power. In Bangladesh, pro-Hasina groups charge Soros of funding the movement that ousted her last year.
Though the US touted its foreign aid programmes as aimed at strengthening young democracies, it used USAID to support friendly authoritarian regimes during the Cold War, including in Taiwan and South Korea when they were under military rule and the Democratic Republic of the Congo under Mobutu Sese Seko.
According to an audit done at the behest of USAID, the public accounting firm of Williams, Adley & Company highlighted inefficiency and bureaucratic challenges the agency faced regarding indirect cost rates. Those rates referred to overhead or administrative costs that an organisation could charge to a federal grant or contract “USAID does not have proper documentation to support indirect costs charged,” the auditors said.
Advantage to China
Western writers had noted that China’s influence in Latin America and sub-Saharan Africa had been growing. It had become an increasingly important trading partner and investor in recent years. In October 2024, the China Development Bank (CDB) announced that it had provided about US$ 160 billion to help finance hundreds of projects throughout Latin America. Closing of USAID would thus be a boon to China.
Writing in The Guardian, Helen Davidson and Amy Hawkins, quote Prof Huang Yanzhong, senior fellow for global health at the Council on Foreign Relations as saying that what Trump is doing is basically providing China a perfect opportunity to rethink, to renew soft power projects, and get back on track to trans global leadership. More than one analyst described the shuttering of USAid as a “self-inflicted wound”.
In 2018, the Chinese government created the standalone China International Development Cooperation Agency, or China Aid, to streamline China’s spending, including its foreign investment programme, the belt and road initiative (BRI). Beijing doesn’t disclose foreign aid budgets but a study by William & Mary’s Global Research Institute found China lent US$ 1.34 trillion to developing nations between 2000 and 2021, mostly through the BRI.
While China Aid operates differently to USAid, by focusing more on loans and highly visible infrastructure projects rather than partnering with local organisations, both agencies have similar objectives – spreading their respective government’s soft power and influence, The Guardiansaid.
