Washington’s abrupt suspension of nearly all foreign aid could upend Bangladesh’s fragile efforts to stabilise its economy and hold national elections, analysts said, warning that vital US-funded programmes from governance to health may be in jeopardy.
Bangladesh, a major recipient of funds from the United States Agency for International Development (USAID), has long relied on the money to bolster global food security and education initiatives and manage economic turbulence.
The aid suspension stems from an executive order issued by US President Donald Trump on January 20 mandating a 90-day review of all foreign help to ensure alignment with US foreign policy objectives. While most programmes, including those under USAID, are affected, exceptions have been made for emergency food aid and military help to Israel and Egypt.
The freeze comes as Dhaka’s interim government, led by Nobel laureate Muhammad Yunus, tries to restore order and set a date for national polls after a student-led uprising in August forced former prime minister Sheikh Hasina to flee.
Bangladesh’s once-promising economy has been battered by high inflation and crippling debt since the Covid-19 pandemic, while mounting incidents of communal violence threaten attempts to stabilise the political landscape.