In the early days of the Trump administration, the White House reduced or frozen virtually all foreign aid programs. It has also indicated plans to review and possibly revamp U.S. foreign aid in general.
As part of these initial cuts and freezes, the White House has moved to immediately end or suspend any projects the United States had been supporting in Bangladesh. The country’s infrastructure and state institutions have been collapsing and in chaos since the overthrow of the Sheikh Hasina government last summer. Many state institutions are still not functioning properly or are riddled with corruption and lack of oversight. The country is essentially bankrupt.
More on:
The freeze, which includes an exemption for aid to displaced Rohingya living in a massive refugee camp in eastern Bangladesh, is set for ninety days—for now. However, it could easily be extended given the Trump administration’s general disdain for aid and the unlikelihood of conducting a comprehensive review of all foreign aid programs within ninety days.
Bangladesh’s pro-democracy protestors forced out a dictator last year, and the caretaker leader, Muhammad Yunus, is truly dedicated to reforming and rebuilding the country. Cutting aid now could potentially set back a major success story—The Economist named Bangladesh its country of the year for 2024.
More importantly for the Trump administration and the United States, these cuts will prompt Bangladesh, a large country in a highly strategic location, to turn to other funders. Before Sheikh Hasina’s fall, Bangladesh had developed very close economic and strategic relations with China while maintaining generally friendly links with India.
If the United States essentially abdicates any role in a country that seeks U.S. links and could be a major strategic partner next to China, Beijing is sure to offer Bangladesh even more aid and loans than it already does. Beijing has backed several Belt and Road projects in Bangladesh and has provided its own support to the caretaker government. Unsurprisingly, in the wake of the U.S. aid freeze, the caretaker government has reached out to China and pushed to boost bilateral links to a higher level, which would not be good for U.S. regional strategic aspirations.
More on: