Pakistan's growth-related projects hit as Donald Trump orders freeze on foreign assistance - What it means?

The United States has temporarily halted foreign assistance to Pakistan for re-evaluation following an executive order issued by President Donald Trump, according to a media report. This move has led to an immediate suspension of a number of critical projects funded by the United States Agency for International Development (USAID) in Pakistan.

Halted programs

The suspension impacts several key USAID initiatives, including the Ambassadors Fund for Cultural Preservation (AFCP), according to Geo News. The AFCP fund supports efforts to protect historic buildings, archaeological sites, museum collections, and traditional cultural expressions, such as indigenous languages and crafts.

Additionally, five major energy-related projects have been put on hold. These include:

Power Sector Improvement Activity

Pakistan Private Sector Energy Activity

Energy Sector Advisory Services Project

Clean Energy Loan Portfolio Guarantee Program

Pakistan Climate Financing Activity

Other projects in sectors such as health, agriculture, food security, education, and climate change have also been affected. Economic growth-related projects, including the Social Protection Activity, which was slated to end in 2025, are also on hold. Concerns have been raised that some of these projects might be canceled permanently or significantly reduced.

Impact and concerns

The total value of the affected projects remains unclear, as it is not known how much aid the US is currently providing to Pakistan. Officials in Pakistan have yet to comment on the suspension and its potential long-term impacts.

Reportedly, the US Embassy in Islamabad confirmed the move, attributing it to President Trump’s executive order for the reevaluation of foreign assistance.

Executive Order explained

The suspension is part of a broader reassessment of US foreign aid, a policy shift outlined in President Trump’s executive order. The order mandates a review of all foreign assistance programs to ensure they align with national interests. A statement from the US Department of State further clarified that the suspension will affect all foreign assistance programs funded by the State Department and USAID.

Tammy Bruce, spokesperson for the US Department of State, explained that the suspension was in accordance with Trump’s directive and emphasized the need for transparency regarding US foreign aid spending.

"Every dollar we spend, every programme we fund, and every policy we pursue must be justified with the answer to three simple questions: Does it make America safer? Does it make America stronger? Does it make America more prosperous?" Bruce said.

(With PTI inputs)