Harsha Kakar
Directions by the new Trump administration on stopping all US foreign aid, initially for a period of 90 days, has resulted in uncertainty and confusion across the globe as also the UN. Agencies responsible for implementing different projects are confused on which programs to stop and how to manage their staff, as finances are frozen. Blocking of aid will impact on going projects in many third world countries, largely in Asia and Africa.
It will also impact foreign military financing to countries in conflict, including Ukraine. Only Israel and Egypt are currently exempt. Trump had called for a ninety-day freeze in aid; however, directions by Secretary of State Marc Rubio made no such mention except that each case will be reviewed individually.
Donald Trump had stated in an address, ‘We get tired of giving massive amounts of money to countries that hate us.’ This US is largely unpopular in Islamic nations as also in many third world nations, however had continued to fund projects there either directly or through the UN. There is no doubt that the US would assess whether nations being provided aid, military as also for humanitarian purposes, are not critics of Washington.
In Asia, Bangladesh and Pakistan will be specifically impacted. United States Agency for International Development’s (USAID) largest projects in Asia are in Bangladesh, encompassing food security, health, governance, education, and environmental. It is also involved in providing humanitarian assistance including catering for Rohingya refugees. For some reason, life-saving food and nutrition support for displaced Rohingya in Bangladesh has been exempt from the current freeze.
US support for Bangladesh was bound to be impacted with a change in the White House. Mohamad Yunus, the chief advisor of Bangladesh, was close to the US Democractic Party and a member of the Clinton Foundation. He had contributed to Hillary Clinton’s as also Kamala Harris’s Presidential campaigns. Grameen America, the bank’s nonprofit US flagship, which Yunus chairs, gave approximately USD 300,000 to the Clinton foundation.
The regime change in the country was pushed by the US deep state, backed by the Biden administration, possibly employing USAID. To pacify Yunus’s concerns, post the blocking of USAID, Alex Soros, son of George Soros, met Yunus in Dacca recently and possibly offered to continue supporting Bangladesh. In fact, the regime change in Bangladesh was one of the few foreign policy disagreements between New Delhi and Washington during the Biden era.
Trump had stated in 2016, ‘Where is the micro-finance guy from Dhaka…I heard he donated to see me lose.’ The dislike between Yunus and Trump is mutual. Hence Yunus lacks support within the current administration in Washington.
The Indian foreign minister in his interaction with Marc Rubio, discussed Bangladesh, where treatment of minorities was a subject. He highlighted India’s concerns. Trump was also critical on the same and had mentioned during campaigning, ‘It (violence against minorities in Bangladesh) would have never happened on my watch. Kamala and Joe have ignored Hindus across the world and in America.’
Bangladesh had received almost USD 500 million in USAID in 2023. After the overthrow of the Sheikh Hasina regime in Aug last year, it was promised additional support. A number of senior Biden Government officials had travelled to the country. Now all appears to be in jeopardy. Bangladesh was also assured of additional loans from the world bank and the IMF. Will these be granted is a question.
Similar would be the impact on Pakistan. In his first term Trump had blocked all military aid to Pakistan, which was partially lifted by Biden, but again faces blocks. In 2022 and 2023, Pakistan received USD 80 million as USAID. This was for upliftment of the economically weaker sections. A number of ongoing projects will come to a standstill. Considering the poor economic state of Pakistan, stopping this aid would impact its economy. Afghanistan will be similarly hit, especially as the World Food Program stops providing assistance.
Both Bangladesh and Pakistan face immense financial woes, especially as both are seeking loans from the IMF to stay afloat. Unemployment is on the rise as also there are food shortages. Stopping of aid would add to instability in these countries increasing anger amongst the population.
It would open doors for the entry of China into these states, adding to India’s concerns. Pakistan is already indebted to China and Bangladesh desperate for funds may also follow suit. The growing proximity of Pakistan and Bangladesh would benefit China, which is already enlarging its presence in the country.
The Chinese ambassador to Dhaka, Yao Wen, recently participated in a warm clothes and food distribution programme at the behest of the Jamaat-e-Islami. Earlier members of this organization had travelled to China on a visit. However, while China may provide loans, it is unlikely to provide aid to counter the US. Accepting Chinese loans may be the next best alternative for these countries in lieu of USAID and possible restrictions imposed by US led global lending agencies.
In both countries, Pakistan and Bangladesh, the US is disliked mainly because of its support to Israel. It is perceived as being anti-Islam. Further, as long as Yunus remains the leader of Bangladesh, Dacca is unlikely to get the same aid as it received earlier. Thus, while USAID may resume in the coming months, the quantum being allocated to these countries would be far less and may even come with strict conditions. This is where India must exploit its proximity with Washington and demand strict monitoring of all expenditure. PM Modi’s upcoming visit to the White House will definitely involve discussions on Pakistan and Bangladesh and what India would expect the Trump administration to impose.
This may result in Bangladesh, despite all its internal squabbling and increased anti-India activities, turning to India for help, being its largest and most prosperous neighbour. Pakistan, on the other hand, will only sink further downhill. It is here that India must play its cards.
New Delhi must insist that compromise on India’s security concerns as also protection of minorities in Bangladesh are non-negotiable subjects, prior to provision of aid. While local rhetoric from Islamists may continue, the Government has to act against anti-India institutions. While Dacca may display proximity to Beijing to gain leverage over Delhi, it has no option but to seek Indian financial and humanitarian support, which India should provide under strict conditions.
The author is Major General (Retd)
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