Ripple effects of US aid cuts on our development sector
Musharraf Tansen | Source : Daily Observer, 04 February 2025
Concluding part Climate Resilience - A Compromised Future: As one of the most climate-vulnerable nations in the world, Bangladesh relies heavily on international support to build resilience against climate-induced challenges such as floods, cyclones, and rising sea levels. U.S. aid has been pivotal in funding climate adaptation projects, including the construction of cyclone shelters, the development of early warning systems, and the promotion of sustainable agricultural practices.
Without this support, the country's ability to prepare for and respond to natural disasters would be significantly weakened. Fewer resources for disaster preparedness would leave communities less equipped to withstand extreme weather events, resulting in higher casualties and economic losses.
Poverty and Livelihoods - An Escalation of Vulnerabilities: Poverty alleviation has been at the heart of Bangladesh's development agenda, with U.S.-funded programs making a tangible impact in improving the lives of millions. Initiatives such as microfinance, social safety nets, and livelihood programs have empowered impoverished communities, enabling them to achieve economic self-sufficiency and break the cycle of poverty.
A withdrawal of U.S. aid would jeopardize these gains, potentially pushing vulnerable populations deeper into poverty. Poverty-focused programs that provide essential resources and opportunities for economic empowerment might see drastic reductions in funding. This would disproportionately affect marginalized communities, including ethnic minorities and people with disabilities, who already face significant barriers to accessing basic services.
Humanitarian Crises - Challenges for the Rohingya Response: Bangladesh is currently host to over 900,000 Rohingya refugees, most of whom reside in overcrowded camps in the Cox's Bazar. U.S. aid has been a cornerstone of the international response to this crisis, funding critical services such as food aid, shelter, healthcare, and education for refugees.A withdrawal of U.S. support would have profound consequences for both the refugees and the host communities. Local populations, already struggling with limited resources, would face additional pressures as critical services in the camps are scaled back or eliminated. This could lead to heightened social tensions between refugees and host communities, further destabilizing the region.
Systemic Impacts on the Development Sector: Beyond the specific impacts on key sectors, the development sector in Bangladesh as a whole would face significant systemic repercussions from a reduction or cessation of U.S. aid. These overarching challenges would hinder the capacity and sustainability of organizations working to address the country's most pressing issues.
One of the most immediate and visible consequences would be the reduced capacity of NGOs, many of which rely heavily on U.S. funding to implement development projects. A sudden withdrawal of aid would force these organizations to scale back their operations significantly. This could lead to layoffs of skilled staff, the discontinuation of vital community programs, and the abandonment of projects that are in progress but require sustained financial support to achieve their goals. The loss of these programs would disproportionately affect vulnerable populations, further exacerbating socio-economic inequalities.
In addition to shrinking operations, the development sector would also face a critical loss of technical expertise. U.S. aid is not limited to financial assistance; it often includes capacity-building components that provide training and technical support to local organizations. These initiatives help NGOs and community groups build their capabilities in areas such as program design, monitoring, and evaluation. Without access to this expertise, the ability of the development sector to implement effective, evidence-based interventions would be severely compromised, limiting its overall impact.
Another systemic challenge would be the widening of funding gaps for innovation. Many groundbreaking solutions to development challenges, such as digital health platforms, climate-smart agricultural technologies, and mobile-based education tools, have been made possible through seed funding from donors like USAID. These innovations not only address immediate needs but also pave the way for long-term, sustainable development. A decline in U.S. aid would stifle such innovation, leaving critical gaps in service delivery and hindering progress in adopting cutting-edge solutions.
Mitigating the Risks: While the potential impacts of U.S. aid cuts are significant, Bangladesh can adopt proactive strategies to mitigate the risks and safeguard its development progress. A critical first step is diversifying funding sources. Bangladesh must look beyond traditional donor countries to forge partnerships with non-traditional donors, philanthropic organizations, and the private sector. South-South cooperation, particularly with countries that share similar development challenges, can also provide valuable resources, expertise, and innovative solutions. Strengthening these partnerships will help create a more resilient funding landscape, reducing dependency on any single donor.
Simultaneously, the government should prioritize strengthening domestic resource mobilization. By increasing tax revenues, improving public financial management, and reducing inefficiencies in public spending, Bangladesh can enhance its capacity to fund key development initiatives independently. Greater domestic investment in sectors such as education, healthcare, and social protection will not only reduce reliance on foreign aid but also promote long-term sustainability in addressing the country's development challenges.
Another critical pathway involves enhancing local ownership of development programs. Building the capacity of local organizations to design, implement, and manage initiatives ensures resilience and sustainability, even in the face of fluctuating international aid. Investing in the development of homegrown expertise and empowering community-based organizations can create a more self-reliant and adaptable development sector.
Finally, robust advocacy and diplomacy will play a vital role in ensuring continued support from the international community. Bangladesh must actively engage with U.S. policymakers and other stakeholders to highlight the tangible impacts of aid on the country's development progress. Evidence-based narratives that showcase success stories in areas like poverty alleviation, healthcare, and climate resilience can strengthen the case for sustained U.S. investment. Additionally, leveraging regional and global platforms to advocate for equitable and predictable development assistance can help reinforce Bangladesh's position as a deserving recipient of international support.
A Shared Responsibility: Since the prospect of U.S. aid cuts poses a significant threat to Bangladesh's development sector, with far-reaching implications for vulnerable populations and the country's overall progress, this scenario also underscores the importance of building a resilient, self-reliant development ecosystem that can withstand external shocks.For the United States, continued engagement in Bangladesh is not merely an act of charity but a strategic investment in global stability, prosperity, and shared values. For Bangladesh, the challenge lies in leveraging existing resources, diversifying funding streams, and nurturing local ownership to sustain its development momentum.
In a world increasingly interconnected by shared challenges-be it climate change, pandemics, or migration-development cooperation remains a cornerstone of global solidarity. The partnership between Bangladesh and the United States, built over decades, must continue to evolve and adapt to ensure a brighter, more resilient future for all.
The writer is a Development Analyst and former Country Representative of Malala Fund