The future of the US Agency for International Development, or USAID, is looking increasingly bleak amid shutdown threats from President Donald Trump's new administration. The crackdown has already affected thousands of aid workers, non-profit organisations and private sector contractors – and jeopardises millions of aid dollars to the Middle East.
Secretary of State Marco Rubio announced on Monday that he is now the acting USAID administrator, after a weekend blitz in which Mr Trump's billionaire tech ally Elon Musk declared the administration had “spent the weekend feeding USAID into the wood chipper”.
The aid agency, considered a vital arm of US global soft power, was established through Congress and it is considered illegal to dismantle it through executive authority.
The legally dubious developments could have unique implications for the Middle East – the region is the largest cumulative recipient of US aid dollars – despite recent attempts at scaling down engagement.
“The leaders of the region have always looked to the United States for leadership … particularly on the humanitarian side,” Merissa Khurma, director of the Middle East Programme at the Wilson Centre, told The National.
USAID has played an important role in ensuring there are “communities that are being tended to, that people are not going starving in places like Sudan or in Gaza, or other parts of the region”, Ms Khurma said. "So it is going to be certainly a very challenging time ahead for those who are working in this sector.”
Most of the funding goes to Israel, Egypt and Jordan, although millions of dollars go to an array of projects across the entire region.
USAID's regional work, according to congressional assessments for the fiscal year 2024, includes an estimated $6 billion in humanitarian aid for Yemen since 2010, $1 billion in humanitarian funding to Lebanon since 2020, and $3.5 billion in humanitarian aid to Iraq “for food, improved sanitation and hygiene, and other assistance for displaced and vulnerable communities” since 2014.
Mr Rubio, joined by a growing chorus of Republicans, is pushing for reforms, complaining that only “10 cents on the dollar” of US aid goes towards actual development projects. The Secretary of State described the agency as “completely unresponsive” with a history of “ignoring” US interests.
Mr Rubio has sent a letter to House foreign affairs committee chairman Brian Mast informing Congress that a review of USAID’s foreign assistance is under way, with a possible "reorganisation” of the agency ahead.
Mr Mast – the Republican head of the committee, which has oversight authority for the State Department and USAID – said on Sunday he would be “absolutely for” dismantling the aid agency, as improving aid efficiency will require “restructuring”.
But Democrats say cuts to the agency will weaken a key pillar of Washington's national security apparatus.
“Instability from starvation and disease will visit us in the United States of America,” Senator Brian Schatz told pro-USAID demonstrators at a Monday news conference. "In the last 10 days, Donald Trump has done more to destabilise things across the planet than perhaps any other president in recent memory.”
Brian Katulis, senior fellow for US foreign policy at Washington's Middle East Institute, said the aid freeze showed “incompetence” that “has made the Trump administration look weak and unclear about what it is trying to achieve”.
USAID was established by Congress in the 1961 Foreign Assistance Act as an independent agency led by an administrator. The agency is designed to work in co-ordination with, and not directly under, the State Department, which is in charge of enacting US foreign policy.
Mr Trump's executive order on “re-evaluating and realigning” US foreign aid, and a subsequent memo from Mr Rubio, sowed confusion and panic among aid workers.
Last week, in an attempt to clear up what services would still receive funding, Mr Rubio granted a waiver for “life-saving humanitarian assistance”, which the State Department described as “core, life-saving medicine, medical services, food, shelter and subsistence assistance, as well as supplies and reasonable administrative costs as necessary to deliver such assistance”.
Mr Katulis, who spoke to The National on travel between Oman and the UAE for meetings with senior regional officials, said the decision “looks both amateurish and dangerous” to many leaders in the Middle East.
“Depending how the various moves are implemented in practice, it would eliminate key avenues for America to shape outcomes in places like Syria and Palestine,” he said.
The spending freeze, and possible shutdown of USAID, comes at a particularly sensitive moment for Syria and Washington's engagement with the new government in Damascus after the fall of Bashar Al Assad's regime.
Washington has historically been the largest source of humanitarian support for Syria during its decade-long civil war, allocating $16.7 billion in humanitarian funds “using existing funding from global humanitarian accounts and some reprogrammed funding”, according to a Congressional Research Service report.
The recent measures caused chaos, for example, when salaries were frozen for many of the prison and camp guards responsible for securing ISIS militants and their families at Al Hol and Al Roj camps in north-east Syria. The guards left work until Mr Rubio issued a waiver.
Congressman Johnny Olszewski, speaking alongside fellow Democrats at a Monday news conference outside the closed USAID headquarters, said the development highlights how the aid freeze is “jeopardising our safety here at home”.
“Prisoner guards overseeing thousands of ISIS combatants walked off the job. This is real life. This is serious and this is dangerous,” said Mr Olszewski.
Mouaz Moustafa, executive director of the Syrian Emergency Task Force, argues the cuts “are bad for the region, but Syria is affected more than others because of the war that it went through, and because of the lack of support in the past from the United Nations”.
Mr Moustafa told The National that organisations such as the White Helmets rely on USAID “to provide essential services, many of them life saving services for civilian population that's endured a horrific war, terrible crimes and displacement, and many now live under poverty”.
Opportunities for change?
In countries including Jordan, where Washington is the single largest donor of humanitarian assistance, aid cuts have already been “challenging”, said Ms Khurma, because Jordan is “very much dependent” on that economic aid.
Washington provided more than $1.65 billion in 2021, including more than $1.197 billion allocated to Jordan through USAID in the fiscal year budget. And in 2022, Washington and Amman signed an agreement for $1.45 billion in annual economic and military aid.
The freeze means that jobs in countries such as Jordan are on the line.
Ms Khurma, who worked on several USAID-funded projects in Jordan, said some “were very effective, and there were others that were not so effective, and that's normal”.
“But I think a lot of people are very worried, especially given that there will be many jobs lost,” she added.
The threats of a USAID shutdown also comes after Jordan has worked to decrease its dependency on the US. Ms Khurma believes there is opportunity in the long term for Amman to attract “foreign direct invest for different types of projects”.
But there is still much uncertainty over how the Trump administration is dealing with these shifts.
“If the plan is to tuck USAID, or at least what USAID does, into the State Department, there are other models around the world that have that system in Europe," Ms Khurma said. "Now the question is, are we learning from these experiences, or is this just an attempt to cut aid out in pursuit of a more isolationist agenda?”
A former Biden administration appointment to USAID called the way in which the Trump administration is folding the agency into the State Department “outrageous and infuriating and totally inappropriate.”
“It's OK to make policy changes,” the person told The National. “But to treat people this way … is very offensive and it didn't have to be this way.”
They said the Middle East could feel the sting of the USAID funding freeze.
“To leave the Middle East hanging in this moment when things are very much in flux across Gaza and Yemen and Syria and so many other parts of the area – it's really an issue that people don't fully grasp.”
US on the world stage
Mr Musk oversees the new Department of Government Efficiency, or “Doge,” and said President Trump was prepared to shutdown the agency – as hundreds of employees and contractors faced lay-offs.
A former USAID global health contractor told The National that their job was abruptly terminated through a stop-work order after more than 11 years with agency, followed by a lay-off letter on January 28. The contractor said about 400 other people in a similar position were dismissed without any sort of severance package.
“There are people who are providing humanitarian relief, life-saving, people-will-die-tomorrow relief, who have gotten stop-work orders and defied them because they're not going to watch people die,” the former contractor said, describing the situation as “traumatic”.
As the Trump administration also increases hostility towards the UN, a representative from the world body told The National that “USAID is a critical and generous partner for the United Nations and humanitarian in development work".
Mr Trump and his allies have long complained that Washington's foreign partners do not do enough to contribute to US interests and alliances, including antagonism towards Nato.
But Mr Katulis notes the USAID cuts could exacerbate that problem: “America will have a tougher time getting others to pull their weight if we're being seen as in retreat, and it may very likely create an opening for geopolitical competitors like China to fill the space left behind.
“One senior Gulf official put it bluntly to me yesterday: 'The America we once knew seems lost and doesn't seem to remember what it once stood for'.
“These are hardly voices that are enthusiastic about democracy – they see the steps Trump is taking against America's public servants as an attack on America itself."
Thomas Watkins and Adla Massoud contributed to this report.
