ISLAMABAD: After more than seven decades of significant contributions to Pakistan’s development, the United States Agency for International Development (USAID) is winding down its operations in the country. Over its long tenure, USAID has channeled nearly $30 billion into key sectors such as infrastructure, education, healthcare, and governance. However, the agency’s funding freeze, which affects operative projects worth $169 million, has left Pakistan at a crucial juncture. The nation now faces a pivotal question: Will this crisis spur the country toward self-reliance, or will the void left by USAID exacerbate existing economic and social vulnerabilities?
The decision to halt funding has already triggered a wave of concern throughout Pakistan’s development sector. Thousands of workers employed by NGOs and civil society organizations are now at risk of losing their jobs. Aizaz Ahmad Chaudhry, former Foreign Secretary of Pakistan and Ambassador to the United States, emphasized the need for Pakistan to embrace self-sufficiency. “Aid kept us dependent—just as debt is a problem, so is aid. We should see this as an opportunity and take steps toward self-reliance,” Chaudhry remarked in an interview.
USAID’s legacy in Pakistan spans back to 1947, playing a transformative role in key areas such as agriculture, infrastructure, and disaster response. During the 1950s and 60s, the agency revolutionized agriculture by investing in high-yield wheat and rice varieties and supporting vital research institutions like the Faisalabad Agriculture Institute. Major infrastructure projects, including technical assistance for the Tarbela Dam, one of the largest earth-filled dams in the world, also received significant support from USAID. The agency’s involvement in upgrading dams like Mangla and Warsak further bolstered Pakistan’s energy infrastructure.
Following the events of 9/11, USAID’s role in Pakistan expanded, focusing on economic growth, governance, and counterterrorism stability. Key investments included $43.5 million for economic development, $150 million for the Tarbela Dam expansion, and $97 million to complete the Gomal Zam Dam. In addition, the agency spent $17.9 million to improve clean drinking water access and $19.1 million to strengthen electoral processes. Over the years, USAID also trained over 100,000 teachers and invested $20 million in leadership training across various sectors. In times of crisis, such as the 2005 earthquake and the 2010 floods, the agency provided substantial relief, with contributions of $510 million and $676 million, respectively. Most recently, in 2022, USAID allocated $53.1 million in flood assistance.
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Beyond its development contributions, USAID has long been considered a tool of American diplomacy, serving as a soft power instrument for the United States. Zahid Hussain, a senior journalist and author, noted that USAID was pivotal in cultivating goodwill, particularly in developing countries. “USAID was America’s soft image; barely one percent of the U.S. budget was spent on it, but it helped create goodwill in the Third World,” he said.
However, with USAID’s funding cessation, this influence is diminishing, and the impact is already being felt across sectors like healthcare, agriculture, and social services. Rasheed Ch., National Coordinator of the Free and Fair Election Network (FAFEN), explained that organizations providing direct services in areas such as entrepreneurship, health, and agriculture will be the hardest hit. Regions like Thar, Chitral, and Gilgit-Baltistan, where NGO efforts have been vital, are likely to face significant disruptions in social protection initiatives.
With USAID’s withdrawal, Pakistan is now at a crossroads. The departure presents an opportunity for the nation to foster self-reliance, but it also poses a significant challenge. Whether Pakistan can transition from reliance on foreign aid to a more independent path remains to be seen. For now, the future is uncertain, and the country’s next steps will be crucial in shaping its development trajectory.
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