The foreign ministry's statement that further decisions will be made after a 90-day review, programs including USAID and MCC are also in confusion
US President Donald Trump, who has been making dramatic decisions one after another, has issued an order to stop all foreign aid. According to the US State Department, it was decided to suspend foreign development grants immediately after Trump returned to the White House and it will be canceled after a 90-day review.
It is mentioned in the directive that "since it is impossible for the US government to get all and sufficient information to determine whether or not foreign aid policies and interests are effective, all grants in accordance with President Trump's foreign policy have been suspended." The directive states that there will be a comprehensive review of foreign aid and that it will ensure that it meets President Trump's foreign policy goals.
Earlier, Secretary of State Rubio said that US spending abroad should ensure that America is made 'stronger, safer, or more prosperous'. Aid for emergency food aid as well as military funding for Israel and Egypt has not been stopped. The directive, which came at the time of the cease-fire between Israel and Hamas, has seen humanitarian aid in the Gaza Strip and the famine crisis in various countries including Sudan more dire.
The new directive of the Ministry of Foreign Affairs is seen to have a big impact on foreign programs funded by the US. The US is the world's largest donor of foreign development aid. The United States provided $68 billion in international aid in 2023. Out of the amount given to 176 countries, 88 percent is financial assistance and 12 percent is military assistance, according to "Foreign Assistance.gov". On the basis of grants, Nepal is at the 16th position.
A five-year strategy agreement has been reached between the Ministry of Finance and the American Assistance Mission (USAID) regarding the use of US aid. The last agreement was made on May 15, 2022. At that time, there was an agreement for a grant of 659 million US dollars (79 billion 71 million rupees) for five years, according to the International Financial Aid Coordination Division of the Ministry of Finance.
The United States has been providing grants to Nepal through budget (budgetary) and non-budgetary (non-budgetary) means. Most grants come through USAID. Grants coming through the Millennium Challenge Corporation (MCC) for infrastructure related programs in Nepal are separate.
Grants received from America are being used in Nepal in the fields of good governance, human development, disaster protection and preparedness, infrastructure construction, and education. Under the health and population sector, US grants are also being used in areas such as maternal and child health and family planning, HIV AIDS, water supply and sanitation, and basic health. US grants are also being spent in the country's financial reform and administration reform. A large amount of US aid is being used in agricultural policy and administration management towards the agricultural sector.
The programs already agreed between the government and the government will not be affected. It is not possible to say about the new program now," said Dhaniram Sharma, the head of the division. "Only after the official information about the latest decision of the American government comes, it will be clear whether the assistance Nepal is getting will be affected/not.
An official of the Prime Minister's Office commented that Trump's latest order may directly affect the projects that were being carried out through agreements. "According to the information received so far, it cannot be ruled out that all the programs, including the MCC, which are being operated with American support, will be affected," said the official.
Former Secretary to the Government Kewal Bhandari said that it is too early to assess whether the US decision to stop foreign aid will have an impact on Nepal. America is our big development partner. He has been giving both budgetary and non-budgetary grants. Most of the non-budgetary grants are being spent through various organizations," he said.
It seems that America's latest policy is not to support gender equality, climate change, and health. Bhandari said that because of his grant program in these areas in Nepal, they may be affected. USAID also has a program in the field of climate change. "President Trump has said that he will reduce his role in the climate sector," he said.
Bhandari believes that the Trump administration will not back down to maintain an influential presence on the world stage. "Through foreign aid activities, the American presence in countries around the world is intensive and also has a great contribution to the social and economic activities of the countries receiving aid," he said, "I don't think the Trump administration will back down to maintain an influential presence on the world stage."
Trump Arjun Karki, who was the ambassador to the United States in the previous term, considers it natural for the United States to review the ongoing aid programs and plans. "As far as I understand, the aid programs that are in process for 90 days after President Trump takes office have been suspended for the necessary review and study. It is my understanding that the programs currently in operation are not targeted decisions," he said. "America is supporting hundreds of countries and thousands of projects.
According to 'Foreign Assistance.GOV', in 2023, Ukraine received the most aid from the US. Ukraine received a grant worth 17 billion 1937 million 10 thousand 403 US dollars. 16 billion 93 million 12 million 20 thousand 446 dollars of economic and 26 billion 24 million 89 thousand 957 US dollars of military aid given to Ukraine. Ukraine, which is at war with Russia, will also be affected by the new directive. Previously, the Joe Biden administration had provided billions of dollars worth of arms to Ukraine.
Israel received 3.3 billion 28 million 60 thousand in second place and Jordan received 1 billion 68 million 68 million 2 thousand in aid from the United States. The US gave 1.5 billion 36 lakh 9 thousand to Egypt, 1.45 billion 73 lakh 74 thousand to Ethiopia, 1.18 billion 10 million 33 thousand to Somalia, 1.1 billion 199 million 47 thousand to Nigeria, 99 million 4 lakh 56 thousand to Afghanistan. 8865 million 36 thousand and 84 million 63 million 3 thousand was provided to Kenya.
President Trump has announced that he will withdraw the United States from the World Health Organization (WHO) and the Climate Agreement (Paris Agreement). This year's program in Nepal will not be affected by the American decision to leave WHO. Roshan Pokharel said.
Although there is a problem in WHO's budget due to America's decision, this year's program will not be affected. Most of this year's programs have gone to the implementation stage," he said. "It is not possible to say what the impact will be on next year's programs." WHO is supporting health-related policy reforms under the five-year Country Cooperation Strategy (CCS), which began in 2023.
Although the US has announced that it will not support the Global Fund and other funds, health officials say that it will not have much impact in Nepal. The program does not stop if one country stops the support, support is taken from other donor agencies and social organizations. The same thing happened when vaccines were provided to developing countries including Nepal during the Covid epidemic," said an official of the Ministry of Health.
