Dismantling of US foreign aid plunges Ukraine into humanitarian and economic crisis

Ukraine is the largest recipient of U.S. humanitarian and economic aid. The country, invaded by Russia in February 2022, has received more than $34 billion in non-military assistance through USAID, the White House agency for international development, in three years of war. In 2023, the last year for which consolidated data is available, the figure was $17.1 billion, while the average received by states assisted by USAID is $565 million. On January 24, President Donald Trump signed an order to freeze all non-military foreign aid from his government and earlier this month, the Trump administration announced its intention to dismantle USAID, the world’s largest development cooperation agency. Both decisions leaves Ukraine facing an unexpected humanitarian and economic crisis.

The political authorities in Kyiv initially felt that an exception would be made for Ukraine. But the passing of the days has confirmed that Trump has made no such provisions. Dozens of NGOs, public administrations, small businesses, and even the United Nations are now treading water. The new U.S. administration has given itself three months to decide what foreign aid will continue.

Washington has ordered no new aid to be provided during this review period. Elon Musk, who Trump has tasked with a drastic reform of the U.S. public administration, has said that both he and the president agree that USAID should be closed down permanently, the tech magnate describing the agency as a “viper’s nest of radical-left marxists who hate America.”

“The United States Agency for International Development has long strayed from its original mission of responsibly advancing American interests abroad, and it is now abundantly clear that significant portions of USAID funding are not aligned with the core national interests of the United States,” reads a statement from the U.S. State Department, whose secretary, Marco Rubio, has been appointed acting administrator of USAID. The agency employs 10,000 people, most of them stationed overseas, and is active in nearly 130 countries. It manages 60% of U.S. foreign assistance: in the fiscal year 2023 alone, it disbursed nearly $44 billion.

Ukraine to focus on critical projects

Ukrainian President Volodymyr Zelenskiy has announced that the government will determine which projects are critical for state funding. The president’s office has indicated that the priority will be rehabilitation programs for soldiers returning from the front. One of the most cited cases in the media is that of the Veteran Hub institution, a reference in the treatment of wounded soldiers, those with psychological after-effects from battle, or those with problems reintegrating into society. Veteran Hub announced that it has had to close its center in Vinnytsia province and that it was terminating its telephone service, although the latter will be restored thanks to a new donation from a Ukrainian technology company.

Go Global is an NGO that offers educational programs to children and teachers affected by the Russian invasion, especially those living near combat zones. Tetiana Kovriga, director of the organization, confirms that three of its projects have been suspended due to Washington’s decision. The main program affected had already served 3,000 students across three years of war.

“Just a few days ago, 150 teenagers living in areas bordering the front were supposed to attend an educational campus in Transcarpathia [the western region of Ukraine furthest from the war] with the support of UCBI [a USAID program],” Kovriga explains. “There we hoped that for the first time in three years they would be able to attend face-to-face classes [in high-risk areas, classes are only held online], interact with their peers, and relax psychologically.” The trip has now been suspended.

“The aid Ukraine has received ranges from USB cables and mattresses for refugees to millions of dollars in contributions to guarantee the electricity grid. We are not aware of how this American aid has shaped our lives,” wrote Vladislav Sodel, a well-known Ukrainian photographer who has been capturing USAID’s work in the country for eight years, on his social media accounts on January 28.

Ukrainian public administrations have also been affected, especially at the municipal level. The eastern town of Izium was severely damaged by the fighting that took place in 2022 to liberate it from Russian occupation. USAID signs can be found on numerous buildings being rebuilt in Izium, as well as on industrial generators supplied by the agency to supply the damaged electricity grid. As is the case in many other Ukrainian localities, food boxes with the USAID seal are distributed daily. This has also been temporarily halted. The deputy mayor of Izium, Volodymyr Matsokin, told state news that they are waiting to receive mobile hot water tanks from USAID. Matsokin did not want to give this newspaper any further details of what assistance has been put on hold because he is still confident that there is “goodwill” to fulfil the contract.

Problems at the UN

Numerous U.N. projects have been affected by Trump’s decision, according to sources from the international organization’s mission in Ukraine who spoke to EL PAÍS. In some cases, such as those linked to the safeguarding of human rights, 80% of the funding came from USAID. U.N. agencies in Ukraine have received an internal communication demanding that no new documents involving U.S. funding be signed. Some NGOs in Ukraine have already notified the United Nations that they have sent their employees home because they will not be able to pay their salaries.

The U.N. mission in Ukraine is currently analyzing which projects are “critical” and on which the lives of beneficiaries depend, in order to maintain them despite the funding problems. Programs linked to children will not be affected, the same sources assure. “We are still evaluating the impact of the U.S. decision on the work of the U.N. in Ukraine,” its spokesperson, Mariia Shaposnikova, told this newspaper.

“We were taken by surprise because this did not happen in 2017, during Trump’s first term,” said other U.N. sources consulted. The director of an NGO who asked to remain anonymous, hoping to resume her activity in the spring, admits “naivety” when reminded that the U.S. president had already warned during his election campaign that he would make this decision: “He’s a politician who you never know if he means what he is saying, or if he’s saying it to satisfy his public, and you err on the side of not taking him seriously.”

USAID is also an important support for the Ukrainian economy. Hundreds of companies on the verge of bankruptcy due to the war have received technology or lines of financing to survive. The effort has been particularly noticeable in the agricultural sector, Ukraine’s most important industry. According to the U.S. government, 15,000 Ukrainian farmers have benefited from USAID assistance in fertilizers, seeds, and machinery.

Catastrophe in the media

Two of the areas where the aid freeze has been most acutely felt are cultural production and the media. More than 100 organizations in these sectors have been left without funds. Most of Ukraine’s small independent media outlets received funding from USAID. Particularly serious cases are Bihus and Slidstvo, two corruption investigative outlets that have stood out in recent years as being instrumental in scrutinizing power. In both digital outlets, U.S. funding stood at more than 80%.

“This has allowed us not to depend on oligarchs, politicians, or the state. Nobody dictates the stories or what to investigate,” the editorial staff of Slidstvo explained in a statement. In a note distributed through social networks, Bihus admitted that its survival depends on a new campaign of donations: “We are sunk, but we are not losing our way. You are saving us. No matter what you think of subsidies, the alternative is to work for the interests of political forces or business groups.”

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