Donald Trump’s “chaotic” freeze of foreign aid has left Australian government-funded projects in limbo, putting climate change, health and education initiatives across Asia and the Pacific at risk, experts say.
The Trump administration, with the help of billionaire and unelected “special government employee” Elon Musk and his “department of government efficiency” (Doge), gutted the agency and stopped funding flows.
Musk said he had fed the US agency for international development (USAid) “into the wood chipper”, while there are legal attempts to keep some funding and functions, as well as some exemptions for humanitarian aid.
In the five years to 2022, the US spent almost US$7bn in the Pacific and south-east Asia, funding more than 14,000 projects, according to the latest aid-tracking figures from the Lowy Institute.
USAid and Australia have had an ongoing strategic partnership to improve reading outcomes in poor countries, to empower women, to mitigate the impacts of climate change, to combat human trafficking, HIV and other diseases, and improve water-resource management.
In 2020, Australia’s Department of Foreign Affairs and Trade signed a five-year memorandum of understanding with USAid for development in the Indo-Pacific.
It aims to support the region through investments in health, education, climate- and disaster-resilient infrastructure, economic governance, advancing gender equality, protecting the environment and more.
Other initiatives include a 2023 partnership to improve education in the region, the provision of food and shelter to people in Papua New Guinea who were displaced by violence after the 2022 election and the Mekong Safeguards project, which promotes sustainable infrastructure with environmental and social governance standards across the Mekong, including Cambodia, Laos, Myanmar, Thailand and Vietnam.
Just a few days before Trump’s inauguration, the Australian government, USAid and Unicef announced an early childhood development program in Laos.
A spokesperson for Unicef Australia said theyhoped the funding freeze was temporary.
“The United States has been an important and generous donor throughout our history, their generosity has enabled us to save millions of lives and help children all over the world fulfil their potential … we hope that funding will be resumed as soon as possible,” the spokesperson said.
The Australian Council for International Development (Acfid), the peak body for non-government organisations working in international development and on humanitarian projects, has warned that Australian aid organisations are at risk, which could cause “unnecessary deaths and suffering”.
The co-founder of the Australian International Development Network (AIDN), Mark Cubit, said “it will be up to the private sector and China to pick up the slack”.
“China will bring issues, obviously,” he said.
But Lester Munson, a non-resident senior fellow at the United States Study Centre who used to work for USAid, said the freeze did not necessarily mean China would fill the gap.
He said it was a “chaotic” time, but offered “both a crisis and an opportunity” for Australia if it meant the US would realign its funding to more strategically combat the influence of China.
“Because of this massive revision that’s happening … Australia has a real opportunity to help the US come up with effective programs in the region, in the Indo-Pacific, which line up with US and Australian interests,” he said.
Before Trump won last year’s election, Munson wrote that Australia had “a credible voice with Republicans regarding the China challenge and should encourage a second Trump administration (and Congress) to use foreign aid tools in a pragmatic way in the Pacific and south-east Asia”.
Dr Nicholas Ferns, a research fellow in Monash University’s school of philosophical, historical and Indigenous studies, said the US was most likely to slash funding for communities to build resilience against the impacts of climate change.
“The problem is that anyone who’s working with US agencies and US funding are basically in limbo, because they don’t know if they’re on the ‘to be continued’ list or the ‘to be removed’ list,” he says.
The author of the Lowy Institute’s Pacific Aid Map, Alexandre Dayant, said China had crept ahead of the US to become the second-biggest donor in the Pacific – Australia is the largest, providing between 35% and 40% of the aid.
The US gives most of its foreign aid to three countries – the Marshall Islands, Palau and Micronesia – where the US has a military presence.
Dayant said the freeze was causing “unnecessary disruption to a region that is still struggling to recover from the pandemic”. It would have a bigger impact than people calculated, he said, because even if the US funding stream was part of a bigger consortium, it affected the whole project.
On Wednesday the defence minister, Richard Marles, said Australia had “continually advocated to the US, over many years, the need for it to play a part in the Pacific” and declined to say whether he had raised the issue when he was in Washington last week.
The foreign affairs department did not respond when asked how many projects were affected, nor did the government say whether there was a plan to deal with the USAid situation.
