Estimated time of reading: ~ 6 minutes

The suspension of the U.S. Agency for International Development (USAID) has sent shockwaves through the global aid community, disrupting humanitarian and development programs in over 120 countries. USAID, which managed approximately $43.8 billion in aid in 2023, played a crucial role in funding initiatives related to health, education, economic development, and democracy promotion. Its abrupt halt has already led to the closure of key projects, particularly in vulnerable regions such as Africa, LATAM and Eastern Europe, where communities relied on this assistance for basic services. In Malawi, the sudden freeze in funding has left hospitals without essential medicines and food supplies, while in Eastern Europe, support for democratic institutions and civil society organizations is now at risk. This shift also carries significant geopolitical consequences. USAID has been instrumental in promoting democracy worldwide, investing an estimated $3.2 billion annually in electoral support, governance reforms, and independent media. Without these programs, authoritarian regimes could find it easier to consolidate power, particularly in fragile democracies. At the same time, the vacuum left by USAID opens the door for China, which has been expanding its global footprint through its Belt and Road Initiative and China Aid programs. Unlike Western donors, China’s development assistance often comes in the form of loans and infrastructure projects without political conditions. This could reshape economic and political landscapes in regions that previously benefited from U.S. support, weakening Western influence. The impact of USAID’s suspension extends beyond governance. It could also lead to increased instability, triggering economic crises, conflicts, and forced migration. Countries that relied on U.S. aid to maintain social services and economic development may face a rise in unemployment and poverty, pushing more people to migrate in search of better opportunities. The European Union, which already manages significant migration flows, could experience heightened pressures at its borders. Furthermore, the reduction of U.S. involvement in post-conflict reconstruction efforts in Ukraine, where over $4.9 billion in aid had been allocated since 2022, means the EU may need to shoulder an even greater financial and strategic burden to support the country’s recovery. While USAID’s withdrawal presents a challenge, it also offers the EU an opportunity to step up as the leading global force in development cooperation. The European Union and its member states have long been the largest donors of Official Development Assistance, providing $91.8 billion in 2022, which accounted for 42% of global aid. In comparison, U.S. foreign aid through USAID and other agencies amounted to $71.9 billion in the same year. However, the EU’s ability to maintain its leadership is under threat, as budgetary cuts of €2 billion between 2025 and 2027 could limit its capacity to compensate for the loss of U.S. funding. Additionally, some European governments are also scaling back their commitments, with France alone announcing a €1.3 billion reduction in its development budget for 2025. In this context, the EU must act decisively to reinforce its global presence. Increasing financial support for humanitarian and development programs, particularly in regions most affected by USAID’s suspension, will be crucial. Strengthening partnerships with non-governmental organizations and civil society actors can help ensure continuity in key projects, while closer coordination with allies such as Canada, Japan, and Australia could reinforce a collective Western approach to development assistance. Investments in long-term projects focusing on sustainable infrastructure, green energy, and digital connectivity could provide recipient countries with more resilient and self-sufficient economies, reducing dependency on external aid over time. Undoubtedly, the sudden end of USAID marks a major shift in the international aid landscape. If the European Union rises to the occasion, it can cement its status as the world’s primary development partner, ensuring that global cooperation continues to be a force for stability, democracy, and progress. By stepping up in this moment of uncertainty, the EU has the chance to define a new era of international assistance, one that reflects its values and strategic interests while filling the void left by the United States.

Written by: Cristina Ceccarelli