Aid & development, explained.
The aid suspension announced by the Trump administration will end on 19 April, leaving questions for how will aid money be spent and by whom? (Astrid Riecken/Washington Post via Getty Images)
Donald Trump alone can’t decide its future.
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What’s next for USAID?What’s next for USAID?
The fate of the US Agency for International Development (USAID), the premier aid organisation in the US government, hangs in the balance. But it is not Donald Trump alone that can decide its fate, and with it, the assistance provided across the world.
Ultimately, the question of USAID’s future lies with both Congress and the Trump administration. It is important to understand that while American presidents are charged with carrying out foreign assistance activities, behind the scenes, it is Congress that gives the instructions, often with great specificity.
In 1961, to bring together disparate aid agencies that desperately needed coordination and coherence, President John F. Kennedy created USAID by executive order. Kennedy named the agency and provided it with the imprimatur of presidential authority, but his executive order was essentially dictated by Congress in the Foreign Assistance Authorisation Act of 1961. While Congress didn’t give USAID its name, it provided all of the authorities and bureaucratic contours that made the agency a reality.
Even today, with Trump officials dismantling nearly every aid-related thing in sight, Congress’s stamp cannot be ignored. Billions of dollars appropriated and authorised by Congress will be spent on aid programs, and a similar amount will be spent next year. The aid suspension announced by the Trump administration will end on 19 April. The questions for 20 April are: how will that money be spent and by whom?
There are 26 US government agencies and departments that run aid programs and the administration would be wise to consolidate foreign aid agencies as much as is practical.
The State Department held a listening session this month about the aid changes and had three breakout sessions: “Making America Safer”, “Making America Stronger” and “Making America More Prosperous”. It is reasonable to assume that the administration would like to see all programs match at least one of these goals.
“Safer” programs could include spending that mitigates international migration or helps with other efforts to secure America’s borders – humanitarian aid and global health programs may fall into this category. “Stronger” programs could include aid to strategically important nations such as Israel, Egypt and Jordan. “Prosperous” programs could be those that enhance the economies of America’s trading partners. The latter two categories could also include programs that help the United States and its allies compete with a rising China in the developing world.
There is no indication yet as to what bureaucratic structures the Trump administration will seek, but it is a fair guess that more control by the State Department or more streamlined agencies (there are 26 US government agencies and departments that run aid programs) will be at the top of the list.
The administration would be wise to consolidate foreign aid agencies as much as is practical. The number of agencies is so high that it is nearly impossible to run a coherent program across all of them. There is no longer a reasonable need, for example, for the African Development Foundation and the Inter-American Development Foundation to be separate from USAID. A more streamlined bureaucracy would make it easier for the president to direct programs to make America “safer, stronger and more prosperous”.
After an amendment to the Foreign Assistance Authorisation Act in 1998, USAID is now an agency specifically authorised in law, meaning Congress must agree to its dissolution. The Trump administration would be wise to keep USAID and fold other, smaller agencies into it, and then have the Administrator – the top official at the agency – report directly to the Secretary of State. This would allow the United States to keep its dozens of aid missions abroad – a unique asset that gives the US government a strategic advantage on the ground in the battle against Chinese influence.
This structure, simpler and more efficient than today’s incoherent behemoth, would give Trump the responsiveness he wants and give Congress the accountability and transparency it demands.
For more on the dismantling of the US Agency for International Development, listen to this Lowy Institute Development Futures podcast with Lead Economist Roland Rajah, Deputy Director of the Indo-Pacific Development Centre Alexandre Dayant, and Research Associate Grace Stanhope.
About the author
Lester Munson
Lester Munson is a Non-Resident Fellow with the United States Studies Centre, University of Sydney, and is Principal and Managing Director of the International Practice at BGR Group, a leading government relations firm in Washington, DC.
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