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The fallout of US foreign aid cuts on the Arab World and South Asia

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On January 20, 2025, US President Donald Trump issued an executive order suspending all USAID and State Department-funded projects, amounting to $60 billion, for 90 days. The decision aimed to reassess the effectiveness of foreign aid and align it with the administration’s strategic priorities. As a result, nearly 10,000 foreign aid grants and contracts have been abruptly terminated, sending economic and humanitarian shockwaves across countries that have long relied on American assistance. This move has particularly affected nations in the Middle East, North Africa (MENA), and South Asia, raising concerns over regional stability, economic sustainability, and geopolitical realignments.

The United States has historically been a key financial supporter of many MENA countries, providing aid to sustain fragile economies, strengthen security frameworks, and fund humanitarian projects. In 2023 alone, Jordan and Egypt ranked among the top beneficiaries, receiving $1.6 billion and $1.5 billion, respectively. However, with the sudden reduction in US aid, these nations are now scrambling to find alternative economic partners.

Jordan, considered one of the most politically stable countries in the region, heavily relies on US assistance to support its economy and refugee programs. With over 1.3 million Syrian refugees residing in the country, American aid has been essential in funding healthcare, education, and employment initiatives. The aid suspension has put these programs at risk, forcing Jordan to seek emergency assistance from Gulf nations and international lenders.

Egypt has long been a major recipient of US military and economic assistance. American aid has funded critical infrastructure projects and helped maintain the country’s defense capabilities. With Washington’s funding in limbo, Cairo has turned to China and the Gulf states to fill the financial gap. However, Gulf nations, facing........

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