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Can USAID and the State Department become one big happy family? Or are they better off divorced from each other?
Also in today’s edition: As the U.S. retreats from aid, will Germany take the mantle? Initial signs don’t look promising.
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A half-baked plan?
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I often wonder if we’re still going to call it USAID once the agency is folded into the State Department. After all, the Trump administration wants to “abolish” USAID as an independent entity. And barring some unforeseen congressional uprising or judicial upset, odds are the subsummation is a done deal.
But is it a smart deal? A stupid one? Or simply a rushed deal, albeit with some strategic value?
A recent Devex Pro briefing tangled with these questions following the administration’s release of its plan to merge USAID’s functions and programs into the State Department. Among other things, USAID’s bureaus for humanitarian assistance and global health would be “realigned” to relevant State Department entities — and all other USAID programs that duplicate the work of the State Department will be eliminated.
While providing some long-sought-after answers, the plan also raised a slew of concerns and questions.
For one thing, opponents argue that diplomacy and development are different skill sets. In fact, the Foreign Assistance Act of 1973 made it clear that USAID needed more independence from the State Department.
“The functions of the two organizations of diplomacy and development were so different, and having people in the same office created tensions, lots of disagreements, and inability for each to do their operations properly that they ended that experiment,” says panelist George Ingram of the Brookings Institution.
Others, though, see the rationale behind the move but question its implementation.
Richard Crespin, a senior associate at the Center for Strategic and International Studies and CEO of CollaborateUp, says many in the Trump administration felt like foreign policy and foreign assistance were out of sync — and they needed to be brought back into alignment to serve America’s interests. But he adds that the “how” of the merger has yet to be formulated.
“It was overly simplistic,” says Marcia Wong, the former deputy assistant administrator of USAID’s humanitarian assistance bureau, of the plan. “I don't know if that gives me any better confidence that this quote, merger — or what I call subsuming — of USAID is going to be a well-thought-through and executed process.”
It also begs the question whether this “merger” is ultimately just a front to eliminate U.S. foreign assistance entirely, my colleague Elissa Miolene writes.
“We don’t know what they’re going to do with these programs that have been canceled and whether or not any of them are going to be revived or re-competed,” says Ingram. “There’s just no indication as to what the plan is.”
Read: USAID's merger with the State Department — the pros, cons, and questions (Pro)
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Survival of the fittest
The administration’s merger plan did offer some details, but it mostly opted for broad strokes over specifics. So Devex’s data team has, as always, come to the rescue.
As the development community awaits clarity on how U.S. foreign assistance will be restructured under the absorption of USAID into the State Department, my colleague Raquel Alcega examined which parts of the agency were hit hardest by recent award terminations. The analysis offers early signals of which offices may face the sharpest downsizing or potentially disappear altogether.
For instance, USAID’s planning, learning, and resource management office has seen nearly 87% of its potential portfolio vanish. The Global Development Lab, once a flagship hub for innovation, lost over 84% of its award ceilings. And USAID field missions such as Bangladesh, Dominican Republic, West Africa regional, and Nepal have seen nearly half their portfolios disappear — a significant shock to on-the-ground operations.
Read: Which USAID offices saw the most cuts? (Pro)
🎧 Listen: For the latest episode of our podcast series, Elissa joins Devex’s Adva Saldinger and David Ainsworth to discuss the confusion over USAID cuts and other top global development stories from the week.
In the line of fire
It’s not just USAID on the verge of extinction. Aid-adjacent agencies are also in the crosshairs of the administration, which has wasted no time dismantling the U.S. African Development Foundation and its sister agency, the Inter-American Foundation.
A court ruled that Peter Marocco — who spearheaded the elimination effort — did not have the authority to dissolve IAF, but that didn’t stop him from gutting USADF, canceling hundreds of awards — and terminating dozens of staff — at one of the government’s smallest agencies.
Litigation to preserve USADF is ongoing, Elissa writes, but that’s cold comfort to some former staffers.
“It takes five minutes to cancel a grant, but potentially months to reverse it,” says one USADF staff member. “I am hoping the Judge will rule in our favor, and if he does, what will we have to come back to? Irreparable damage has already been made.”
Read: Trump admin cuts hundreds of grants at USADF despite legal limbo
Germany to the rescue? Not quite
For those hoping the world’s second-biggest donor might step in to fill the shoes of the U.S., the world’s erstwhile biggest donor, don’t hold your breath.
That’s because Germany’s next centrist government officially announced it is planning foreign aid cuts, my colleague Jesse Chase-Lubitz writes.
The extent of the cuts remains unclear, but a draft budget includes an 8% cut to the country’s primary aid agency, the Federal Ministry for Economic Cooperation and Development, or BMZ.
“It would be short-sighted to make further cuts to development budgets, as is currently planned,” United Nations Industrial Development Organization Director-General Gerd Müller, who served as the minister of economic cooperation and development under former German Chancellor Angela Merkel, tells Jesse. “If the world spends 2,200 billion per year on armaments, then it should also be possible to invest 200 billion in development.”
In better news for BMZ, the agency narrowly escaped a merger with the German Foreign Ministry. Müller said that keeping BMZ independent is “encouraging” and shows that Germany is not following the same trajectory set by the “USA’s withdrawal from development and economic cooperation.”
Read: Germany's coalition contract includes new cuts to aid budget
Until the end of time?
The U.S. government’s global HIV/AIDS program, known as PEPFAR, has left an indelible mark on the world, saving more than 25 million lives since its founding in 2003. But was this global health mainstay meant to stay on the scene forever?
“I think all of us here would agree that PEPFAR was never meant to go forever, right?” said U.S. Rep. Mario Díaz-Balart, a Republican from Florida, at a recent congressional hearing. “We need to make decisions, and financially, we cannot continue spending at current rates for years to come.”
Díaz-Balart found support from a somewhat unlikely ally: Mark Dybul, who ran both PEPFAR and the Global Fund to Fight AIDS, Tuberculosis and Malaria, agreed the two programs cannot and should not last forever.
But it’s a question of timing, he cautioned.
“The choice is clear. Do we have a well planned, structured, successful transition that helps make America safer, stronger and more prosperous, or do we retreat too quickly and chaotically, squandering some of America's greatest achievements, risking the lives of millions in the near term, a resurgence of drug resistant virus and losing of the pandemic over time and seeding the field to competitors and adversaries?” he asked. “The choice is ours to make.”
Read: PEPFAR at crossroads — lawmakers debate future of global HIV program
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In other news
Eight people, including five children, have died on their way to seek cholera treatment in South Sudan, as local health services have shut down due to U.S. aid cuts. [Reuters]
Pakistan has warned it will expel Afghan refugees and asylum-seekers awaiting resettlement in third countries if they aren’t relocated by the end of the month. [AP]
Will McCallum, a co-executive director at Greenpeace UK, and five other individuals have been arrested for pouring red dye into a pond at the U.S. embassy in London. [BBC]
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About the author
Anna Gawel
Anna Gawel is the Managing Editor of Devex. She previously worked as the managing editor of The Washington Diplomat, the flagship publication of D.C.’s diplomatic community. She’s had hundreds of articles published on world affairs, U.S. foreign policy, politics, security, trade, travel and the arts on topics ranging from the impact of State Department budget cuts to Caribbean efforts to fight climate change. She was also a broadcast producer and digital editor at WTOP News and host of the Global 360 podcast. She holds a journalism degree from the University of Maryland in College Park.
