Presented by Food for the Hungry
Presidential legacies are hard to build up. Apparently, though, they’re pretty easy to tear down. Just ask Donald Trump.
Also in today’s edition: The Fourth International Conference on Financing for Development begins today. We have the details on what to expect.
+ Join us tomorrow, July 1, as Susan Reichle of the International Youth Foundation and James Kunder of Kunder/Reali Associates take a temperature check of the State Department-USAID merger — where does it stand? Where is it headed? And what are the implications? Save your spot now.
Double take
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During his first term, U.S. President Donald Trump wasn’t exactly enamored with foreign aid. But he wasn’t as hostile to it as he seems to be during his second stint in office. In fact, the Trump 1.0 administration instituted a raft of aid reforms that earned plaudits in many quarters. But today, that legacy is in tatters, along with USAID.
Last time, Trump’s political appointees oversaw the largest reorganization in USAID’s history — a multiyear process that involved extensive consultation with the U.S. Congress and worked to help countries become more self-reliant, my colleagues Michael Igoe, Elissa Miolene, and Adva Saldinger write in their wide-ranging piece examining the contractions between Trump’s two terms.
And those contradictions abound, from women’s empowerment to labor rights. For example, Trump’s daughter Ivanka spearheaded various gender equality initiatives during her father’s first term. Today, even the word “gender” is radioactive. On labor rights, U.S. grants were funneled to improve workers’ rights in Mexico on the premise that if wages there increased, American workers would be competing on a more level playing field. Those efforts have now been tossed into the dumpster.
Africa has been left in the dust, too. Prosper Africa was launched in a December 2018 speech by then-National Security Adviser John Bolton. It aimed to double trade and investment between the U.S. and Africa. As of December 2024, Prosper Africa reported having helped close 1,852 deals across 49 countries worth $86 billion during the previous four years.
Now, with USAID’s dismantling, Prosper Africa’s operations have been suspended and its staff let go.
Why has Trump changed course so dramatically on foreign aid? There are plenty of theories, but one could simply come down to the chaos and speed with which decisions have been taken, seemingly without any clear analysis or assessments — a rash approach exemplified by the Department of Government Efficiency that was dispatched to gut USAID.
As one long-time foreign assistance expert puts it: “It is a foreign policy run on Red Bull and vodka. You have no idea what these guys are going to come up with next.”
Read more: Another victim of Trump’s aid cuts? His own development legacy (Pro)
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Closing costs
The Trump administration got rid of USAID in large part, it said, to save American taxpayer dollars from being wasted on useless programs. But it turns out that closing an agency also costs taxpayers a pretty penny.
To be precise, it will cost more than $6.4 billion to shut down USAID — including $344 million in litigation fees alone, according to a recent State Department assessment.
“Termination and closeout of contracts, grants and [cooperative agreements] will create legal liabilities and litigation risk that continue for years,” states the assessment, which was obtained by Devex and first reported on by Bloomberg.
On one hand, that’s due to staffing: More than 4,000 direct hire personnel need to be “off-boarded,” a process that will cost $100 million over two years.
On the other hand, that’s due to the agency’s property: Today, USAID owns 87 properties and leases another 16, each of which will need to be sold or transferred to the State Department.
All of those processes — and several others — will require USAID to retain a skeleton staff of 32 people until 2026, the document states. That includes an administrator, human resource director, chief financial officer, and operations director, along with contracting support.
“Hiring for the identified positions supporting legacy functions within USAID should proceed immediately,” states the document. “These positions will aid in the initial offboarding and ensure a smooth transition past the July 1 handover of responsibilities to State and the September 2 completion of the USAID Reduction in Force.”
ICYMI: Congress kick-starts State Department reorganization planning
+ Dive deep into the future of U.S. foreign aid! Devex Senior Reporter Michael Igoe’s special Saturday Devex Pro Insider will bring you insider analysis and answers to the biggest questions for the next few months. This newsletter is exclusively for Devex Pro members.
What is FfD even 4?
The Fourth International Conference on Financing for Development, or FfD4, which starts today, not only comes at a pivotal moment for the cash-strapped global south. It also comes with a prenegotiated outcome document already in hand.
But that doesn’t mean the outcome of what’s known as FfD4 is predetermined. Now comes the hard part for world leaders at the weeklong gathering in Sevilla, Spain: figuring out how to actually implement what’s been decided.
While some of those decisions are vague and watered-down, countries nevertheless came together in the spirit of compromise to hammer them out — despite the U.S. pulling out of talks.
“On balance, a significantly flawed win for multilateralism,” Project Starling wrote in their newsletter. “But a win that most will take in the current environment – and further evidence that the rest of the world is moving forward with or without the United States.”
While one multilateral roadblock is out of the way, countries still face a bumpy road, my colleague Jesse Chase-Lubitz reports, breaking down the major issues on the agenda, including debt, climate, taxes, and reform of multilateral development banks.
Some of those issues were on the agenda a decade ago at the last FfD in Addis Ababa, Ethiopia — as was an outcome document. And that has led to concerns that this global gathering will go down the path of so many like it: lots of talk but little action.
“In both the [outcome document for FfD3 and the draft document for FfD4], there are very few concrete commitments,” says Bodo Ellmers of the Global Policy Forum. “And … when there’s not a clear commitment made, but there’s just a vague declaration of intent on these documents, it’s very difficult to hold the parties to account.”
Read: Defining a decade — what to expect from Financing for Development
+ Today, we’ll be releasing a special newsletter dedicated to FfD4. This comprehensive overview will provide critical insights and analysis. Stay tuned for its arrival soon!
American exceptionalism
As USAID programs shift to the State Department, many (actually, the majority) have already been canceled. So what will happen to the sliver that’s left — especially the lifesaving humanitarian work that was theoretically supposed to be largely spared from USAID’s dismantling? Will the State Department, itself facing major staff and budget cuts, be able to absorb those humanitarian programs, let alone implement them?
It must, argue Jed Meline of Project HOPE and Marcia Wong, former deputy assistant administrator for humanitarian assistance at USAID, in an opinion piece for Devex.
“Whether to stabilize in a fragile setting, help responsibly manage possible migration following a natural disaster, prevent mass starvation, slow the spread of an infectious disease, or lessen disruptions to American business markets and supply chains, having a strong U.S. humanitarian response architecture is securely in America’s interest,” they write, outlining nine ways to ensure that the U.S. maintains robust humanitarian capacity.
Among the ways: deliver assistance rooted in the principles of humanity, impartiality, neutrality, and independence; provide funding with maximum flexibility (so cut out the congressional earmarks); and reestablish a cadre of humanitarian experts within the State Department who can avoid costly, even deadly, mistakes that can result from ad hoc staffing or “learning on the job.”
“There will always be a need for the United States to provide humanitarian assistance,” they write. “This need arises from national security and foreign policy drivers, but also from — yes — a fundamental American moral imperative.”
Opinion: US success in humanitarian response demands a bold vision
Related: Can the US State Department do development? (Pro)
In other news
People in extreme poverty, defined as living on under $3 a day, are concentrated in countries that face instability and conflicts, according to a World Bank report. [The Wall Street Journal]
Narcotic pills have reportedly been found in flour distributed as food aid in Gaza. [Middle East Monitor]
A U.N. special rapporteur has called for the criminalization of spreading disinformation about climate change, as well as banning fossil fuel lobbying and advertising. [The Guardian]
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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.
