Opinion: As foreign aid recedes, Asia must lead its own development future

Gratitude may seem like an odd response to a crisis. Much has been said about the chaos caused by the shutdown of USAID since President Donald Trump took office in early 2025. Headlines paint both a picture of wasted resources and of devastation — halted critical programs, organizational closures, job losses, and millions of vulnerable lives left hanging in the balance. Yet in the midst of lamenting over what has been lost, we have overlooked an important truth: U.S. foreign aid has been critical in transforming lives. For all the disruption its withdrawal has so far caused, we must also remember how much good it has done. Since the 1960s, U.S. development assistance has played a quiet but pivotal role in shaping Asia’s progress. For instance, USAID was instrumental in helping eradicate polio in India and Bangladesh, reducing maternal and child mortality in Indonesia, and strengthening Asia’s capacity to detect and respond to emerging infectious diseases like SARS and COVID-19. It has also consistently funded politically sensitive, so-called unfundable issues that few others dare to touch — from human rights to press freedom to HIV treatment and refugee support. These investments have had a profound impact on civil society in Asia and have helped to change millions of lives for the better. This aid has never been perfect, and has often been criticized for being inefficient, overly bureaucratic, or misaligned with local needs. But it is a gift — and gifts, however flawed, deserve gratitude. Yet we must also recognize that aid is not a given; and for any act of discretionary generosity, it can be withheld or withdrawn. The hard truth is that foreign aid has always been both a gift and a strategic investment — one that can be reshaped or redirected. A shrinking pool of international aid The withdrawal of U.S. foreign assistance is not an isolated event. It reflects a larger trend of shrinking aid budgets across traditional donor countries such as the United Kingdom, Germany, Sweden, and the Netherlands — who have all recently announced cuts to foreign assistance. The U.S. is the latest to join the fray, and may worryingly encourage others such as Japan to prioritize domestic concerns over those abroad. The funding withdrawal likely marks a point of no return — an irrevocable shift in the global funding landscape. Rather than mourning the decline of foreign aid, we must seize this opportunity to build something stronger: A locally driven model of philanthropy that works in tandem with government and the private sector, prioritizes community needs, and is unbeholden to foreign policy agendas — taking the future of our region into our own hands. Implications for Asia That is not to say that the funding withdrawal is without significant consequences for Asia. In a recent survey conducted by Asia Philanthropy Circle and its sister organization Asia Community Foundation, some 367 respondents across 20 geographies reported a collective annual loss of $275 million in immediate funding. Worryingly, they expect to be able to replace only $2 million within the next year from alternative sources — leaving over 3 million lives at risk as critical sectors such as health care, education, and civil society face severe disruptions. Building a more resilient ecosystem With international aid in decline, Asia’s philanthropists, funders, and donors face a critical challenge: Not only to address immediate needs, but to rethink how we can build a more resilient, self-reliant philanthropic ecosystem. This demands some hard questions. Are we prepared to take ownership of our own region’s development? What is holding us back from stepping into a leadership role? How can we better support local organizations to reduce their reliance on foreign aid? And most crucially, how can we build trust and collaboration in Asia’s fragmented, nascent social impact landscape? Following the release of our survey, APC and ACF convened funders in the region to explore solutions. Encouragingly, it was clear that many were ready and willing to act — even if the “how” was less clear. Some, especially those who work closely on the ground, are already moving quickly — providing bridging support to grantees in need, easing funding restrictions and reporting requirements, and putting in place plans to help organizations strengthen operational and fundraising capabilities. I urge fellow funders to go further. As competition for new funding intensifies, funders must work together to maximize the chances for charities to survive. We must also invest in public goods that will strengthen the sector as a whole. We must coordinate and collaborate on our funding to reduce work for already struggling organizations. We must also share ground intelligence to ensure resources are directed where they are most needed. Most importantly, we should actively connect grantees to other funders in the network — where trust and relationships are currency, and key to unlocking new resources to preserve critical services. Lastly, I encourage philanthropists to consider funding and allocating more resources toward the “unfundables” mentioned above. These investments, despite having profound and lasting impact on society, are most at risk to be hardest hit by the funding cuts — being too politically sensitive to find ready funders elsewhere. The era of foreign aid as we know it is ending — but what comes next is up to us. While philanthropy cannot possibly plug the $12.9 billion-in-official-development-assistance-sized hole in Asia left behind by the U.S. withdrawal, we can build bridges, lifeboats, and the skills to swim — ensuring no one is left behind to sink when the next funding crisis comes crashing back to shore. Together, we can rebuild and reshape a philanthropic landscape that is resilient, locally led, and grounded in the diverse needs of our region. The future of Asia’s development must no longer depend on distant donors, but rather on the hands of people who call this region home.