‘Stop Work!’ Aid and the Afghan economy after the halt to US aid

The Department of State then issued ‘stop-work orders’ on existing funding and suspended the review of any new proposal that was or would have been funded through it or the United States Agency for International Development (USAID), pending a review by the Office of Management and Budget, an agency within the president’s executive office. Trump’s rationale for the order is that:

The United States foreign aid industry and bureaucracy are not aligned with American interests and in many cases antithetical to American values. They serve to destabilize world peace by promoting ideas in foreign countries that are directly inverse to harmonious and stable relations internal to and among countries.

A separate statement, issued by the White House on 3 February said:

For decades, [USAID] has been unaccountable to taxpayers as it funnels massive sums of money to the ridiculous — and, in many cases, malicious — pet projects of entrenched bureaucrats, with next-to-no oversight.

One of the examples it gave was “[h]undreds of millions of to fund ‘irrigation canals, farming equipment, and even fertilizer used to support the unprecedented poppy cultivation and heroin production in Afghanistan,’ benefiting the Taliban.” (The source used by the White House was a 2018 article published by Breitbart quoting a Special Inspector General for Afghanistan Reconstruction (SIGAR) report.) One source familiar with the policy told the author this was ironic, given that funding the irrigation canals had come “about entirely because of State and Pentagon pressure.”

The barest clarification on the criteria that might allow projects to get funding or get funding resumed came six days after Trump’s order in a 26 January statement from Secretary of State Marco Rubio: “Every dollar we spend, every program we fund, and every policy we pursue must be justified with the answer to three simple questions: Does it make America safer? Does it make America stronger? Does it make America more prosperous?”

On 27 January, according to Politico, Pete Marocco, Director of the Office of Foreign Assistance at the State Department and Deputy Administrator-designate at USAID and the man now “effectively running the agency from the State Department,” discovered that USAID had paid out USD 153 million since the order. Politico reported that officials pointed out that this “covered numerous payments, including a key set of employee salaries and money owed to organizations for work already done … and did not violate the Trump foreign aid freeze.” However, Marocco was reported to have been furious. Representatives of the new Department of Government Efficiency (DOGE), whose director is the tech billionaire Elon Musk, “approached the agency’s acting leadership and handed them a list of 58 people, almost all senior career officials, to put on administrative leave. They said these people were suspected of interfering with the implementation of the funding freeze.” That was to have a chilling effect on all other employees.

On 28 January, Rubio issued a waiver to the executive order, exempting “existing lifesaving humanitarian assistance programs,” so long as the resumption was temporary and no new contracts were signed. It specified as exempt: “core lifesaving medicine, medical services, food, shelter, and subsistence assistance, as well as supplies and reasonable administrative costs as necessary to deliver such assistance.” It excluded family planning and “non-lifesaving assistance.” However, as will be seen below, what qualifies as permitted, and the mechanisms for getting funding resumed is so confused and under-supported that it is hard to see much getting authorised, at least in the short term.

On 3 February, agents from DOGE raided USAID. Its director, Elon Musk, had said that he wants to cut around a third of annual federal government spending, slash federal regulations, oversee mass layoffs and shut down some agencies entirely (see BBC reporting). DOGE has targeted multiple federal agencies, including those dealing with health (Guardian reporting here), science, weather forecasting and NASA (see this 5 February rundown in Science). USAID is among those subject to particular savagery. On 2 February, Trump said it was “run by a bunch of radical lunatics” (NBC reporting here), while Musk tweeted that it was a “criminal organization.” Then, during the 3 February raid, according to former and current officials speaking to the Associated Press, agents demanded and, in the end, despite having inadequate security clearance, succeeded in getting access to classified information, including intelligence reports, held by the agency (there has been push-back on this allegation – see the already cited Politico article). The same day, Rubio announced he was the acting director of USAID (clip and transcript on NPR here).

The USAID website was offline for several days, but came back with a link to the Office of the USAID Inspector General and a brief message that, from 7 February, worldwide, all directly hired personnel were to be placed on administrative leave, “with the exception of designated personnel responsible for mission-critical functions, core leadership and specially designated programs.” The State Department, it said, was working on a plan to fly employees working overseas home, although flights would have to be made in the next 30 days to be paid for.

On 7 February, in response to a lawsuit from unions, a federal judge ordered a temporary halt, until 14 February, to both the administrative leave and recall of overseas workers. The grounds for his decision was that the president had taken “unconstitutional and illegal” actions in trying to shut down the agency, which had been created by Congress in 1961. He did not order a halt to the funding freeze, saying the unions had not demonstrated that it would cause irreparable harm to USAID staff (see NPR reporting here).

The repercussions of Trump’s order for Afghanistan

For many decades, USAID has been the biggest source of civilian aid in the world, funding projects in more than 120 countries. That includes Afghanistan. The latest SIGAR quarterly report, published in January 2025, outlined the scale of that funding:

The US has spent nearly $3.71 billion in Afghanistan since withdrawing from the country in 2021. Most of that money (64.2%) went to UN agencies, the United Nations Assistance Mission in Afghanistan, and the World Bank administered Afghanistan Resilience Trust Fund. Another $1.2 billion remains available in the funding pipeline for possible disbursement.

According to the UN’s Financial Tracking Service, in 2024, US funding accounted for 43.9 per cent of the total aid to Afghanistan. For 2025, so far (more aid from different countries and organisations is likely to be coming in, although also, less now from the US), the amount pledged by the US was dwarfing contributions from other countries. As of the start of February, it amounted to 65 per cent of the total for 2025: USD 223.7 million, with the next highest far lower: Switzerland (USD 27.6 m), European Commission (26.9 m), Germany 19.8 m), Denmark (14 m) and the UK (7.1 m). The significance of America’s contribution is evident from Table 1 (below), published by SIGAR in its latest quarterly report.^[1]

Since the fall of the Islamic Republic, major donors have been reluctant to give aid that might help the Islamic Emirate, so give no bilateral aid, but rather funnel all money via the UN, World Bank, other international organisations and NGOs. Almost all of the aid is humanitarian or ‘humanitarian plus’ (ie funding basic services). This means the UN has enjoyed an outsized role since August 2021 and most agencies that operate in Afghanistan have received some US funding, as Table 2 (below), published by SIGAR, shows. It needs to be stressed that this is an unwieldy and expensive way to fund aid and it is not clear what percentage of the funding actually makes it to frontline services. In other words, the losses to Afghanistan will be less than on paper, but we do not know how much less.

A UN source in Kabul told AAN that agencies are now scrambling to see if at least some of their programmes might be protected by the existing lifesaving humanitarian assistance programmes waiver. The official said USAID had sent out stop-work notices and exemption forms at the same time with the apparent message: “Justify if [your work] is lifesaving or not and how it fits in with US aims.” However, guidance on whether a programme might be exempt is now nearly impossible to get, given the shutdown – albeit lifted for a week – of USAID. There is also the question of who will process the forms. One line in the Politico article says each waiver will have to be signed off by Pete Marocco. Given the stop-work order was global, it is difficult to see many waivers being authorised.

The lack of an obvious procedure means lifesaving programmes could still be halted because of lack of funds. AAN has seen one list of the initial impact of the freeze on some UN agencies and larger NGOs working in Afghanistan and the hit looks to be massive. It mentions the mass closure of healthcare facilities, cuts or closures to programmes helping IDPs, children and women-led organisations and de-mining, with layoffs of staff, including by implementing partners, which are often international or national NGOs.

AAN also saw one bulk email that the director of a large Afghan NGO had sent to his staff:

We have received immediate stop-work orders from several of our major partners, which will significantly impact our operations. Unfortunately, we are forced to make some very tough decisions, as our work depends entirely on donor funding. All [NGO name redacted] team members are notified that January 31, 2025, will be their last working day unless I personally reach out to you and request your continued work. If you don’t receive a call or message from me, it means your position is eliminated.

There are also kind words in the email, heartfelt thanks, an acknowledgement of colleagues’ past dedication and recognition of the hardship they are now facing, but the message is, of necessity, brutal: Most of you no longer have a job, nor a salary. Other managers at NGOs have described their distress at having to send out similar messages, to staff or implementing partners, as well as worries about their own jobs and families.

The timing of the order is particularly difficult. It is the start of the year, the start of project cycles, and teams are in place. How badly UN agencies and NGOs are hit depends on their funding. Those with non-US funding are counting themselves lucky. Others, highly dependent on American money, are closing down programmes – or closing down altogether. Some NGOs will be able to keep some staff on, waiting for the end of the 90-day review. Others will not survive. Many smaller NGOs normally keep going from project funding to project funding and the Trump order will be the final nail in the coffin.

Acting deputy Minister of Economy Abdul Latif Nazari told ToloNews on 28 January that 50 NGOs had stopped work because of the suspension in funding, and called on countries not to ‘politicise’ aid. Over a week later, however, he gave Shamshad a mix of reasons for the closures – the halt in funding for some and violating the laws of the Islamic Emirate for others. Nazari’s second comment revealed how under pressure the aid sector is from all directions, not only because of funding but also the Emirate ban (with some exemptions) on employing women, and officials’ attempts to influence the nature of programmes, who gets hired and who receives aid.^[2]

The scale of US funding and the range and variety of US-funded programmes means that any pause or permanent end will inevitably affect key sectors. The US funds “health, education, agriculture, and food security,” according to SIGAR, as well as “civil society and media, focusing on women, girls, and broad human rights protections.” USAID’s Bureau for Humanitarian Assistance (BHA), says SIGAR, supports 18 humanitarian activities in Afghanistan through partnerships with UN agencies providing emergency food and nutrition assistance, water, sanitation, and hygiene services, primary health care services, disease response, protection services, and shelter. Table 3 below shows some of those activities, although SIGAR notes: “Due to ongoing security risks, USAID has asked that some information about its programs, especially those related to democracy, gender, and media, be withheld to protect staff and beneficiaries in Afghanistan.

The impact on the ground

AAN has spoken to some of those working in different sectors. The director of one national NGO, which supports human rights defenders, women’s rights activists and other civil society organisations, said they were counting themselves lucky as they had a variety of funders – the hit had not been too bad – but others in the sector were laying people off. Much of the sector’s work, he said, was below the radar, small grants to small, unregistered organisations, or financial help, for example, to human rights defenders in acute need. If coming from USAID, that could well disappear.

A man working for a large national NGO described how they had been providing educational services to children up to grade 6 (about 12 years old) in villages far from existing schools and also teacher training. All that has stopped. The NGO’s offices in the various provinces had closed, he said, and 200 to 250 people had lost their jobs. Those still working – and he was one of them – had seen their salaries reduced:

We had people who’d worked for us for 15 years, now having to stay at home. They have no other source of income. There are no other jobs out there. They might be able to live on savings for one or two months, but what should they do after that?

Another man working in one of Afghanistan’s poorest and most isolated provinces said all three of his NGO’s mother and child health centres had closed, along with their mental health centre, because of the stop to USAID funding. “There is no other institution providing the services we were providing, not in the areas we covered, he said. “All those services have been destroyed.” He was one of 30 employees who had lost their jobs, with salaries paid only until the end of February, albeit with the hope that, if the NGO can find alternative funders, their work can resume. If not, he said: “Our life will go from 100 to zero because we relied on our salaries. There is no other option for me or my colleagues.”

More hopeful was a woman working for an international NGO that also provides health services, in seven provinces: USAID had been funding women’s health projects and had supported three health centres in her province. In two of the provinces where her NGO works, she said, other donors had stepped in to keep services going. In the others, employees had been sent home, but not yet laid off, as there was still hope of finding alternative donors. The interviewee was among those currently at home and said beneficiaries had been coming and asking them to continue their work, or they would lose heart.

The director of one media organisation said many local radio stations were supported by USAID, receiving small grants that were, for many of them, significant. A grant of USD 50,000, he said, might make up 80 per cent of their running costs. USAID also supports other parts of the media landscape, both inside and outside Afghanistan, with some outlets in print or broadcasting highly dependent on US funding, while others have (some) commercial or European funding or private donors. The media is struggling to survive everywhere in the world, and Afghanistan is no exception. However, given the general weakness of the economy, making enough money commercially through advertising is difficult. “US funding to Afghanistan’s civil society, including the media, has been instrumental for decades,” the media director said. “It is part of their legacy.” He was thankful that “so far, no outlet has shut down.”

The director of another media outlet was sanguine. They did not receive USAID money but relied largely on advertising, which had shrunk since 2021, but even so, he said: “During the occupation, we became too dependent on US money and since then, we’ve been learning to cope. As a country, we need to grow, defend our rights and stand with what makes sense for [us].”

These are snapshots, accounts of what has happened to individuals and their organisations in the last two weeks or so, but give little sense of the scale of what is happening. ACAPS, a non-governmental project that provides independent humanitarian analysis, offers a more comprehensive overview of how the order could affect multiple sectors in Afghanistan. Its detailed breakdown includes extensive data and also poses many questions.

Will, for example, the ‘lifesaving’ waiver allow USAID-funded WASH (Water, Sanitation and Hygiene) programmes to continue providing “safe drinking water, essential hygiene items, water and sanitation system rehabilitation, and hygiene promotion activities”? Would it cover the distribution of soap and sanitary products, as well as maintenance, bearing in mind that “delays in repairs or unplanned stops in services” increase the risk of diseases being transmitted. ACAPS notes that Afghanistan has some of the highest caseloads of cholera and acute watery diarrhoea in the world.

IDPs and returnees living in crowded and makeshift conditions are especially vulnerable to the adverse effects of inadequate WASH services, as are people with heightened susceptibility to diseases (such as babies and young children, older people, people with disabilities, and people with chronic illnesses).

Similarly, with healthcare, ACAPS describes confusion, uncertainty and fear. In 2025, ACAPS said, the US had “planned to offer financial support to at least 11 organisations delivering emergency and primary healthcare services, providing essential medicine, implementing vaccination campaigns, and training and coordinating health services across the country.” Again, does the ‘lifesaving’ waiver apply only to emergency medicine or would it include “basic healthcare services, chronic and maternal healthcare, mobile healthcare services, and vaccine rollout in emergency settings.” ACAPS foresees a reduction in the availability of maternal care, including prenatal and postnatal care, safe deliveries and awareness-raising about women’s health and childbirth. It also points to the explicit suspension of USAID for sexual and reproductive healthcare and family planning.

90 days without access to family planning can have huge impacts on women, e.g. by causing unintended pregnancies, further impeding women’s and girls’ abilities to control their own bodies, which already face restrictions from [the interim Taleban administration’s] policies. Access to family planning is critical to young Afghan women and girls: 16.3% of women ages 20-24 had a live birth by age 18 in 2024, and 64% of deaths among 15-19-year-old girls and women and 70% among 20-24-year-old women were the result of pregnancy complications or unsafe abortions. This is particularly concerning because Afghanistan has one of the highest infant mortality rates in the world.

The ACAPS report is worth reading in full. Concise, packed with detail and transparently sourced, it goes through the likely impact of the suspension of US aid on many other sectors, including nutrition, food security and agriculture, protection, education, emergency shelter and the provision of non-food items, and the disruption to data collection and analysis. Among the latter is the suspension and taking offline of USAID’s Famine Early Warning Systems Network (FEWS NET), “whose data and analyses,” ACAPS says, “are crucial in allowing humanitarian responders to prepare for major food insecurity crises and famines.” See, for example, our references to the critically important work of FEWS NET in this AAN report from November 2021, ‘Global Warming and Afghanistan: Drought, hunger and thirst expected to worsen’, and interviews with two FEWS NET scientists in March 2024, who ably translated technical information into readily understandable English to help the author try to answer the question: ‘Finally, Rain and Snow in Afghanistan: Will it be enough to avert another year of drought?’

At the very least, Trump’s order is massively disrupting aid to a very poor country. There may be reprieves for some programmes, given the waiver on lifesaving humanitarian assistance, although that waiver is vague and deliberately temporary. Beyond that, what will the 90-day review of aid mean for Afghanistan? How and where will it fit into Rubio’s measures for aid worthiness: “Does it make America safer? Does it make America stronger? Does it make America more prosperous?” The bulk of funding seems unlikely to resume. Musk, reported the Associated Press among others, has called USAID “a ball of worms. There is no apple. And when there is no apple, you’ve just got to basically get rid of the whole thing.” With the president’s support, he said: “We’re shutting it down.”

The macroeconomic effects of the Trump order

The amount of aid coming into Afghanistan was already falling. The World Bank, in its December 2024 Afghanistan Development Update, said that grants from all donors in 2023 were down by about 25 per cent compared to 2022 (to approximately 243 billion afghanis). The UN’s Financial Tracking Service also shows a steady decline: from USD 3.8 billion in 2022 to 1.9b in 2023, 1.7b in 2024 and so far in 2025, USD 0.3b (see Table 4 ^[3] below).

The impact of the abrupt cut in aid goes beyond what it means for individual beneficiaries, or even the families of employees who have lost their jobs. The amount of US aid is so large that the reduction, done suddenly and without warning, has macroeconomic repercussions.

Part of Afghanistan’s vulnerability lies in the way that, over the twenty years of the Islamic Republic, its economy came to be heavily reliant on unearned foreign income in the form not only of civilian aid but also military support and the spending of foreign armies. It had one of the most extreme versions of what political economists call a ‘rentier economy’ in the world. So great were the sums arriving that they carried their own problems, economically and politically: they drove corruption and a bubble economy, made some Afghans (and foreign contractors) fabulously wealthy and powerful, while most remained poor. The unearned income – known as ‘rent’ – discouraged democracy and accountability.^[4]

While the very scale of the rent made it detrimental, it should have been reduced gradually, replaced by greater taxation (this was already happening to some extent in the Ghani administrations) and a transition to a more normal economy. However, in 2021 when the Taleban took power, the income was suddenly cut off. It was calamitous, deepening poverty to alarming levels, and only remedied to a certain extent by an influx of large amounts of humanitarian aid during that first winter (see AAN reporting from September 2021 here and our 2023 dossier of reports on the economy since the Taleban takeover here). The Emirate has increased the tax intake and other revenues since its re-establishment. Still, the cut to US aid in 2025, while less than in 2021, when all unearned foreign income fell off a cliff, is still large enough to be significantly.

Foreign aid supports the afghani and helps cover the trade deficit (Afghanistan imports more than it exports). After Trump’s order, in that last week of January, the value of the afghani against the dollar fell by 7.6 per cent, with knock-on implications for the price of imported goods, including food, fuel and medicine. Aid coming into the country funds wages, taxes, government revenues and spending, and ultimately, GDP. In 2023, according to the World Bank’s already cited December 2024 Development Update, total aid amounted to 17.9 per cent of GDP. That the aid is largely in the form of cash dollars, necessarily flown in because of sanctions-related problems with making international banking transactions, helps with liquidity.^[5]

The exact scale of the reduction in money coming into Afghanistan as a result of the Trump order is still not clear. Some funds might resume if the waiver on lifesaving assistance is acted upon, but all indications are that the amount will, ultimately, be significantly lower. Moreover, the reduction in aid is hitting an economy that is already struggling. Almost half of the population – some 22.9 million people – will require humanitarian assistance this year, according to the 2025 Humanitarian Needs and Response Plan. The Bank’s most recent Economic Monitor, published in December 2024, before the change in the US presidency, also already made for bleak reading. There was economic growth in 2023-4, it said, but it:

[R]emains insufficient to improve social indicators meaningfully. High poverty, unemployment, limited resources, and weak purchasing power continue to leave millions vulnerable, while subdued aggregate demand keeps the economy in a deflationary phase, constraining growth. The outlook remains fragile due to policy uncertainty, financial isolation, and inadequate human and physical capital. Restrictions on women’s education and socio-economic participation further undermine sustainable development and long-term progress.

The vulnerability of Afghan public services

One problem is that civilian aid fills a gap in public services. The Emirate inherited a state where bilateral funding supported many basic services. It has successfully increased domestic revenue, but has chosen to focus spending on the security forces, which take up about half of the budget, and on education, especially religious education. Indeed, according to the Bank, it expanded the public sector tashkil (workforce) across the board in financial year 2023-4,^[6] but with a particular emphasis on the security services and teachers. The tashkil was 9.2 per cent bigger in 2023-4 than in the previous year, and the overall wage bill larger by 5.6 per cent.

The Emirate’s massive expansion of the security forces since it took power, despite the country being at peace, has been at the expense of other, much-needed sectors. The Bank found that in 2022-3, for example, the Emirate allocated just one per cent of total operational spending to health. In 2023-4, according to the Bank, the health sector contracted by 3.1 per cent, but “managed to stay afloat due to international support.” Much of that support will probably now go. (For figures and more analysis of Emirate public finance choices, see the author’s November 2023 report, ‘Survival and Stagnation: The state of the Afghan economy’).

The Emirate’s focus on operational spending is also at the expense of development, which gets only about 7.7 per cent of the budget. Moreover, up till now, says the Bank, the Emirate had been funding development projects from reserves accumulated under the Islamic Republic (about 33 billion afghanis or roughly USD 445 million at today’s exchange rate). These are now almost drawn down. The prioritisation of operating expenses over development, and the limited nature of development funding, it said, “could hinder long-term growth” and the Emirate:

[M]ay have to impose stricter austerity measures, cut back on development expenditures even further, or explore alternative revenue-generation strategies. The constraints on development funding could slow down essential projects in areas such as infrastructure, education, healthcare, and agriculture, all of which are key to driving long-term economic growth and reducing poverty.

Afghanistan’s economy is beset by many problems. They include UN and US sanctions, which mean that, despite far-ranging waivers, international banking transactions are often blocked, the freezing of the country’s assets and the continuing hangover of the Republic’s extreme rentier economy. The economy is fragile, making it highly vulnerable to the impact of the USAID stop-work order, with repercussions to basic services and any taxation which the Emirate could better deploy to fund them itself. One paragraph from the Bank’s December report seems particularly pertinent, given that the decline in US aid has come not gradually, but suddenly:

Looking forward, the reduction in donor grants is expected to continue, with a gradual decline likely to become more evident over time. This potential decrease in external assistance may pose significant challenges for Afghanistan’s already fragile economy, especially as the country remains heavily reliant on these funds to support humanitarian efforts and basic services. As international priorities shift, the need for sustainable domestic revenue generation and alternative funding mechanisms will become increasingly urgent for the [interim Taleban administration].

International repercussions

Donors which could step in to fill the gap left by USAID are not evident, given how vast its funding has been. It was already a difficult environment to find money for Afghanistan, with so many other pressing crises in the world – Sudan, Gaza, Ukraine, Somalia – and many donor governments cutting back on aid. The difficulty of working in Afghanistan, in particular the repugnance felt by many donors about Emirate policies on women and girls, has made reducing aid to Afghans a politically easy option. At the same time, there may now be worries among the neighbours, some of whom will themselves also be feeling the impact of the halt to USAID funding, as well as Europe about Afghanistan suddenly becoming poorer and Afghans becoming more desperate. If so, will the threat (as they see it) of more migrants motivate them to try to fill the gap caused by USAID leaving the field?

One country is being widely named as a beneficiary of Trump’s policy, including by former British prime minister Gordon Brown: the shutdown, he said, is “good news for China, whose own global development initiative will be strengthened as it positions itself to replace America.” He also contended that: “Desperate people will turn to extremists who will say that the US can never again be trusted. And by causing misery and by alienating actual and possible allies, far from making America great again, the cancellation of aid will only make America weaker.”

Rubio’s three questions could be asked in a different way: Does stopping aid, triggering skyrocketing poverty and desperation in an already unstable part of the world, make America safer? Does it make America stronger? Does it make America more prosperous?”

The Emirate’s response

So far, there has been little official response from Kabul or Kandahar to the Trump order. For the Islamic Emirate, there are likely positives and negatives. The order will hit the economy at a time when it is already struggling and public finances are under pressure. There will be layoffs, downward pressure on GDP, less income to tax and a likely drop in government revenues, all coming as needs increase. Poverty will deepen. All of this is problematic. Some sectors have been left more vulnerable to the cut in foreign assistance than they needed to be. Until now, however, Afghans do not seem to link the taxes they pay to what they get from the government in return. In other words, the Emirate may be able to portray any immiseration and loss of basic services entirely on the foreigners, with no political cost to itself over its spending choices.

Given the rumours in December that the amir, Mullah Hibatullah Akhundzada, was considering closing down international NGOs, he may welcome the shrinking of the aid sector, although it was never clear – if the rumours were correct – if he wanted less aid, or just less control of it by the foreigners. However, the United States’ weakening of particular sectors that are troublesome to the Emirate – the media, women’s and human rights groups – will surely be welcomed by Afghanistan’s supreme leader.

Edited by Roxanna Shapour