Switzerland Follows USAID: Another Major Donor Ends Development Aid to Bangladesh- wna24

New Delhi, India: Just days after the US donor agency, USAID, announced it would halt funding to Bangladesh, the Swiss government has also decided to wind down its development aid programs to the country. Switzerland’s government has announced the termination of its development programs in Albania, Bangladesh, and Zambia, following significant cuts to its international cooperation budget. 

However, Switzerland’s commitment to humanitarian aid, peacebuilding efforts, and support for Ukraine will remain unaffected by the cuts.

The decision comes after the Swiss parliament allocated less funding for foreign aid than the government had requested in December.

The parliament reduced the international cooperation budget by CHF 110 million ($121 million) for 2025, and cut CHF 321 million from the financial plan for 2026-2028. 

As a result, Switzerland’s bilateral, economic, and thematic cooperation, as well as its contributions to multilateral organizations, will be impacted, according to an official statement.

In light of the budget cuts, Switzerland’s executive body, the Federal Council, was informed on Wednesday that the Swiss Agency for Development and Cooperation (SDC) will phase out its development programs in the three countries by the end of 2028. 

Additionally, from 2025 to 2028, country and thematic programs, as well as organizational support, will face broad reductions.

The USAID suspending all funding to the interim government of Bangladesh led by Muhammad Yunus came in compliance with an executive order signed by President Donald Trump on January 20, which temporarily halts all US foreign aid for a period of 90 days to reassess its alignment with American interests and values.

The “stop-work” order, issued by the U.S. State Department on Friday, mandates the immediate cessation of all ongoing foreign assistance programs, including those in Bangladesh. Notably, this directive does not apply to military financing for Israel and Egypt, which remain exceptions to the aid suspension.

A memo from Secretary of State Marco Rubio, as reported by NPR, outlines that a comprehensive review of all U.S. foreign assistance must be concluded within 85 days, after which a report will be prepared for the Secretary’s review and subsequent recommendations to the President.

USAID’s direct communication to its implementing partners in Bangladesh was clear: “This letter serves as a directive to all USAID/Bangladesh implementing partners to immediately stop, cease, and/or suspend any work performed under your respective USAID/Bangladesh contract, task order, grant, cooperative agreement, or other acquisition or assistance instrument.” The agency emphasized that partners should minimize costs and await further written notice to resume operations.

President Trump’s executive order criticizes the existing framework of U.S. foreign aid, stating, “The United States foreign aid industry and bureaucracy are not aligned with American interests and in many cases antithetical to American values.” It further explains that this aid has sometimes destabilized world peace by promoting ideas contrary to stable international relations.

For Bangladesh, this sudden halt in aid could pose severe challenges. USAID’s program in the country is the largest in Asia, supporting sectors like food security, health, governance, education, and environmental projects, as well as managing the humanitarian response to the Rohingya refugee crisis. The cessation of this aid could disrupt these initiatives at a time when Bangladesh is also grappling with economic instability, with the Yunus administration seeking international financial support, including a $4.7 billion bailout from the IMF and $5 billion to bolster its foreign reserves.

The U.S. had previously committed substantial financial support to Bangladesh, with $202 million in aid pledged in September 2024, part of a broader $954 million package agreed upon in 2021 for disbursement through 2026.