USAID halt creates major impact on Maldives projects
A source familiar with the situation confirmed that all USAID programs in the Maldives have been put on hold.
The temporary suspension of the US Agency for International Development (USAID) under the administration of President Donald Trump is set to have significant consequences for the Maldives. With reports suggesting a possible complete shutdown of the agency, the country stands to lose substantial financial aid and critical support for military, environmental, and human resource development programs.
USAID has been a key partner in supporting the Maldives across various sectors. In 2023 alone, the agency allocated $20 million (MVR 302 million) for development initiatives in the country. Among these, the largest share—$8 million—was directed toward military cooperation, including training programs and security initiatives. Additionally, USAID has played a crucial role in disaster preparedness, climate resilience, and human capital development, areas of high importance for an island nation vulnerable to environmental threats.
A source familiar with the situation confirmed that all USAID programs in the Maldives have been put on hold. Employees, both foreign and local, have received temporary notices regarding the suspension.
“This is a stop to many things being done in Maldives outside the government budget,” the source noted.
The suspension of USAID funding could create immediate economic and security challenges for the Maldives. The cessation of military assistance disrupts ongoing training programs and strategic collaborations with the US, potentially affecting the country’s defense preparedness.
Beyond security concerns, the Maldives relies heavily on international aid for climate resilience projects, given the existential threat posed by rising sea levels. USAID has supported initiatives to strengthen disaster response mechanisms and sustainable environmental practices. The abrupt end of these programs could leave the nation more vulnerable to natural disasters and climate-related disruptions.
Moreover, the potential loss of employment for local workers engaged in USAID-funded projects adds another layer of economic strain. The Maldives already faces economic challenges due to its reliance on tourism, and any reduction in international assistance could exacerbate financial difficulties.
The move to suspend USAID aligns with Trump’s broader policy of reducing US involvement in global affairs. Since his return to office, his administration has focused on cutting foreign aid to prioritize domestic economic concerns. Tech billionaire Elon Musk, a close Trump ally, has been vocal about reducing federal expenditures, including eliminating USAID altogether.
Following a meeting with Trump, Musk signaled his support for halting USAID funding permanently. This decision has already led to the suspension of several high-ranking USAID officials, reinforcing the notion that the agency’s future remains uncertain.
For the Maldives, the suspension of USAID assistance presents a crucial challenge. The government may need to seek alternative sources of funding, either from other international partners or through domestic budget adjustments. Strengthening ties with regional allies such as India and China could become a strategic necessity to fill the gap left by USAID’s withdrawal.
