USAID Officially Shuttered After 64 Years, Marking a Major Shift in U.S. Foreign Aid Policy

On July 1, 2025, the United States Agency for International Development (USAID) officially ceased operations. The closure marks the end of a 64-year legacy of U.S. foreign aid and international development assistance, representing a major shift in American global engagement strategy.

Established in 1961 through the Foreign Assistance Act and founded by President John F. Kennedy, USAID operated as an independent agency. It was tasked with reducing global poverty, promoting democratic governance, and advancing humanitarian efforts through partnerships with foreign governments and organizations.

Closure Driven by Government Efficiency Agenda

The decision to dissolve USAID was enacted under the Trump administration as part of a broader initiative to reduce the size of the federal government. The closure falls under the purview of the newly created Department of Government Efficiency, led by Elon Musk. The department identified and eliminated programmes deemed inefficient or misaligned with national priorities.

Administration officials state that the U.S. Department of State has absorbed USAID’s remaining functions. The realignment was justified as a step toward reducing redundancy and redirecting foreign aid in accordance with an “America First” policy framework.

Impact on Global Health and Humanitarian Programs

USAID played a pivotal role in numerous global health and development efforts. Its involvement in the agricultural Green Revolution is credited with saving up to 1 billion lives. The agency also collaborated with international partners to improve health systems in developing nations, contributing to a 69% reduction in child mortality rates since 1990.

However, many of these programmes experienced funding cuts in the years leading up to the agency’s closure. Organisations scaled back or terminated programmes targeting HIV/AIDS prevention, malaria eradication, and maternal health.

Health experts and international aid organisations have voiced concern over the decision. Research published in The Lancet and other peer-reviewed journals warns of a likely resurgence in preventable diseases and rising mortality rates in vulnerable regions.

Legacy and Transition to the State Department

Throughout its history, USAID operated in more than 100 countries, providing disaster relief, economic development, and technical assistance. The agency served as a central pillar of U.S. soft power and contributed significantly to international stability.

The transition of its duties to the State Department marks a fundamental change in how the U.S. will engage with the world on development issues.

The shift brings a significantly reduced budget and fewer personnel. This has therefore prompted questions about the scope and effectiveness of future aid efforts.

Uncertain Future for U.S. Global Development Role

The closure of USAID has generated intense debates among policymakers, non-governmental organisations, and foreign governments. Critics argue that the dismantling of a long-standing development institution creates a leadership vacuum in global humanitarian efforts. Supporters of the move maintain it will streamline operations and better align with national interests.

MMI