Impact of US foreign aid cut in Asia to be minimal

The freeze and subsequent reduction of US foreign aid for democracy promotion in Asia, following the Executive Order signed on Jan 20, had a broadly limited impact.

- JAMES GOMEZ

At first, the funding freeze sparked major concerns about the future of civil society and democratic development in the region.

But a closer look reveals that the real issue is not the absence of US aid, but rather the uncomfortable reality that much of that aid may not have been effective in the first place.

After all, the state of democracy and human rights in Asia has remained poor and, in many places, has continued to decline despite years of international funding. For instance, according to a 2024 report by The International Institute for Democracy and Electoral Assistance — a Stockholm-based intergovernmental organization that supports democracy worldwide — 51% of countries in the Asia-Pacific region from 2018-2023, experienced a decline in their democratic systems, while only 26% saw improvements.

In 2023, US democracy promotion made up just 3.2% of total US foreign aid, or around US$2 billion (65 billion baht), according to recent data collected by Pew Research Center. The vast majority of the aid is directed towards foreign governments to support their national peace processes, or health, education, and humanitarian programmes.

Even within that small democracy slice, most funding does not reach local actors. Instead, it flows first to US-based (and then other Western) international NGOs (INGOs) and large foreign intermediaries.

According to the report by the Stimson Center released in 2023, these groups absorbed around 90% of the direct budget, with only a fraction trickling down to local civil society organisations (CSOs). The result is a top-heavy model, in terms of budget, mandate, agenda, and selection of beneficiaries that often sidelines the very communities the aid is meant to empower.