Consequences of U.S. Foreign Aid Reductions
Foreign Aid Suspensions: What’s at Stake?
Transparent and accountable aid is a powerful tool for reducing poverty and creating opportunity.
By ensuring resources are used effectively, we help hardworking farmers and entrepreneurs build better businesses, grow food sustainably, and strengthen local economies. Leading to lasting change for families and communities. [1]
Foreign Aid Reductions Affect Lives
The Impact of Foreign Aid: Creating Lasting Change
At TechnoServe, we partner with corporations, foundations, and government agencies worldwide to help smallholder farmers and entrepreneurs build profitable, resilient businesses. Through targeted training, market connections, and business solutions, we create economic opportunities that last. [2,3,4]
Foreign Aid Reductions
Which regions will be most affected?
Countries in Africa, Latin America, and South Asia are particularly vulnerable [5]. These regions rely on targeted aid to support agriculture, healthcare, and business development—helping millions of families achieve financial independence.
FAQs
Understanding Foreign Aid Cuts
Why is U.S. foreign aid at risk?
The new U.S. administration paused all foreign aid for a 90-day period in order to assess “programmatic efficiencies and consistency with United States foreign policy.” This shift in political priorities often has consequences for long-term instability, economic downturns in vulnerable countries, and increased migration.
How does foreign aid help fight poverty?
Economic Development and Welfare: Foreign aid is designed to promote economic development and improve welfare in developing countries. It helps supplement national capital formation, addressing savings and foreign exchange gaps that hinder growth in these economies (1).
Poverty Reduction: Studies have shown mixed results regarding the effectiveness of foreign aid in reducing poverty. Some research indicates that foreign aid can significantly reduce poverty when combined with effective fiscal policies, particularly in sectors like education and health (1). However, other studies suggest that aid’s impact on poverty reduction is not always positive and can depend on factors like corruption and how aid is allocated (2).
What happens to communities when foreign aid is cut?
Families face food shortages, reduced healthcare access, and fewer job opportunities. Without support, they struggle to break the cycle of poverty, leading to long-term socio-economic consequences.
What percentage of the American budget is devoted to foreign aid?
Foreign aid in the United States accounts for a relatively small portion of the federal budget. In fiscal year 2023, foreign aid spending was approximately $71.9 billion, which represented about 1.2% of the total federal spending for that year (1). Historically, foreign aid has ranged between 0.7% and 1.4% of total federal outlays since fiscal year 2001 (1). In terms of GDP, U.S. foreign aid spending is typically less than 0.33% (2).
How do foreign aid cuts impact global health programs?
A decrease in funding affects life-saving programs, including disease prevention, maternal healthcare, and emergency medical response. Organizations on the ground lose critical resources, putting millions at risk of preventable illnesses.
Can cuts in foreign aid lead to increased migration?
Aid Cuts and Migration Drivers: The freeze on U.S. foreign assistance to Latin America has been criticized for undermining efforts to address the root causes of migration, such as poverty, violence, and corruption. This could potentially increase migration pressures as conditions worsen in these regions (2).
How can individuals support foreign aid efforts?
The most effective way to make a difference is through direct support to organizations that continue working on the ground despite funding challenges.
How can I help?
Your Support Makes a Difference
TechnoServe works with farmers, entrepreneurs, and communities to create sustainable economic opportunities that lift people out of poverty for good.
A Different Way to Make A Difference
Hear how we are different from other organizations working to end poverty directly from the farmers and small business people we serve. Watch their stories:
The world is our workplace
Africa
From A to Z(imbabwe)
Home to some of the world’s fastest-growing economies, Africa is poised for unprecedented opportunity and prosperity. Yet with half of the continent’s people still living below the poverty line, a dramatically expanding youth population, and the region’s unique vulnerability to climate change, Africa also faces a host of unique challenges. TechnoServe has more than 50 years of experience in over 20 African countries, working with public and private partners to catalyze broad-based economic growth through agricultural and enterprise development.
Latin America and the Caribbean
¡Viva la prosperidad!
Latin American and Caribbean countries continue to experience high levels of inequality and public security concerns, and the region’s poverty rate is at its lowest level in three decades. Sustained economic growth depends on increased productivity and innovation. TechnoServe has implemented sustainable agriculture and enterprise development programs in the region since 1969, working with local, regional, and multinational partners to strengthen sustainable farms, small businesses, and industries.
Asia
Strong support where it’s needed
TechnoServe works in India, a country that has experienced tremendous recent growth but still struggles with significant development challenges. Despite an economic boom fueled by information technology and the services industry, roughly 200 million people still live in poverty, with about two-thirds of the population living in rural areas. TechnoServe works with women and men in India to strengthen sustainable value chains, foster entrepreneurship and employable skills in poor communities, and promote gender-inclusive economic development.
