Monkeying around with ‘the grid’

Cartoon-Daily Mirror

 

Monkeying around with ‘the grid’

10 Feb 2025 The Morning

Sri Lankans were once again bitterly reminded that progress is slow in Sri Lanka, even when there is a new political force, with a resounding mandate for ‘system change’ in governance. Last morning’s islandwide power outage, ‘jolted’ Sri Lankans and visitors alike, bringing back memories of a time, when the island’s energy security vulnerabilities were clear and in-your-face. The fact that energy security or lack thereof is one of Sri Lanka’s greatest national security vulnerabilities. However, we do not seem to view it as such, as governments often move at a snail’s pace, when it comes to enacting reforms and structural changes to the national energy landscape, indicating a lack of prioritisation and focus on the matter. The association between national security and energy is a vital one. Today, access to affordable and uninterrupted energy supply has become essential to the functioning of modern economies, and Sri Lanka is no different.

One only needs to look at the energy crisis Europe has been facing, due to over-reliance on Russian sources since the 1990s, only to be caught between a rock and a hard place today, over the conflict in Ukraine and its implications on energy security. Europe has identified the need for diverse energy sources and reinforced their capacity and transmission networks as a matter of national priority, and even work together to network and share resources. However, Sri Lanka which began to reform and restructure the energy landscape of the country over the last few years, moved to roll back many of those plans when the new Government came into power.

🔺Regime change has done little to address an ‘energy mafia’ that plagues the nation. 

As of last evening, there is no clear explanation about why the islandwide outage occurred, except for a vague, and almost laughable statement which states that there was an ‘emergency situation’ that broke out at the Panadura Grid Sub Station, which the Ministry of Energy claims caused an islandwide outage which lasted nearly 7 hours. The Minister of Energy Kumara Jayakody, issuing a press release last evening passed the buck on to the many previous governments (a well-established political tactic in Sri Lanka) claiming that: “Preliminary investigations have indicated that the actions of the previous governments, who had acted without foresight and understanding of maintaining the stability of the national electricity system, and their lack of understanding the technology, led to this situation.”

Last month, The Sunday Morning reported on the vulnerabilities in the national grid due to poor planning and stumbling in the absorption of renewable energy sources. The Ceylon Electricity Board (CEB) was facing a serious risk of system failure during holidays due to the sudden influx of solar-based Renewable Energy (RE) into the grid, particularly when electricity demand is low. “CEB Chairperson Dr. Tilak Siyambalapitiya, addressing this concern, revealed plans to mitigate such risks through an incentive-based electricity tariff system. This mechanism will encourage industries to operate on holidays, thereby stabilising demand and reducing strain on the system,” The Sunday Morning reported. According to the report, the system faced risks when renewable energy flooded the local grid, explaining that the lack of RE storage facilities was a significant factor. A CEB official had highlighted that rooftop solar generation at the household level surged into the system during long holidays when energy consumption was low. “As of now, we manage the system by controlling firm energy capacities, but since RE generation is unpredictable, sudden surges can still pose a risk to the entire system,” the official explained, adding that shortages could be managed by generating more electricity, but excess rooftop solar generation flowed directly into the system without any control, creating a risk of failure. If this was the case, why were there no planning and risk-reduction measures initiated? Why did the CEB not address this issue as a priority if they saw the threat on the horizon?

    It is no secret that the CEB and their ‘engineer’ clan have shown little or no enthusiasm to add renewable energy sources to the national energy mix. The energy ‘establishment’ has long resisted the push to bring onboard more renewable energy into the energy mix that fuels and powers the island nation. Some, including two former ministers of power and energy, have gone as far as to allege attempts and acts of ‘sabotage’ by the energy bureaucracy of Sri Lanka to kill renewable energy plans in the crib. Today, some observers and energy experts continue to question the ‘establishments’ negative approach to renewables, pointing out the regime change has done little to address an ‘energy mafia’ that plagues the nation.🔺  

Poverty in post-crisis Sri Lanka still a concern

 

Poverty in post-crisis Sri Lanka still a concern

09 Feb 2025 | By Maneesha Dullewe

While there has been a reduction in poverty figures along with Sri Lanka’s gradual restoration of macroeconomic stability following the economic crisis, much work remains to be done to empower vulnerable populations to break free of the cycle of poverty. 

Poverty rates, as per the official poverty line measured by the Department of Census and Statistics (DCS), have declined from a high of 28.8% in 1995/’96 to 4.1% in 2016. 

According to the DCS, Sri Lanka’s official poverty line, defined as the minimum expenditure per person per month to fulfil basic needs, has fallen from Rs. 16,524 in December 2023 to Rs. 16,191 as of December 2024, which is nevertheless an increase from Rs. 16,017 in November 2024 and Rs. 15,994 in October 2024.

Accordingly, the minimum required monthly income for a family of four to meet basic needs is Rs. 64,764.

The DCS notes that the official poverty line increased due to the lower National Consumer Price Index (NCPI) value reported in December 2024 compared to preceding month.

University of Peradeniya (UOP) Department of Economics and Statistics Professor of Economics Dileni Gunewardena highlighted that Sri Lanka had been following a standard methodology to calculate the poverty line and to estimate poverty since 2002. 

“In addition, in 2019, the official poverty line was updated and is based on 2012 spending patterns, which are not vastly outdated. The poverty line is updated monthly based on the cost of living index, and to the extent that this is accurately measured, there is no concern about the accuracy of poverty figures. 

“The World Bank (WB) also provides estimates of poverty based on higher poverty lines, which gives us a sense of the incidence of poverty if we use a more generous definition of poverty.”

While the Centre for Poverty Analysis (CEPA) notes that Sri Lanka has achieved substantial reduction in monetary and multidimensional poverty in the last 25 years, aspects of poverty also undergo changes, for instance following the recent the Covid-19 pandemic. 

Prof. Gunewardena told The Sunday Morning that based on WB poverty estimates, there had been a slight reduction in poverty figures, which “makes intuitive sense given that the economy has been picking up between 2022 and 2024”.

“The main source of poverty estimates since 2019 are the WB analyses, which are based on 2019 data with some assumptions about how prices have changed and how the distribution of income has changed,” she noted. 

Accordingly, the estimates of the headcount index (percentage of the population that is poor) are as follows:

2019 – 11.3%, 2020 – 12.7%, 2021 – 13.1%, 2022 – 25%, 2024 – 23.4%

When contacted, the World Bank referred The Sunday Morning to its Sri Lanka Development Update of October 2024, which notes that while positive growth, low inflation, a steady exchange rate, and improved fiscal and external balances throughout 2024 have contributed to greater stability and a nascent recovery, poverty remains high and Labour Force Participation (LFP) continues to decline. As such, the WB notes that poverty is projected to have tripled in urban areas.

Contributory factors 

Leading to the present conditions of poverty, according to Prof. Gunawardena, are the rising cost of living; job losses that followed the economic crisis, especially in the informal sector; and the somewhat sluggish recovery in 2023. 

“What we know from studies done during Covid-19 and during the economic and political crises of 2022 is that food insecurity was high. Families were cutting back on food, health, and education. 

“We can also expect that children born during 2021-2023 are also likely to have higher malnutrition than in typical years, because of the poorer nutrition of their mothers during pregnancy. These are the effects of the rise in poverty that are pernicious and have long-term consequences,” she said. 

The World Bank similarly notes: “Human development outcomes have deteriorated in the face of high poverty and falling LFP. Households’ budgets have shrunk since 2019, leading to increases in malnutrition and child mortality. The effects of the crisis have been felt across the country and affected households not considered vulnerable before 2019.” 

Moreover, in addition to worsening job losses, wages have contracted by 16.9% and 22% in the informal private and public sector, respectively, between July 2021 and 2024, leading to generalised worsening of living conditions, including deteriorating health outcomes.

The WB also points out that while reforms were undertaken to restore macroeconomic stability, they nevertheless imposed additional burdens on the poor, meaning that

“crisis-induced poverty increased by 9.6 percentage points between 2019 and 2023”. 

Poverty alleviation

Meanwhile, speaking to The Sunday Morning, Minister of Rural Development, Social Security, and Community Empowerment Upali Pannilage stressed that the Government’s priority in terms of addressing poverty was to tackle rural poverty and empower these communities while moving away from dependency on subsidies. 

Explaining the Government’s policy stance, he said: “As a policy, we have identified rural poverty as a priority. In order to eliminate rural poverty, the rural economy must be strengthened. To this end, we will soon be launching a national programme; the basic plan has been formulated and it has been presented to Cabinet.”

However, Pannilage pointed out that there would continue to be vulnerable segments among these communities which would be difficult to empower, such as the elderly, who would continue to receive subsidies. 

“We are providing relief to targeted segments – the poorest of the poor. Programmes are also operational to eradicate poverty in general, since it cannot be done through subsidies alone. However, since people have been suffering due to the economic crisis for some time, many have been stricken by poverty,” he stated. 

Accordingly, he pointed out that the Government had increased the ‘Aswesuma’ monthly benefit allowance currently granted to poor and extremely poor categories from Rs. 8,500 to Rs. 10,000 and from Rs. 15,000 to Rs. 17,500, respectively. 

Moreover, since the transitional poor are yet to emerge from their poverty levels, the benefit period has been extended by three months until 31 March. 

Addressing further relief measures, Pannilage noted that the Government had also taken steps to provide fuel subsidies to fisheries communities, increase allowances for pensioners, and provide relief to schoolchildren. 

“In this manner, relief measures are ongoing, targeting the poorest in society. Alongside this, our main target is empowering the families that have been identified as extremely poor through the Samurdhi Development Department, moving away from the mentality of depending on subsidies alone,” he noted. 

According to the Minister, this programme has commenced and the Government’s aim is to empower 400,000 families through it this year, helping these individuals to rise from poverty through various programmes that will facilitate foreign employment, self-employment, etc.  

Addressing what is needed to ensure sustained poverty reduction, Prof. Gunawardena outlined the need for policymakers to consider both programmes to alleviate poverty as well as broader policies to strengthen the economy and to broad-base economic growth. 

According to her, reforms aimed in this direction need to focus on improved revenue mobilisation, improved targeting of welfare benefits, and structural reforms aimed at job creation and increasing LFP. 

“In terms of ‘Aswesuma’ or any similar welfare benefit scheme, the Government needs to find ways of reducing the mistargeting that has very clearly taken place in the past. The best way to do this is to minimise the need for human intervention and let poor people communicate their poverty through their expenditure patterns. 

“In addition, strengthening the economy by encouraging foreign direct investment as well as service sectors like hospitality and tourism will generate the kinds of jobs that engage people from low-income households,” she said. 

Prof. Gunawardena further highlighted the importance of improving both physical and social infrastructure to “make good use of the best resource we have, which is our people”. 

“To release our well-educated female labour force from unpaid household work, we need to improve care infrastructure – childcare and elder care as well as for care for persons with disabilities,” she asserted.🔺

Economic future hinges on skilled workforce, entrepreneurial growth: Deputy Minister

 

Deputy Minister Chathuranga Abeysinghe

Economic future hinges on skilled workforce, entrepreneurial growth: Deputy Minister

Daily FT Monday, 10 February 2025

• Distinguishes between ‘lifestyle businesses’ and ‘serial entrepreneurship’; says 90% entrepreneurs earn below Rs. 10 m annually
• Calls for rural businesses to connect with high-value industries than just encouraging participation
• Identifies boatbuilding as promising sector requiring skilled workforce across multiple trades
• Urges SMEs to focus on value-added exports than internal competition
• States Govt. to introduce sector-specific strategic blueprints within six months and Rs. 50 b SME funding pool via Development Bank initiative with major State banks
• Offers unsecured Rs. 1 m startup loans, contingent on financial discipline and feasibility planning 
• Introduces Credit Guarantee scheme covering 70% of loan risks to encourage SME lending at lower interest rates

By Charumini de Silva

Industry and Entrepreneurship Development Deputy Minister Chathuranga Abeysinghe stated that the Government is shifting its focus towards encouraging entrepreneurship and enhancing workforce skills to drive economic growth.

Speaking at the recently concluded Sri Lanka Economic Summit 2025, he outlined a strategic vision aimed at bridging skill gaps, enabling rural entrepreneurs and integrating local businesses into the global supply chain.

Abeysinghe highlighted a crucial distinction between ‘lifestyle businesses’ — small-scale ventures primarily for self-sustenance and ‘serial entrepreneurship’, which contributes significantly to economic expansion.

Citing available data, he said 90% of country’s entrepreneurs generate below Rs. 10 million annually (US$3400), raising the question of whether they are ‘true business owners’ or simply ‘earning a living’.

“What we need is a model that does more than just encourage economic participation. The goal should be to create businesses in rural areas that are directly linked to high-value industries,” he said. 

One such promising sector he outlined is boatbuilding, where Sri Lanka has demonstrated strong potential over the past few years. The Deputy Minister emphasised the need for a supply chain of skilled workers from rope makers to electrical engineers and painters to support the industry’s growth.

🔻90% of country’s entrepreneurs generate below Rs.10 million 

(US$3400) annually, raising the question of whether they are ‘true business owners’ or simply ‘earning a living’.

Given the country’s strategic location and expanding demand for maritime services, Abeysinghe believes that Sri Lanka can emerge as a key player in regional boat manufacturing and marine tourism.

The Deputy Minister underscored the need for businesses to integrate into global supply chains rather than merely competing within the domestic market. “Although the SMEs contribute significantly to the gross domestic production (GDP) growing at around 5% annually, most local businesses are engaged in internal competition rather than value-added exports,” he disclosed.

Looking ahead, the Deputy Minister said the Government is also focusing on long-term industrial planning, with a commitment to developing sector-specific strategic blueprints. 

Abeysinghe asserted that within six months, each major industry should have a clear roadmap defining its growth trajectory, energy efficiency targets, workforce requirements and competitive positioning. 

“We need clarity on where each industry is heading, what they aim to become — their short and long term goals and how the Government will support them,” he said.

He said this collaborative approach will ensure that both private sector and policymakers are aligned on economic priorities.

Abeysinghe pointed to industries such as coconut, rubber and agriculture, which offer vast untapped potential for value-added exports if businesses can scale effectively. “The Government is therefore prioritising knowledge-sharing, capacity building and better connectivity between rural SMEs and global markets,” he added.

He stressed access to finance and operational space is a major challenge for startups and SMEs. “Many entrepreneurs invest heavily in land and buildings before their businesses are fully established, leading to financial strain,” he said.Noting that the country lacks a comprehensive loan scheme for startups that do not own any assets, Deputy Minister revealed that the Government is working on a Development Bank initiative, bringing together major banks — People’s Bank, National Savings Bank (NSB) and Regional Development Bank (RDB) and others, to create a Rs. 50 billion SME funding pool. “This initiative will offer startups unsecured loans of Rs. 1 million, provided they meet certain financial discipline requirements such as proper accounting, feasibility studies and training completion,” he explained.

In addition, he disclosed a Credit Guarantee Scheme is in the works, where 70% of loan risks will be covered to encourage banks to lend to SMEs at lower interest rates.

According to him, another pressing issue is informality in the SME landscape, with 70-80% of businesses operating outside the formal economy—limiting their ability to access financing and global markets.

He said the Government is introducing incentives for formalisation, including a performance-based rating system that links business growth to better credit access and market opportunities.

“By offering clear advantages for businesses to register and follow structured development programs, the Government aims to incentivise SMEs to move from informal survival businesses to scalable enterprises,” he added.🔺

President calls on exporters to seize new opportunities to lead economy

President calls on exporters to seize new opportunities to lead economy

FT Monday, 10 February 2025 

In address at 26th Presidential Export Awards, reaffirms Govt.’s support for export sector 

Awards recognise 14 major winners and 51 companies 

Stresses importance of trust between SL and international economic stakeholders 

Advocates strategic trade agreements that align with national interests than aggressive trade policies 

Acknowledges country’s weak market position, need for external support 

Highlights Govt. initiatives to provide technical assistance, improve product quality 

Emphasises renewable energy investments, lower electricity tariffs to boost competitiveness 

President Anura Kumara Dissanayake on Friday urged exporters to seize new opportunities and drive economic recovery, stating the need for strategic engagement in global markets. 

Addressing the 26th Presidential Export Awards at the Bandaranaike Memorial International Conference Hall (BMICH) last Friday, he reaffirmed the Government’s commitment to supporting exporters as they rebuild the economic future.

The Presidential Export Awards, initiated in 1981 by the Sri Lanka Export Development Board (EDB), recognise exporters who make significant contributions to the economy. The latest edition honoured 14 major award winners and 51 companies across the production and service sectors, with recipients gaining the right to use the Presidential Export Award logo for three years as a global marketing tool.

Dissanayake reiterated his commitment to fostering an export-driven economic recovery, asserting the importance of trust between Sri Lanka and international economic stakeholders.  He assured exporters that their concerns would be addressed and invited them to work alongside the Government to strengthen the economy.

“The Government’s role is to facilitate the conditions for success, but it is the exporters who must take the lead in rebuilding the country’s economic future,” he said.

Dissanayake also underscored the interconnected nature of the global economy, insisting that Sri Lanka must compete strategically for market share rather than adopting aggressive or reckless trade policies. 

He called for well-structured trade agreements that align with Sri Lanka’s national interests, cautioning against hasty decisions that could have long-term economic consequences.

The President acknowledged the country’s weak market position, noting that external support was necessary to regain lost ground. 

He stressed that economic stabilisation efforts had created a foundation for recovery and the Government was prepared to assist exporters in leveraging these for long-term growth. 

Recognising the pressures faced by exporters, the President highlighted initiatives to provide technical assistance and support for high-quality product development. 

He also outlined the Government’s focus on renewable energy, stating that lower electricity costs would contribute to the long-term competitiveness of Sri Lankan industries.

The awards ceremony was attended by several distinguished individuals, including Industry and Entrepreneurship Development Minister Sunil Handunneththi, Labour Minister and Economic Development Deputy Minister Prof. Anil Jayantha Fernando, Energy Minister Kumara Jayakody, Industry and Entrepreneurship Development Deputy Minister Chathuranga Abeysinghe, Industry and Entrepreneurship Development Ministry Secretary Thilaka Jayasundara, EDB Chairman Mangala Wijesinghe, Senior Adviser to the President Duminda Hulangamuwa, along with exporters, other Ministers, Deputy Ministers, Parliamentarians, foreign diplomats, Ministry Secretaries, and officials of the EDB.

Overall Awards 2023/24

1.Best SME Exporter - eMarketingEye Ltd. 2. Emerging Exporter - Link Natural Products Ltd. 3. Woman Exporter - Ashok Garments Ltd. 4. Best Performing Exporter in Emerging Markets - MAS Holdings  5. Contributor from the Regions to the Export Supply Chain - MAS Holdings 6. Innovative Export Service - OREL IT Ltd. 7. Innovative Export Product - Dipped Products PLC 8. Contributor to Sustainable Development in Exports - MAS Holdings 9. Best Value-Added Exporter - Sysco LABS Technologies Ltd.10. Best Exporter in Product Diversification - MAS Holdings11. Market Diversified Exporter - Dilmah Ceylon Tea Company PLC 12. Globally Outreached Sri Lankan Brand - Akbar Brothers Ltd.13. Net Foreign Exchange Earner - MAS Holdings14. Exporter of the Year - MAS Holdings🔺

Visualizing the international reach of U.S. funding cut by Trump

Visualizing the international reach of U.S. funding cut by Trump

Using graphics to illustrate the scope of U.S. foreign aid spending and analyzing how the Trump administration’s sweeping cuts could play out across the world.

By Cate Brown

, 

Dan Keating

 and 

Dylan Moriarty

In a matter of weeks, President Donald Trump has moved to dismantle a vast international aid system built up by Republican and Democratic administrations over decades.

More than $60 billion in foreign assistance has been frozen for 90 days, pending a government review. Secretary of State Marco Rubio has said the U.S. Agency for International Development may be abolished. On Friday, a federal judge blocked the administration from placing about 2,7000 staffers on paid leave and recalling nearly all of those posted abroad.

In a letter to lawmakers last week, Rubio cited “conflicting, overlapping, and duplicative” activities by USAID resulting in “discord in the foreign policy and foreign relations of the United States.”

“CLOSE IT DOWN,” Trump posted Friday on social media.

Without U.S. support, humanitarian experts warn that already precarious global aid efforts could collapse, putting millions of lives at risk. Some former government officials said the sudden changes would undercut U.S. foreign policy and national security.

“We are not only less safe, but we have abandoned people all over the world,” said Brittany Brown, a former USAID official.

On Wednesday, Trump’s former USAID counselor Chris Mulligan condemned the funding pause. “Every minute that assistance is frozen weakens America, makes us less secure and costs us jobs,” he said.

Here’s a breakdown of U.S. foreign assistance and a look at how the new administration’s sweeping cuts could play out across the world.

Foreign aid by country, 2023 FY

25B

10B

Ukraine

$17.2B

1B

100M

Israel

$3.3B

Foreign aid spending by region

Europe and

Eurasia

$20.2B

Sub-Saharan

Africa

15.7B

Worldwide

programs

15.7B

Middle East and

North Africa

10.6B

South and

Central Asia

3.9B

Western

Hemisphere

3.8B

East Asia

and Oceania

2.1B

The U.S. government is the world’s single largest humanitarian donor, according to the United Nations, though foreign assistance represented less than 1 percent of the congressional budget in fiscal 2023. That adds up to about $210 a year for the average taxpayer, compared with more than $2,800 per year for defense.

President Harry S. Truman introduced the country’s first major foreign aid package in the aftermath of World War II, arguing that strategic assistance could insulate states against the spread of communism. A decade later, President John F. Kennedy signed the Foreign Assistance Act into law and created USAID by executive order.

Key allies, such as Ukraine, Israel and Egypt, rely on U.S. funding to secure their borders and protect shared interests. Other top recipients, including Jordan, Iraq and countries across sub-Saharan Africa, rely on American aid to combat the debilitating effects of war, drought and disease.

Experts warn that the 90-day funding pause could be particularly devastating for countries on the brink of famine, such as Sudan. The World Food Program there relies on the United States for more than 60 cents of every dollar spent on aid.

“The United States is the financial foundation of the entire humanitarian system,” said Nathaniel Raymond, executive director of the Humanitarian Research Lab at the Yale School of Public Health. “How will the house stand if you rip down the foundation?”

Global health and food aid

Emergency food assistance

$5.3B

Material relief assistance

and services

5.2B

Health

$23.7 billion

STD control including HIV/AIDS

5.1B

Relief co-ordination; protection

and support services

3.7B

Other 4.4B

Countries with largest spending of health funds

Ethiopia

Nigeria

Congo (Kinshasa)

880M

802M

$1.2B

Afghanistan

Syria

728M

769M

Ukraine

1.1B

Yemen

Kenya

South Sudan

699M

679M

617M

Somalia

881M

A third of the U.S. foreign aid budget in 2023 was spent on emergency food and global health.

In Ethiopia, the largest recipient of U.S. food assistance, WFP estimates that over 15 million people rely on emergency aid, following a years-long drought that wrecked crops and an armed conflict in Tigray that left communities on the brink of famine.

The majority of people receive direct food aid, rather than cash, which means that working supply chains are vital to staving off hunger.

Although Rubio issued a waiver to exempt emergency food programs from the 90-day aid pause, WFP administrators said the entire production line in Ethiopia has ground to a halt.

Warehouses in Djibouti are stocked with next month’s food supply, but truck drivers and program officers have been fired, furloughed or ordered to stop work. Without transportation or staff, palettes of taxpayer-funded flour, lentils and iodized salt may go to waste.

Aid workers say they have been given no guidance from administrators on whether essential workers can return.

“They got rid of all the senior lawyers,” said a senior USAID civil servant, now placed on administrative leave, speaking like others in this story on the condition of anonymity for fear of retribution. “The people who would be working to clarify these things aren’t around.”

An internal WFP memo viewed by The Washington Post warned of an “imminent” break in Ethiopia’s emergency assistance pipeline. Officials fear the disruption could set off a chain reaction of violence, starvation and migration.

The impact on global health could be just as swift and far-reaching. Multimillion-dollar programs to combat malaria, Ebola and tuberculosis have been put on hold. Some U.S.-funded clinics were ordered to close. And medical providers that receive U.S. support said that they have started to ration supplies or halt nonessential services in anticipation of funding gaps.

“We’re reading that an agency is closing down, but it’s not an agency: It’s someone for people to see when they go into labor or their child gets sick with malaria,” said Colin Puzo Smith, director of global policy at the nonpartisan advocacy group Results.

Over the past decade, there’s been a bipartisan effort to give local communities more control over health programs — often placing USAID in a supporting role.

“USAID is not footing the bill for the majority of health needs worldwide, but they often support a key part of the system,” said Puzo Smith. “When you turn that off overnight, it throws the whole system into disarray.”

Under a waiver granted by Rubio to the United States’ flagship HIV prevention program, PEPFAR, doctors are free to administer “lifesaving HIV care and treatment services,” but some say they are afraid to proceed because U.S.-funded systems to track pharmaceutical supplies are disabled and access to USAID’s global payment system has not been restored.

Global security

Stabilization operations

and security sector reform

$9.1B

Global security

$9.9 billion budget

Conflict mitigation and reconciliation

$349M

Combating weapons of mass destruction

$278M

Peace and security - general

$157M

$10M

Other

Countries with largest spending of security funds

Egypt

1.2B

Ukraine

Jordan

654M

429M

Israel

$3.3B

Iraq

Lebanon

Somalia

318M

215M

181M

Ecuador

Taiwan

Colombia

162M

135M

113M

The United States spends nearly $10 billion on programs designed to reduce global conflict.

One third of “stabilization” funding was given directly to Israel in 2023, followed by large contributions to Ukraine and Egypt. U.S. support to Israel increased dramatically after the Hamas-led attacks on Oct. 7, 2023, and the war in Gaza. Trump issued a waiver for Israel and Egypt that allows U.S. funding to continue throughout the pause.

The United States also leads efforts to combat violent extremism in Syria, Iraq and across North Africa.

At Al Hol, a desert camp in northeast Syria that houses thousands of former Islamic State fighters and their families, a collection of U.S. contractors provide food, water and fuel to residents, and train the camp’s security forces.

Although some programs have resumed following a State Department waiver, the future of key contractors may be in jeopardy because USAID has not issued payments for other regional programs in December and January, according to Proximity International. The U.S.-based contractor says it is owed more than $2 million.

“We will fail because USAID does not have a working mechanism to pay us back for money we have already spent on allowable expenses,” said Courtney Brown, Proximity International’s CEO.

In Iraq, the future of a flagship effort to resettle the families of former Islamic State fighters is also in doubt.

The U.S.-backed program “facilitated security clearances, cross-border transit and rehabilitation support for the new arrivals,” said a former USAID senior staff member. “Now all of that is on pause.”

The former staffer fears that the breakdown in U.S. programming will undercut years of local trust-building and strengthen the hand of Tehran.

“A more stable Iraq was a more sovereign Iraq that could stand up to Iranian pressure,” he said.

Governance

Macroeconomic

foundation

for growth

$14.6B

Governance funds

$17.8 billion

Rule of law and

human rights 933M

Good governance 749M

Civil society 749M

Other 937M

Countries with largest spending of governance funds

Moldova

151M

Colombia

92M

Mexico

73M

Ukraine

West Bank

and Gaza

14.7B

66M

Honduras

58M

El Salvador

54M

Tunisia

52M

Somalia

49M

Bangladesh

49M

U.S. investments in global governance range from anti-corruption initiatives to programs that help safeguard elections.

The Biden administration committed more than $14 billion to Ukraine to soften the political and economic damage from Russia’s war with the nation. It also poured funding into Eastern European countries, such as Moldova, to counteract Russian influence.

Colombia, a key South American ally, is home to one of the most robust governance programs. The country has recently seen an upsurge in fighting between rival rebel groups and is hosting more than 3 million Venezuelan migrants. USAID was leading efforts to integrate new arrivals and reduce the flow of migrants to the north — a Trump administration priority.

“We used all the tools of national security: defense, diplomacy and development,” said Susan Reichle, a retired USAID mission director. “You need all three to help a country, particularly after conflict.”

Reichle fears the sudden U.S. departure will create a power vacuum.

“We are breaking our partners’ trust,” she said. “And this is going to force them into the arms of China and Russia.”🔺