USAID is on pause: who in Ukraine will feel the impact of the US government’s funding cuts

29 January 09:42

on January 27, the U.S. Agency for International Development (USAID) suspended all funding for all projects in Ukraine. This happened after the US President decided to suspend all US foreign aid programs for 90 days to assess compliance with national interests and US foreign policy goals. The relevant document was published on the White House website, informs Komersant ukrainskyi.

As you know, the U.S. Agency for International Development has funded various projects in Ukraine, including social programs, supported local government, inclusion, and helped veterans and internally displaced persons.

Ulyana Movchan, an organizational development expert and founder of Connection Agency, spoke to Suspilne about the possible consequences of stopping project funding. According to her, there were several USIAD-funded programs in Ukraine aimed at supporting the public sector. Currently, there is a threat that programs to support local governments may stop completely. A funding cutoff could also have implications for the energy sector, as many US projects were aimed at ensuring Ukraine’s energy independence. This includes direct purchases of various technologies and products.

In addition, according to the expert, projects to support veterans are at risk. The termination of funding may also affect young people, internally displaced persons, feminist organizations working on LGBT and gender equality, and inclusive initiatives.

Ukrainian media will feel the cessation of funding

Almost 90% of Ukrainian media survived on grants. This is a consequence of the fact that in the first year of Russia’s full-scale invasion of Ukraine, the advertising market, including online media, fell by 92%. Oksana Romaniuk, director of the Institute of Mass Information, told Hromadske Radio about this. According to her, the advertising market has not yet revived, especially in regional media.

Members of the Ukrainian Media Movement have already issued a statement calling on Ukrainian citizens and businesses, as well as international and foreign charitable foundations, to provide emergency support to Ukrainian media and media NGOs whose work and continued existence are threatened by the loss of institutional funding. As noted, USAID has supported hundreds of different media projects in Ukraine.

The digital industry will also experience a lack of funding

About a third of all GovTech projects were funded by USAID. This was stated by expert Roman Lansky in a commentary to the DOU specialized publication.

“USAID has covered about a third of all GovTech funding through various projects. Perhaps even a little more. Therefore, all new initiatives are suspended, and only those that have already been implemented are paid for. But this is preliminary information, everything can change,” says Lansky.

Some see a positive side to the termination of USAID funding

There are currently 112 active USAID projects in Ukraine worth $7 billion, but according to MP and economist Marian Zablotskyi, they have a number of drawbacks. First, according to the politician, many of them are reduced to roundtables and conferences. Secondly, most of these funds remain in the United States as the net profit of private companies that implement these grants. The deputies cited a number of examples to support their conclusions. Read more about this in Komersant ukrainskyi.

Ukrainian authorities are ready to respond

Iryna Vereshchuk, Deputy Head of the Office of the President of Ukraine , called the news of the termination of USAID funding “unexpected and unpleasant: for both the government and the public sector.”

She reminded that she is in charge of humanitarian response, and a 90-day pause from a key donor, she said, cannot but be disconcerting.

Iryna Vereshchuk said that substantive consultations with American partners would soon be launched to continue funding humanitarian response projects in Ukraine as soon as possible.

The President of Ukraine also instructed government officials to report on the US support programs that are currently suspended and determine which of them are critical and need to be addressed now. According to him, part of such funding can be provided through state finances, and part will be discussed with European and American partners.

Василевич Сергій
Editor