Bangladesh’s development sector is undergoing a major disruption following the sudden collapse of foreign aid, particularly after a US government directive that paused and later terminated a large share of USAID-funded programmes. The decision led to the suspension of hundreds of millions of dollars in projects, including health, research, and humanitarian programmes, affecting tens of thousands of workers and beneficiaries across the country.
One of the earliest and most significant impacts was felt by major organisations such as International Centre for Diarrhoeal Disease Research, Bangladesh (icddr,b), which suspended US-funded research activities and issued widespread termination letters to staff. The shutdown particularly disrupted public health programmes like tuberculosis control, creating immediate gaps in essential services and research continuity.
The crisis quickly extended to other large development actors, including BRAC, which reported severe cuts across its US-supported projects. The loss of funding also had direct consequences for vulnerable populations, including Rohingya refugees, who depend heavily on NGO-led humanitarian assistance. As international funding streams disappeared, many long-term programmes were either scaled down or halted entirely.
Smaller local NGOs, which previously relied on relatively stable access to donor-funded grants, are now facing a more competitive and uncertain funding environment. With large international organisations entering the same shrinking pool of available grants, community-rooted NGOs are struggling to sustain operations despite their deep local networks and long-standing trust within communities.
Development professionals describe the situation as a structural shift in the aid ecosystem, where funding volatility is not only reducing programme coverage but also reshaping power dynamics in the sector. Many locally based organisations are being forced to compete directly with global NGOs for limited resources,
