The United States has quietly restarted portions of its development assistance to Pakistan through the United States Agency for International Development (USAID), signaling a cautious thaw after months of suspended aid.
According to officials familiar with the matter, Islamabad has already received grants under two key initiatives: the US Need-Based Merit Scholarships for Pakistani University Students (Phase-II) and the FATA Infrastructure Program, which will continue funding until June 2025.
This partial restoration follows the February 2025 decision by Washington to halt around $845 million in aid under Executive Order 14169. That freeze affected both government-to-government projects and “off-budget” programs, where USAID directly funds NGOs operating in Pakistan without routing the money through federal ministries.
Diplomatic sources say discussions between the U.S. Embassy in Islamabad and Pakistan’s Economic Affairs Division are ongoing to explore a broader reinstatement of USAID projects. Islamabad is reportedly pushing for a new funding mechanism, suggesting that even NGO grants should be channeled through relevant ministries to ensure better oversight and alignment with national priorities.
USAID and Pakistan share a long history of cooperation. In 2010, they formalized development efforts through the Pakistan Enhanced Partnership Agreement (PEPA). More recently, in 2023, both countries signed a five-year Development Objectives Assistance Agreement worth $445.6 million, with an additional $407 million amendment to boost climate-resilient growth, governance reforms, and improved healthcare.
While the partial resumption is a welcome step, the future of broader USAID assistance will depend on ongoing negotiations and assurances over transparency.
