USAID managed more than $40 billion in 2023
USAID managed more than $40 billion in 2023 AFP News

Elon Musk, with the backing of President Donald Trump, has moved to shut down the U.S. Agency for International Development (USAID), triggering major political backlash and operational chaos.

While the agency has not been officially dissolved, its headquarters have been closed, employees locked out of systems, and funding frozen as part of a broader review. Per reports from PBS, Musk claimed Trump authorised him to dismantle the agency, but legal challenges and congressional opposition could still influence its fate.

What Is USAID and Why Is It Under Threat?

USAID has long been the primary U.S. agency responsible for delivering foreign aid and development assistance, overseeing nearly £32 billion ($40 billion) in humanitarian aid across 130 countries in 2023. It has funded initiatives ranging from disaster relief to democracy-building efforts. However, critics—including Musk and Trump—argue that the agency has been mismanaged, accusing it of wasteful spending and political bias.

On February 3, USAID employees were informed via email that their Washington headquarters would be closed, and 600 staffers were locked out of internal systems overnight, per reports from CNN. Trump, who has long criticised the agency, stated over the weekend that USAID has been 'run by a bunch of radical lunatics' and needs to be 'completely overhauled.' However, no formal executive order has been issued to dissolve the agency entirely.

USAID's Controversial Spending and LGBTQ Initiatives

One of the primary arguments for shutting down USAID has been its use of taxpayer money to fund controversial initiatives, particularly LGBTQ programmes abroad. Per reports from Daily Mail, USAID allocated millions to various LGBTQ projects worldwide, sparking backlash from conservative lawmakers.

One of the most contentious examples was a £1.2 million ($1.5 million) grant awarded to a Serbian NGO, 'Grupa Izadji' ('Group Come Out'), to promote LGBTQ workplace inclusion and economic opportunities. Additional funding of nearly £23 million ($30 million) was directed towards research on HIV transmission among transgender individuals and sex workers in South Africa. USAID also reportedly financed transgender healthcare initiatives in Vietnam and India, along with a £20,000 ($25,000) opera in Colombia to promote transgender representation in the arts.

While these projects were defended as part of USAID's broader human rights efforts, critics have argued that they stray far from the agency's core mission of providing direct humanitarian relief.

Political Fallout and Legal Uncertainty

The decision to freeze USAID's operations has drawn fierce opposition from Democratic lawmakers and international allies. Senator Chris Van Hollen denounced the move as 'plain illegal,' arguing that the President does not have unilateral authority to dismantle a congressionally established agency. At a protest outside USAID headquarters, Democratic legislators vowed to challenge the shutdown in court, per New York Post.

Secretary of State Marco Rubio has been appointed as the acting administrator of USAID, indicating that the agency may be absorbed into the State Department rather than completely eliminated. In a statement, Rubio suggested that USAID's future remains uncertain but confirmed that its operations would be restructured to 'align with U.S. national interests.'

What Happens Next?

While Musk has declared USAID 'beyond repair' and Trump has signalled support for its closure, the agency is not yet fully shut down. Per Politico, USAID's website and online presence have been wiped, its offices stripped of branding, and its employees left in limbo. However, given the legal and political obstacles, a complete dissolution of the agency is far from guaranteed.

For now, USAID's fate hangs in the balance. Whether it will be fully disbanded, restructured, or reinstated remains a contentious issue, with both legal battles and political manoeuvring set to determine its future.