The United States Agency for International Development ( USAID ) has suspended its assistance programs for 90 days , following a corresponding decision by the US State Department .
According to the parliamentary committee on humanitarian and information policy, since the start of the full-scale invasion, USAID has provided Ukraine with $2.6 billion in humanitarian assistance, $5 billion in development, and another $30 billion in direct budget support. And despite the fact that in the Ukrainian segment of social networks, grants to public associations are mostly discussed, now IDPs, energy, and small and medium-sized businesses will suffer first of all.
One of the impacts of this aid on Ukrainian GDP is that a significant portion of the funds were allocated not for salaries to grant project participants, but for economic development. For example, programs to support farmers, demining, the restoration of certain types of production after Russian shelling (we are talking about both repairs and the purchase of various equipment), or, if necessary, the relocation of such production..
The state does not always help in such cases. But from the discussions that have recently unfolded on social networks, we can conclude that not only ordinary citizens, but also Ukrainian officials are unaware of this.
That is, a lot of things in the country are done at the expense of the American people, at the expense of the same USAID, but in general, the impression is that it is supposedly done by the state of Ukraine.
What should we understand about the situation with the suspension of USAID assistance?
First, this will be felt immediately by people who directly received humanitarian aid. That is, for IDPs who simply will not have the opportunity to buy bread, it was critical. But I hope that this segment will be restored ahead of time, without waiting for the 90 days to expire. As far as I know, for example, programs related to the purchase of medicines (vital humanitarian aid projects) will not be stopped. That is, there are exceptions.
The suspension of USAID programs will also be felt by some Ukrainians who will lose their jobs because of this. This does not mean that they will be left completely without a means of livelihood, but they will not go to the shops to spend their money. And this, in turn, will reduce (although not critically) the volume of trade.
Secondly, international aid is foreign exchange inflows to Ukraine. And the absence of some part of the funds can slightly unbalance our currency, this is an impact on our balance of payments (but this is a question for the National Bank). However, it is worth remembering that now a significant amount is also allocated to Ukraine by the Europeans.
That is, devaluation of the hryvnia is possible, this must be understood, but the impact would be much worse if there were no aid at all, and if there was no aid throughout 2025. Fortunately, this is not the case now.
Thirdly, the reduction of assistance through USAID projects will affect the prices of various goods in Ukraine. That is, this is not something ephemeral, but a direct impact. For example, stopping the demining program means that a mined field will not be processed, that is, there will be no harvest from it. Or another example: if earlier an entrepreneur engaged in agriculture could receive a grant to purchase equipment for harvesting or processing the crop, now he will be forced to go for a loan. That is, either the entrepreneur, given the risks, will not produce products at all, or the cost of the final product will include an amount with interest, which he will have to return to the financial institution. Thus, the goods on the shelves of our stores will become more expensive. And this will directly affect every Ukrainian…
So, to summarize, on the one hand, the three months that USAID assistance is suspended for are not a catastrophe. In my opinion, it will simply lead to some new requests. On the other hand, the President of Ukraine stated that the state will compensate for certain losses under certain programs. But these are large amounts of money, and I do not know where our government will get them from in conditions of limited funding.
Ilya Neskhodovsky, economist, head of the analytical department of the ANTS network
