U.S. Foreign Aid Cuts Include Up to $2.3 Billion for Migration Management and Displacement Programs, MPI Analysis Finds

WASHINGTON, DC — Up to $2.3 billion in migration-related awards and grants, including $200 million specifically focused on deterring irregular migration from Central America, appear on leaked lists shared with Congress of terminated foreign aid from the U.S. Agency for International Development (USAID) and State Department, a Migration Policy Institute (MPI) review shows.

A new short read out today examines how foreign aid cuts by the U.S. government, accompanied by similar rollbacks by the European Union and multiple national governments in Europe, could have potentially serious and unintended consequences for how governments around the world manage migration and address displacement.

“While the loss of aid-supported projects likely would not trigger mass migration, in particular to the West, it will have the effect of limiting governments’ tools to manage mixed migration, in ways that cannot be easily reversed,” Lawrence Huang, Samuel Davidoff-Gore and Susan Fratzke of MPI’s International Program write.

The analysts outline three possible scenarios that could result from the U.S. retrenchment:

1. The near-death of foreign assistance: If the U.S. cuts occur in their most extreme form, other donor countries may not have the capacity or political will to fill the gap, in particular European donors needing to identify spending cuts as they come under significant pressure to increase their defense budgets. The costs in this scenario “would be immense,” the authors note, amplifying instability in existing displacement crises and reducing options for displaced people to stay in their region.
2. Temporary stopgaps paper over structural problems: Other high-income countries could step in to temporarily fill the vacuum left by the U.S. cuts but would face the same long-term funding pressures. They also would not be able to leverage an international humanitarian protection architecture weakened by the loss of U.S. backing, financial and otherwise, leading to less effective and efficient systems.
3. Funding shocks open a window for reform: The cuts could catalyze efforts to make foreign aid more impactful, sustainable and cost effective. Long-discussed innovations such as greater private-sector involvement in funding livelihood and skilling programs for migrants, refugees (or sponsors) taking on loans to fund their resettlement and conditioning aid to policy reforms in refugee host countries could result in a leaner, more effective system to manage migration around the world.

“Avoiding scenario one and the long-term costs of scenario two necessitates leadership and prompt coordination to make scenario three a reality,” the authors suggest.

Read the short read, Can Innovation Help Blunt the Impact of Foreign Aid Cuts on Migration Management Programs?, here: www.migrationpolicy.org/news/foreign-aid-cuts-migration-management.