Foreign aid reductions by the United States have resulted in the loss of approximately 280,000 jobs within the global aid sector over the past year. In Nepal, these funding cuts to USAID-backed programs have led to the closure of several non-governmental organizations and community outreach centers. Former employees of these programs reported that the sudden loss of income has forced some individuals to enter the sex trade to meet basic living expenses.
The budget cuts followed administrative shifts in U.S. foreign policy that prioritized domestic spending over international assistance. This included the reinstatement and expansion of the "Mexico City Policy," which prohibits U.S. funding for organizations that provide or discuss abortion services. Local officials in Nepal stated that the resulting service gaps have impacted public health initiatives related to HIV prevention and maternal care.
Proponents of the budget cuts argued that reducing foreign aid is necessary to ensure fiscal responsibility and prioritize American interests. Critics, however, stated that the withdrawal of funds destabilizes vulnerable populations and undermines long-term development goals. In Nepal, community leaders indicated that the loss of formal employment and social support networks has left former aid workers with few economic alternatives.