Fears funding gap left by USAID cuts could be filled by China

Communities are bearing the brunt of sweeping USAID cuts in the Pacific, with concerns the absence of the United States will open the way for Chinese aid.

It's been two months since US President Donald Trump announced a freeze on its overseas development programmes with thousands of contracts terminated.

While a federal court judge has ruled the administration's actions were an overreach of the executive branch's power, Secretary of State Marco Rubio said 83% of the aid projects have been cancelled, throwing uncertainty into the mix.

Caritas Aotearoa New Zealand chief executive Mena Antonio said partners across the Pacific had numerous projects which had "come to a sudden halt".

These include medical supplies, accessing fresh water, sanitation, illegal fishing prevention, and disaster preparedness work.

"We see the pain and anxiety that it causes in communities... these programmes are about water, about fresh water, it's about food, it's about livelihoods. These essentials of life have been disrupted in a significant way."

Antonio said New Zealand's model of delivering aid via grants and not debt is the preferred method.

"What we don't want to see is a trend that we're seeing in the UK where they've just cut and announced they're cutting aid by 40% and directing that to defence and that's the sort of model that we are really wanting to object to," she said.

Between 2008-2022, the US put in NZ$3.74 billion of aid into the Pacific region.

Foreign Minister Winston Peters is in the US hoping for answers from the Trump administration.

"One of the reasons why we are here is to find out what is the change of position the Americans have announced? What does it mean for the Pacific? And the second thing is what does it mean for the rest of us in terms of filling any gap or vacuum? It is so massive," he said.

"It leaves the Pacific seriously exposed unless, of course, like-minded countries in the Indo-Pacific step up."

According to the Lowy Institute, between 2008-2022, Australia put in NZ$20.7 billion – 40% of all aid into the region – followed by China's NZ$4.95 billion.

Other European countries are also slashing their aid budgets, although none as dramatic as the US, leaving concerns that China will use this as an opportunity to destabilise the region.

Chantelle Khan from the Fiji Social Empowerment Education Programme said a question that needed to be asked was whether militarisation of the Pacific region was now a reality.

"Because desperate countries that have responded to what's happening on the ground may make quite drastic decisions that may affect what's going to happen in the future."