The recent suspension of multimillion-dollar U.S. funding through the U.S. Agency for International Development (USAID) and the Department of State for Nepal has sparked mixed reactions, with some Nepalis even celebrating the decision. U.S. President Donald Trump’s Executive Order has led to the temporary suspension of $550 million in Millennium Challenge Corporation (MCC) funding for Nepal, impacting crucial infrastructure and energy projects under the Millennium Challenge Account (MCA) Nepal. Recently, the U.S. Department of Government Efficiency (DOGE) also announced the cancellation of various foreign aid programs, including two initiatives in Nepal: a $20 million program for “fiscal federalism” and a $19 million project for “biodiversity conservation.”
US taxpayer dollars were going to be spent on the following items, all which have been cancelled:
– $10M for “Mozambique voluntary medical male circumcision”
– $9.7M for UC Berkeley to develop “a cohort of Cambodian youth with enterprise driven skills”
– $2.3M for “strengthening…— Department of Government Efficiency (@DOGE) February 15, 2025
Maryland-based Nepali-origin social activist Lok Tiwari, who closely follows Nepali politics, shared his perspective on why certain groups in Nepal view this move positively. According to Tiwari, many Nepalis have long been dependent on foreign aid and external funding. He argues that projects initiated through self-funding rather than foreign grants could be more effective and sustainable. “Instead of relying on foreign aid and waiting for handouts, Nepalis should take the initiative to fund and implement projects themselves,” he said. “A project built with our own resources has a greater sense of ownership and is less prone to external influence.”
One of the primary reasons for celebration is the rise of nationalism. Some individuals believe that a truly independent nation should rely on its own resources rather than seeking financial aid from foreign entities. They see this as an opportunity to foster self-sufficiency and reduce external influence in Nepal’s economic and political affairs. “Many nationalist-minded people believe that depending on external funding makes a country weak and vulnerable to foreign intervention,” Tiwari explained. “They see this funding suspension as a chance for Nepal to build its own future.”
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Political polarization has also played a significant role in shaping public perception. The controversy surrounding U.S.-funded projects, especially the Millennium Challenge Corporation (MCC) grant, has deepened divisions within Nepal. Those who opposed MCC on nationalist grounds now view the funding suspension as a victory, reinforcing their belief that Nepal should stand on its own. Additionally, anti-American sentiments are prevalent among certain groups. Some fear that accepting U.S. assistance increases American intervention in Nepal, with extreme concerns even suggesting that it could lead to the presence of U.S. military forces in the country.
Some also believe that Nepal should seek financial support from China instead of the U.S. They argue that American assistance comes with hidden political conditions, whereas they perceive Chinese aid as being less intrusive. “There are people who think Nepal should take financial help from China instead of the U.S.,” Tiwari noted. “They believe Chinese support comes with fewer strings attached, while American aid often leads to political pressure.”
Misinformation and disinformation have also contributed to the celebrations. Many people are unaware of the actual implications of the funding suspension and believe it to be a step toward greater national sovereignty. This has led to misguided celebrations among those who assume that Nepal is now free from foreign influence.
Concerns over corruption have further fueled opposition to foreign aid. A widespread belief exists that large-scale foreign-funded projects in Nepal are plagued by corruption and mismanagement. Many people assume that these funds are often misused by politicians and elites, leading them to believe that stopping such inflows could reduce financial misappropriation.
Corruption remains a widespread issue in Nepal, deeply ingrained in various sectors such as government, judiciary, police, health services, and education. This corruption not only hampers the country’s development but also undermines public trust. According to Transparency International’s 2024 Corruption Perceptions Index, Nepal scored 34 out of 100, ranking 107th out of 180 countries. In comparison, Nepal scored 35 out of 100 and ranked 108th in the 2023 index. In the Asia Pacific region, where the average score is 45, Nepal lags behind nations like Bhutan and India, but fares better than countries such as Pakistan and Bangladesh.
Radha Krishna Deuja, a Nepali resident of New York who analyzes Nepali politics and writes articles on various subjects, also weighed in on the issue. He pointed out that there is a growing problem in Nepal where people tend to focus more on rumors than facts. “It is with sadness that I must say the problem of Nepalis being more influenced by rumors than by facts is growing,” Deuja said.
“Right now, with the new president in the U.S., Trump, one of the actions he’s taking to prove himself is the reduction of foreign aid that the U.S. has been providing. During this period, the amount of aid pledged to Nepal has also been reduced, and according to Nepal’s Ministry of Finance, the aid that President Donald Trump mentioned has not even arrived yet,” Deuja stressed, emphasizing the importance of analyzing the situation instead of blindly reacting.
“Blindly supporting or opposing the aid cuts without understanding the full context is wrong,” he explained. “Saying that no aid should come because corrupt people misuse it is like saying that since some people drink alcohol from rice, we should stop rice farming altogether. That kind of approach makes no sense.”
Tiwari also pointed out that U.S. President Donald Trump’s policies have pushed developing nations toward self-reliance by making foreign aid less accessible. He believes that this shift, while challenging, could ultimately lead to global economic transformation. “Trump’s policies have forced dependent nations to seek alternatives,” Tiwari said. “Now, some Nepalis see this as a necessary push to become more self-reliant.”
New York-based Nepali resident Anand Bist, who has been actively involved in Nepali politics for a long time, also weighed in on the issue. He believes that there is no reason to celebrate the suspension of aid. “There is no reason to be happy about the suspension of aid to Nepal,” Bist said. “The United States has had a long diplomatic relationship with Nepal, and countries like the U.S. and various countries and organizations have provided support. The U.S. has historically supported weaker nations. In this context, it is the responsibility of the U.S. to ensure that the aid given to Nepal is used properly.”
Bist emphasized that it is also the U.S.’s responsibility to check whether aid has been used correctly. “It is also the U.S.’s responsibility to check if the aid has been used in the right places,” he said. “Those celebrating the suspension of aid are doing so out of ignorance. There is no reason to celebrate. If there is any corruption, a fair investigation should be demanded.”
Bist also pointed out that there are powers seeking to disrupt the relationship between the U.S. and Nepal. “There are powers that wish to see the relationship between the U.S. and Nepal deteriorate,” he said. “Political polarization in Nepal has also influenced this issue.”
While the funding suspension has raised concerns about the potential impact on Nepal’s development projects, for those celebrating, it is seen as a step toward greater independence—however complex the reality may be.
Kishor Panthi
View More PostsKishor Panthi is the founder and editor-in-chief of Khasokhas and NepYork. He is the author of three books, “Kampan,” "UNTRANSLATABLE" and “Zero Mile.” He writes about social issues, immigration, and politics.
