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Double blow for Bangladesh as Switzerland cuts foreign aid after Trump halts funding for Dhaka

In what comes as a double blow to Bangladesh, the Swiss government also decided to cut foreign aid to Dhaka following Trump's action to halt support for the South Asian country. The decision will also impact two other countries—Albania and Zambia.

Muhammad Yunus
Muhammad Yunus Image Source : AP
Bern (Switzerland)Published: , Updated:

Days after the United States donor agency, the United States Agency for International Development (USAID), decided to halt its funding to Bangladesh, the Swiss government is also ending its development aid programmes in the South Asian country. This implies that the Swiss Agency for Development and Cooperation (SDC) will halt its bilateral development programmes in Bangladesh by the end of 2028. The decision will also impact two other countries, Albania and Zambia. 

Why did Switzerland take that decision? 

The decision comes after the Swiss parliament allocated less funding for foreign aid in December than the government had requested, according to a report by swissinfo.ch. According to the report, the parliament reduced CHF110 million ($121 million) from the 2025 international cooperation budget, while the financial plan for 2026 to 2028 saw a cut of CHF321 million.

Switzerland’s executive body, the Federal Council, was briefed about the reductions in international cooperation on Wednesday. 

US halts funding for Bangladesh

Earlier, in a letter issued to USAID/Bangladesh implementing partners, the US donor agency directed them to "immediately stop or suspend any work under USAID/Bangladesh contract, work order, grant, cooperative agreement, or other assistance or acquisition instrument."

The suspension is being seen as part of a broader review of foreign aid allocation. The order covers all existing foreign assistance, barring military financing to Israel and Egypt. The move is likely to halt critical aid programs as it will ensure that billions of dollars in life-saving assistance are put on hold.

Trains cancelled across Bangladesh: Is it a sign of dwindling economy?

In related developments to Bangladesh, trains across the country were cancelled on Tuesday as railway staff went on strike for higher pensions and other benefits, affecting tens of thousands of passengers and freight transport.

Dhaka-based Jamuna TV station reported that railway workers protested in Chattogram, the country's second-largest city. The southeastern city has the country's largest seaport, and the massive garment industry relies on trains to bring goods to it for export. The industry earns about USD 38 billion a year from exports, mainly to the United States and the European Union.

Also Read | Bangladesh's Yunus government in big trouble as Trump freezes funding for aid programmes

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