Aid Freeze Causes Disruption to Well Established Programs

The freeze on U.S. federal aid has thrown numerous developmental programs across Latin America and the Caribbean into disarray, leading many nonprofits to abandon their projects midway.

In El Salvador, Pasionista Social Service (SSPAS), a civil organization that provides technical courses such as IT training, has had to halt three initiatives.

“Yes, three projects have been halted,” stated SSPAS Coordinator Verónica Reyna in an  email to Nearshore Americas.

“One was already in progress; another was recently approved, and another was in the formulation stage. It addressed issues of human rights protection.”

Throughout the country, SSPAS’s Orienta centers—intended to serve as career hubs—are now facing significant challenges.

These centers, which offer job searches, vocational training, and IT courses, are now shrouded in uncertainty.

The repercussions extend beyond Central America. In Colombia, the Ideas for Peace Foundation (FIP), an NGO dedicated to fostering peace and stability through various initiatives and research efforts, is placing all its projects on hold, according to El País.

María Victoria Llorente, the organization’s director, told the Spanish news outlet that the funding freeze created a “very complex situation,” resulting in dozens of her collaborators suspending their contracts.

In Mexico, many immigrant shelters are now functioning without medical staff.

While the aid freeze has understandably outraged numerous humanitarian organizations, most have opted for silence. However, some have voiced their concerns publicly.

Catholic Relief Services, a nonprofit organization, harshly criticized the Trump administration in a statement: “Foreign assistance is not a handout. It is an essential investment to protect life, uphold human dignity, and pursue sustainable solutions to the world’s toughest challenges.”

The United States has a long history of financial support for the region. Between 1946 and 2002, an estimated $104 billion was donated. For fiscal year 2025, the Biden administration sought $2 billion for Central America.

In 2023 alone, U.S. funding for projects reached $1.8 billion, with Colombia receiving the largest share at $389 million, followed by Haiti ($316 million), Venezuela ($205 million), Guatemala ($178 million), Honduras ($144 million), and El Salvador ($138 million). Only Argentina and Uruguay remained outside of USAID’s reach.

What Happened to Private Investment?

Between 2021 and 2022, over $1.2 billion in private sector investments were pledged to Guatemala, Honduras, and El Salvador, aimed primarily at creating jobs and alleviating migration pressures.

Visa committed $270 million to integrate 6 million individuals into the banking system, while apparel giant Gap Inc. promised $150 million to source more materials locally. Microsoft aimed to connect 3 million people to the Internet, and MasterCard focused on expanding formal banking services.

PepsiCo announced a $190 million investment for new production plants, and Parkdale Mills agreed to invest $150 million in a yarn-spinning facility in Honduras. Yet today, there’s radio silence—no follow-ups on whether these financial commitments turned into reality.

The Northern Triangle nations—Guatemala, Honduras, and El Salvador—rely heavily on foreign aid. The U.S. is pushing to reform Guatemala’s criminal justice system, but Washington-based human rights advocacy group WOLA warns that the funding freeze could stifle newly elected President Bernardo Arévalo and civil society groups from exposing corruption and restoring the rule of law.

Already reeling from gang violence and political instability, Honduras faces a critical juncture as U.S. aid freezes threaten to derail November’s high-stakes elections. Vital American funding for electoral safeguards – meant to combat corruption and ensure fair voting – now hangs in the balance.

Colombia: A U.S. Darling at Risk

Cutting aid to Colombia undermines U.S. efforts to address migration, drug trafficking, transnational crime, and instability. Despite a peace agreement with FARC rebels, Colombia continues to be the world’s leading cocaine producer, and the armed conflict persist, challenging the military’s capacity.

Central to U.S. assistance is “Plan Colombia,” initiated in year 2000 to combat narcotics and enhance security. Over the years, this program has expanded to support trade, human rights, and environmental conservation initiatives.

Currently, Colombia is home to over 2.8 million Venezuelan migrants. Without continued aid, their integration could overwhelm the already fragile Colombian government and plunge the nation into deeper chaos.

“Cutting foreign assistance to Colombia contradicts U.S. interests,” warns WOLA. It risks penalizing one of America’s most steadfast economic partners and squandering 25 years of investment in the region.

While the U.S. may eventually restore funding, even a brief 90-day pause can have devastating effects. When Trump froze aid in 2019, 65 out of 168 State Department projects and 92 out of 114 USAID projects were adversely affected, according to the U.S. Government Accountability Office.