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How Bangladesh’s local NGOs are surviving the foreign aid collapse
The organisations with deep roots in Bangladesh’s communities that had spent decades building trust—now face a new reality—they are competing with large international organisations for the same small grants that had once been their exclusive lifeblood
Illustration: TBS
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Illustration: TBS
On the night of 31 January 2025, AKM Tariful Islam Khan, senior manager of communications at the International Centre for Diarrhoeal Disease Research, Bangladesh (icddr,b), sent a statement to reporters that marked the start of an unravelling in the country’s development sector.
“As per the directive of the US government, we have suspended projects and research funded by them until further notice,” Khan said. “We express our sympathy and regret for any inconvenience caused to our service recipients, various stakeholders, and colleagues.”
But behind the apology were more than 1,000 termination letters — becoming the single largest casualty of the USAID shutdown in Bangladesh. But it was only the beginning.
Gradually, more than 100 development projects worth $550 million were suspended in Bangladesh. Over 20,000 people lost their jobs almost overnight. And beneath those numbers, a quieter, slower process began — one that is reshaping who gets to do development work in this country, and who gets crowded out.
One year past, the question is: how are those who survived managing to stay afloat?
Survival in many forms
Md Maksudur Rahman, the Chief Executive of the Bangladesh Environment and Development Society (BEDS), a local NGO in Khulna, never received USAID funding directly for his organisation. But when the international aid stopped in early 2025, the shock wave came anyway, through the donors his donors relied on.
“A sudden decision is like a heart attack,” he said.
For BEDS, the shock was immediate but not terminal. The organisation did not collapse; it adapted. However, for BEDS, the adaptation has been longer in the making. Rahman has spent a decade building a social business model — branding and marketing community agricultural products to generate revenue that does not depend on foreign grants.
“When a project is dependent,” he says, “everything ends when the project ends.” It has given BEDS a floor that many organisations do not have. But he is clear about the limits. “The large sectors that have become established will stay; the rest will fall away.”
To be honest, it happened. Many organisations failed to survive.
Some have quietly shut field offices, stopped hiring, and are waiting to see if anything comes through. The ones still running are doing it differently than before. The most common shift: replacing permanent staff with consultants.
Organisations that once employed programme officers and field coordinators on long-term contracts now bring them in project by project, paying per deliverable, carrying no liability when the funding ends. The work still gets done — sometimes — but institutional knowledge does not accumulate. Each engagement starts from near zero.
Localisation as a lifeline
A path some organisations are betting on is localisation. Donors cutting overall aid are increasingly insisting that what remains goes directly to local organisations, not international intermediaries.
When a local NGO competes directly with an international organisation, donor preference now often goes to the local one. Some consortiums have flipped the old hierarchy entirely, with a small national organisation holding the grant and sub-contracting work to a large international NGO.
For the right organisation — one with existing donor relationships, a credible track record, and the administrative capacity to manage a grant directly — localisation is a genuine lifeline.
“Eventually, a time will come when this funding will decrease. This is a reality. Maybe this trend will last another 20 years. But what after 20 years? Will this sector sustain then? We need to build a self-sustaining model that can withstand such fund shortages.”
Maksudur Rahman, Development Professional
The problem is that the organisations most likely to meet those criteria are the larger, more established national NGOs. The twelve-person women’s cooperative in Satkhira, or the community-based environmental group in Khulna that never needed to think about compliance frameworks, does not have the same access to that door.
Asif Saleh, Executive Director of BRAC, made the point clear in the context of climate finance, “Only 10% have reached the intended, most vulnerable communities, and only 6% have supported locally-led approaches.”
Even BRAC, despite three years of trying, had been unable to access the climate funding it needed. If BRAC cannot get through, the implication for the smaller ones is obvious.
A new reality for local NGOs
The organisations with deep roots in Bangladesh’s communities that had spent decades building trust—now face a new reality. They are competing with large international organisations for the small grants that had once been their exclusive lifeblood.
Zinat Ara Afroze, a former convenor of the Association of Unemployed Development Professionals and now an international consultant, watched it happen across professional networks.
“Due to the current crisis, larger organisations are now moving into the space traditionally occupied by smaller, local NGOs,” she said. “They are starting to compete for the smaller projects that used to be the lifeline for local organisations.”
Syed Aminur Rahman, a development professional, added a quantitative perspective, “Previously, a large organisation wouldn’t look at a project worth less than $2 million. Now, they are aggressively competing for $100,000 projects just to survive.”
Meanwhile, the international consulting firms that had built entire operations in Bangladesh on USAID funding simply left. Chemonics International and Tetra Tech shut their Bangladesh offices entirely. ACDI/VOCA declared dissolution. Their exit was clean and visible; what they left behind — smaller organisations now fighting BRAC and Save the Children for what remained — was neither.
Rahman also mentioned this new phenomenon. He found it unexpected that senior USAID project managers — people who had spent careers leading multi-million-dollar programmes — “even knocked on our small organisation’s door to see if there were any consultancy opportunities or any scope to survive.”
What happened to the development workers
Adib Khan, a programme manager at an international NGO, spent five months searching before finding another job — at the same organisation, but demoted to senior officer. He sent his family back to Mymensingh and is now based in Cox’s Bazar on a project.
“I’m constantly anxious about what comes next,” he said. When he applied to the corporate sector, companies saw his NGO background and did not call back.
Samia Alam, a communications lead, lost her job the same night her team heard the project had shut down. Ten months later she was still unemployed, living at her father’s house, raising her daughter alone.
“It felt like the sky had fallen on my head,” she said. “My life was going well with my job and my daughter, and now it’s all gone.” She is considering leaving her field entirely, though in a sluggish economy that is not straightforward either.
Rayhan Maruf worked for 10 years at a well-known INGO before the shutdown left him jobless. Six months in, with his father undergoing cancer treatment, he used his savings to try importing Pakistani clothes. The market was too saturated. He has not recovered financially, and neither has his father.
Samin Hossain, a former gender specialist, is now freelancing. “For now, I’m doing consultancy work, but I don’t know how long that will sustain me,” she said. “What seems most realistic for me and my family is to leave the country eventually.”
A K M Musha, who served as Country Director of Helen Keller International in Bangladesh, left after leading the organisation through a major downsizing following the closure of three large USAID projects. He announced he would spend his break offering free advisory services to local NGOs — a senior figure with nowhere obvious to go, volunteering his experience to organisations that could not afford to pay for it.
Tony Michel Gomes, former Director of PR and Communications at CARE Bangladesh, told TBS, “the higher your position was, the harder it became to find a new job. Years of experience and hard-earned skills are not paying off.”
The sector did not contract and redistribute. It contracted and disappeared.
A wake-up call
Dr Fahmida Khatun, Executive Director of the Centre for Policy Dialogue (CPD), described the structural squeeze on low-income countries as a combination of “shrinking aid budgets and a slowdown in global growth.”
She was also explicit about what happens to civil society when political and funding pressures tighten simultaneously.
“Political polarisation has significantly impacted the regulatory environment for NGOs and CSOs, with a decline in policymakers’ tolerance for objective criticism, leading to the use of new laws as a censorship tool.”
For local NGOs, squeezed on funding from one side and regulatory space from the other, the room to operate independently has rarely been smaller.
Maksudur Rahman is not pessimistic, exactly. He has watched enough funding cycles to know that sectors survive. But he is clear-eyed about what that survival will require.
“Eventually, a time will come when this funding will decrease. This is a reality. Maybe this trend will last another 20 years. But what after 20 years? Will this sector sustain then?” he said. “We need to build a self-sustaining model that can withstand such fund shortages.”
Word of the move, which has not been previously reported, coincides with the final stages of broader negotiations between Tehran and Washington on ending the war
People ride past a mural depicting the late leader of the Islamic Revolution, Ayatollah Ruhollah Khomeini, and the late Iran’s Supreme Leader Ayatollah Ali Khamenei, on a street in Tehran, Iran, June 9, 2026. Majid Asgaripour/WANA (West Asia News Agency) via REUTERS
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People ride past a mural depicting the late leader of the Islamic Revolution, Ayatollah Ruhollah Khomeini, and the late Iran’s Supreme Leader Ayatollah Ali Khamenei, on a street in Tehran, Iran, June 9, 2026. Majid Asgaripour/WANA (West Asia News Agency) via REUTERS
Highlights
- Two sources say at least $10 billion to be unlocked under deal
- First $3 billion tranche already sent, sources say
- Deal includes revived economic ties, source says
- UAE official says Gulf state aims to ease regional tensions
- Iran sought similar pact with two other Gulf states, source says
The United Arab Emirates has agreed to unlock billions of dollars for Iran, four sources said, in a tactical shift after weeks of Iranian attacks on the wealthy Gulf Arab state during the US-Israeli war with the Islamic Republic.
Word of the move, which has not been previously reported, coincides with the final stages of broader negotiations between Tehran and Washington on ending the war, talks that diplomats say could involve the release of tens of billions of dollars in Iranian oil revenues frozen in foreign banks under US sanctions.
Two regional sources told Reuters the UAE had agreed to release a total of $10 billion, more than $3 billion of which had already been delivered.
Two other sources with knowledge of the arrangement put the total funds involved at $20 billion, adding that the move had been agreed in return for a halt to Iranian attacks on the UAE.
One of the sources with knowledge of the arrangement also said a first tranche of $3 billion had already been made available.
Reuters could not establish whether the funds earmarked for the transfers belong to the UAE or originate in long-blocked Iranian accounts in the UAE banking system, or elsewhere.
The UAE foreign ministry issued a statement early on Saturday categorically denying reports of the transfer “including allegations concerning $3 billion”.
The UAE statement affirmed that these allegations are entirely false and unfounded, stressing that no frozen Iranian funds have been released, transferred or facilitated through the UAE.
The UAE statement did not provide any further specifics.
Earlier, when asked by Reuters to comment on the transfer, a UAE official said the country was trying to ease tension and foster peace.
“The UAE’s foreign policy is guided by promoting de-escalation and reducing tensions across the region, while advancing lasting peace and stability,” the official said. “The UAE supports efforts, including those undertaken by the United States, to protect the peoples of the region from the repercussions of conflict.”
Iran last attacked the UAE directly on 4 May
The White House did not immediately respond to a request for comment on the move.
In Washington, Vice President JD Vance said on Friday that funds would not be released to Iran for signing a deal with the US or attending a meeting, adding that the potential deal is structured to ensure that economic benefits would flow to Tehran if it meets its obligations.
There was no immediate response from Iranian authorities to a Reuters request for comment on the move.
None of the sources cited in this article would agree to be identified due to the sensitivity of the matter.
The arrangement signals a striking pivot from the open animosity of UAE-Iran relations through much of the war, when Iranian attacks emptied Dubai’s hotels, drove some expatriates to flee and shook the reputation for safety that is central to the country’s position as a premier business hub.
One of the sources with knowledge of the arrangement said the move offered a way to help solve the conflict between the US and Iran without either side crossing its red line: Iran can claim it extracted compensation for war damages, Washington can insist it paid nothing, and Abu Dhabi obtains its own security and Dubai’s hub status, while framing the move as an investment in rebuilding regional trust.
The other source with knowledge of the arrangement said that in return for the disbursement, Iran would halt missile and drone attacks on the UAE, and there would be a rebuilding of bilateral ties, including intelligence sharing and economic cooperation.
The source added that Iran had approached at least two other Gulf Arab countries to make a similar arrangement.
The last known direct attack by Iran on the UAE was more than a month ago – a 4 May strike on the Gulf state’s Fujairah port on the Gulf of Oman.
The first source with knowledge of the arrangement said talks had started several weeks ago but quickened pace when officials of Iran’s powerful Revolutionary Guards visited Abu Dhabi last week to meet Sheikh Tahnoun bin Zayed al Nahyan, the UAE’s national security adviser and deputy ruler of Abu Dhabi, and stayed at his guest house.
That trip was followed by a visit by UAE officials to Tehran to negotiate the details of the mechanism.
Sizeable Iranian assets in Dubai
The UAE-Iranian arrangement is set to unfold against a complex financial backdrop potentially involving Dubai, the UAE’s main commercial hub and one of Tehran’s most critical economic lifelines.
Dubai’s banks have long held substantial Iranian-linked deposits, much of them now immobilised under US sanctions that police the global dollar-clearing system and expose any foreign bank dealing with blacklisted Iranian entities to being cut off from the American financial network.
On 11 April, a senior Iranian source said that the US had agreed to release Iranian frozen assets held in Qatar and other foreign banks, although a US official swiftly denied the assertion.
The source, who declined to be named due to the sensitivity of the matter, told Reuters that unfreezing the assets was “directly linked to ensuring safe passage through the Strait of Hormuz”, a key issue in talks aimed at ending the conflict.
According to the state-affiliated Fars news agency, the designation includes SpaceX’s Starlink satellite internet service and its regional ground stations
Source link
The terms of the so-called memorandum of understanding include reopening the Strait of Hormuz and lifting the US blockade on Iranian ports, the US official told reporters, adding that the deal met President Donald Trump’s core objectives and put negotiations “in a very, very good place.”
Chess pieces are seen in front of displayed Iran’s and US flags in this illustration taken January 25, 2022. REUTERS/Dado Ruvic/Illustration
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Chess pieces are seen in front of displayed Iran’s and US flags in this illustration taken January 25, 2022. REUTERS/Dado Ruvic/Illustration
Summary
- Washington expects initial deal in coming days, US official says
- Pakistan PM says text of a deal has been finalised
- Trump calls reports of terms that favour Iran ‘fake news’
- Deal as outlined by Western, Iranian, Pakistani sources appears to match terms originally proposed by Tehran
- Western source says deal could be signed as soon as Sunday
The United States and Iran signalled yesterday (12 June) that an agreement to end their war was close, with a senior US administration official saying both sides had agreed on a text and that Washington expects to sign an initial deal in the coming days.
Iran’s decision-making bodies were meeting to discuss the memorandum, Iran’s foreign ministry spokesperson said.
The terms of the so-called memorandum of understanding include reopening the Strait of Hormuz and lifting the US blockade on Iranian ports, the US official told reporters, adding that the deal met President Donald Trump’s core objectives and put negotiations “in a very, very good place.”
Leaked terms of the proposed memorandum outlined by Western, Pakistani and Iranian sources earlier yesterday appeared to favour Iran, drawing criticism from Trump, who dismissed the reports as inaccurate.
While there were minor differences in the accounts, all appeared to offer Tehran much of what it has demanded so far, with Trump appearing to win little of what he has sought beyond the reopening of the strait, which Iran shut after the US and Israel launched attacks in February.
The US official, however, said the agreement would ultimately lead to the dismantling of Iran’s nuclear programme, with its stockpile of highly enriched uranium to be destroyed and removed – a key US demand.
Trump also reposted comments by Iranian Foreign Minister Abbas Araqchi, who said a memorandum to end the war had “never been closer.”
Pakistan, which has for weeks sought to broker a deal, said a final text had been settled upon. “Pakistan is now working closely with both sides to finalise the next steps,” Prime Minister Shehbaz Sharif said in a post on X.
WHAT’S IN THE DEAL?
Draft terms of the deal described to Reuters by multiple sources indicate that the US would immediately begin releasing billions of dollars in frozen Iranian assets and waive sanctions on its oil exports, in return for Iran opening the strait.
Discussion of Iran’s nuclear programme would be set aside for a 60-day period of talks on a final settlement, they said. The proposals include discussion of possible war reparations for Tehran and dropping longstanding US demands for limits on Iran’s missile programme, the sources said.
Washington has repeatedly demanded Iran give up its stockpile of highly enriched uranium. Another senior US official, describing the agreement, said the uranium stockpile “will be destroyed and removed” and Iran’s nuclear programme would be dismantled.
“None of their money released until they perform. Strait of Hormuz will be open. No Iran funding of terrorist groups,” the official said. “This is what they have agreed to. This is a performance-based deal.”
Vice President JD Vance said on X: “First, the Iranians are not receiving any cash, and no funds are being released for simply signing a deal or attending a meeting.”
The deal ensures economic benefits would only flow to Iran if it meets its obligations under the agreement, he said.
ISRAEL NOT PARTY TO MEMORANDUM
A Western source said that if language can be agreed, the memorandum could be signed as soon as Sunday by Vance and Iran’s parliament speaker, Mohammad Baqer Qalibaf, with Geneva seen as the likeliest venue.
The US administration official said Europe had been discussed as a venue for signing but no decision had been made.
Israel, which launched the war alongside the United States, has not been part of the negotiations. Prime Minister Benjamin Netanyahu said his country would not be party to the memorandum.
Netanyahu has clashed with Trump in recent weeks over US demands that Israel curb military action in Lebanon to let Washington reach a deal with Tehran.
Israel’s defence minister said Israel would not withdraw from territory in Lebanon. A senior Israeli official said Israel expects under any deal to retain its freedom to act against what it deems threats in areas under its control.
OIL PRICE FALLS
The progress towards an agreement has emerged at the end of a week that brought a sharp escalation in hostilities in the Gulf, including Israeli-Iranian exchanges of fire and US strikes on Iranian targets, followed by retaliation against US bases.
Indications of a potential deal prompted global shares to rally and oil prices to slip. Brent crude prices were down more than 3% at their lowest in nearly two months.
The conflict has become a political headache for the White House, amid rising fuel prices and slipping approval ratings for Trump.
Some Republicans worry that the war’s unpopularity could cost them control of Congress in November’s midterm elections. But many Republicans hold hawkish positions on Iran and could have difficulty endorsing an agreement viewed as yielding concessions.
Tehran has always said its nuclear programme is peaceful and accepted tight curbs on it in return for the lifting of sanctions under a 2015 agreement with the administration of then-US President Barack Obama.
Trump abandoned that deal during his first term in 2018 and Iran responded by ramping up its enrichment of uranium, producing more than 400 kg (around 900 pounds) of material at close to the purity needed to make a bomb.
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