US President Donald Trump's decision to shut down the US Agency for International Development (USAID) is expected to have adverse effects on Yemen's humanitarian and developmental situation.

The agency has been pivotal in supporting policy improvements, good governance, and local community empowerment, especially in light of the country's dire economic conditions caused by war and unrest.

Yemen is currently facing the worst humanitarian crisis in modern history, with the United Nations reporting millions of people affected.

Warnings are mounting over worsening food security and the increasing number of people needing aid, as the local currency collapses, prices soar, and diseases and epidemics spread.

Health and education systems are in disarray, and women and children, particularly in displacement camps, are bearing the brunt of the crisis.

While government officials and local civil society organizations fear the potentially harmful impact of Trump’s decision on vital development projects in health, education, food security, and social and economic protection for women and children, a senior Yemeni official from the Ministry of Planning and International Cooperation believes the decision will not directly affect government programs and activities.

The source, who requested anonymity, told Asharq Al-Awsat that USAID funding does not enter the Yemeni government’s budget. The government also lacks full authority to implement, manage, or even oversee the development projects funded by the agency.

The source revealed that the parties responsible for implementing these projects—USAID, the World Bank, and UN agencies—are the ones that determine the nature, locations, and operational budgets of the projects. Government input is typically considered only in the narrowest of circumstances.

In April, the Yemeni government signed a five-year agreement with USAID to provide aid. However, the new US administration’s decision effectively renders this agreement null and void.