Switzerland scales back aid in Bangladesh

News Desk :

After more than 50 years of partnership, Switzerland is ending its bilateral development activities in Bangladesh. The decision has been met with dismay by NGOs and experts alike – especially as the country is already taking a hit from the suspension of funding by USAID.

Switzerland has announced plans to cut CHF 431 million ($484.7 million) from its development cooperation budget over the next four years, following a recent parliamentary decision.

This includes ending partnerships with Bangladesh, Zambia, and Albania by 2028. Other Western nations, including Sweden, France, and the Netherlands, have also reduced foreign aid. The United States is cutting billions in aid, impacting Bangladesh’s Rohingya refugee camps. However, Switzerland’s withdrawal is more gradual.

Former Swiss ambassador to Bangladesh, René Holenstein, has criticised Switzerland’s approach, stating it was imposed on Bangladesh without consultation.

He argues that the decision contradicts the 2005 Paris Declaration on Aid Effectiveness, which Switzerland has signed. The Swiss Agency for Development and Cooperation (SDC) will maintain a presence in Bangladesh in climate change, migration, and humanitarian aid, shifting to a regional approach. However, Holenstein warns that this does not constitute a meaningful commitment, as Bangladesh seeks equal partnerships rather than reliance on humanitarian aid.

Bilateral development cooperation has played a crucial role in Bangladesh, supporting long-term sustainability programmes. Holenstein describes it as the “DNA of Swiss development policy.” Since Foreign Minister Ignazio Cassis took office in 2017, Switzerland has reduced the number of priority countries from 46 to 34 and cut bilateral aid by around 10%. The shift prioritises domestic political interests over foreign policy commitments, focusing on regions with migrant flows affecting Switzerland rather than Bangladesh.

Concerns have been raised that Bangladesh may become more dependent on China, which has invested nearly $21 billion in infrastructure projects there. Switzerland’s past focus on democracy, minority rights, and the rule of law is unlikely to be a priority for Beijing.

Swiss-funded programmes have supported schools, agricultural supply chains, small businesses, and civil rights, and their discontinuation will affect local communities.

Switzerland’s decision has surprised partner organisations in Bangladesh. Talha Paksoy, from Solidar Suisse, argues there is no valid reason for withdrawing aid, highlighting Bangladesh’s challenges, including political instability, high inflation, youth unemployment, climate change, and the Rohingya crisis.

The Swiss Red Cross disputes the government’s claim that “actual needs on the ground” justify the cuts, noting that extreme poverty is rising despite Bangladesh’s progress towards graduating from the least developed countries (LDC) classification by 2026.

NGOs have yet to fully assess the impact of Switzerland’s withdrawal, but most SDC-funded projects have not been approved beyond 2028. One potential exception is the CALL climate protection project, which has funding until 2026 but could be extended as it aligns with SDC’s revised focus areas.

Paksoy warns that widespread development aid cuts may trigger a domino effect, undermining humanitarian efforts globally. Switzerland, as a host to numerous UN agencies, risks sending a negative signal internationally.

Barbara Hintermann, director of Terre des Hommes, warns that international solidarity is weakening. While she acknowledges the need for aid system reforms, she argues that they should not come at the expense of vulnerable populations. Some recipient countries are advocating for greater autonomy, a movement known as localisation, but Hintermann insists reforms should not cause crises.

Several Swiss NGOs and church organisations have urged Foreign Minister Cassis to ensure that wealthy nations fulfil their obligations to the world’s poorest communities. Martin Swinchatt, from Terre des hommes in Bangladesh, questions Switzerland’s decision but notes that its gradual withdrawal is preferable to the abrupt halt in US aid.

The suspension of US funds has severely disrupted Rohingya refugee services, including psychological support for children, clean water provision, and sanitation. It has also resulted in 80 job losses at Terre des Hommes. Swinchatt acknowledges that, at the very least, Switzerland is providing organisations time to adjust over the next four years.