Ratna Juwita, Ph.D (Visiting Research Fellow, Transboundary Legal Studies Department, University of Groningen; Assistant Professor, International Law Department, Universitas Atma Jaya Yogyakarta)

r.juwita rug.nl and ratna.juwita uajy.ac.id

USAID and the Indonesian Health Care System

Before Donald Trump was inaugurated as the 47th President of the United States, Jeff Cohen, the USAID Director in Indonesia, agreed to extend bilateral cooperation with Indonesia until September 2026 (US Embassy in Indonesia, 2024). This extension included an additional $150 million investment from the United States Agency for International Development (USAID) to support various initiatives (Ibid). Given this and 75 years of U.S.-Indonesia cooperation, Trump’s decision to temporarily suspend foreign aid shocked Indonesia (The White House, 2025). Over the years, USAID has implemented 413 programs in Indonesia, spanning sectors such as health and counterterrorism (USAID, 2025). In the health sector, USAID has played a crucial role in eradicating tuberculosis and HIV/AIDS (Ibid). Following the suspension, the USAID website became inaccessible, making it difficult to obtain data on USAID assistance and programs in Indonesia (USAID, 2025).

A legal battle over the aid suspension is ongoing, with a ruling in March blocking the Trump administration from shutting down USAID (BBC, 2025). This decision has polarized U.S. society, with debates over whether the administration’s actions truly serve the country and its global partners. Regardless of the legal outcome, the future of USAID remains uncertain, forcing Indonesia to reconsider how to sustain development programs without it.

The Impact of USAID Suspension on the Indonesian Health Care System

The temporary suspension of USAID has had significant negative effects on Indonesia. These include program terminations, disruptions in development initiatives, setbacks in technology transfer, and reduced cultural exchange. These are key channels through which foreign aid extends influence. In the field of anti-corruption, USAID enforces anti-corruption policies emphasizing transparency and accountability. Notably, it had planned to contribute $9.9 million to Indonesia’s anti-corruption efforts by fostering civic engagement and promoting integrity in both the public and private sectors (US Embassy and Consulates in Indonesia, 2022).

As a result, Indonesia faces two major losses due to the suspension: (1) the reduction in technology transfer and cultural influence related to anti-corruption, and (2) the loss of financial aid intended to support anti-corruption programs. Had USAID continued, its role in fostering institutional interactions between U.S. and Indonesian ministries could have helped Indonesia adopt stronger anti-corruption standards.

In the Indonesian health care system, the suspension of USAID caused concrete negative impacts, including disruptions in medicine supplies and setbacks in the fight against HIV/AIDS, malaria, and tuberculosis (The Conversation, 2025). One of the most impactful USAID-funded programs is the Community Empowerment of People Against Tuberculosis (CEPAT) (Ibid). This initiative has trained over 2,900 health agents, increasing tuberculosis case identification by 20% across six Indonesian provinces (Ibid). However, the continuation of this program is now uncertain, and medical personnel fear that tuberculosis detection and treatment efforts will decline significantly (Ibid). Without USAID, Indonesia’s goal of eliminating tuberculosis by 2030 is now at greater risk due to these challenges.

Moving Forward Without USAID: Prioritising National Capability

Providing foreign aid is not a mandatory obligation for any country. Thus, the U.S. government has the right to suspend USAID. However, the sudden and unexpected nature of the decision has shocked its partners. Indonesia is already facing budgetary constraints, particularly after recording its first fiscal deficit in March 2025 due to Prabowo Subianto’s Makan Bergizi Gratis (Free Nutritious Meals) program for schoolchildren (CNA, 2025). While honourable, the program requires substantial funding, forcing the government to cut spending in other areas (Ibid). As a result, the Indonesian government reduced the 2025 health budget by over $1 million, putting additional pressure on the Ministry of Health to prioritize programs and reallocate resources (Kompas, 2025). The temporary suspension of USAID has further worsened Indonesia’s financial challenges, making it even more difficult to sustain Subianto’s ambitious initiatives.

To address this, Indonesia has been exploring alternative funding sources (Mongabay, 2025). The U.S. withdrawal from aid programs creates a gap that could be filled by other global powers, particularly China. China has demonstrated its commitment to regional influence through initiatives like the Belt and Road Initiative (BRI) and its support during the COVID-19 pandemic, when it donated Sinovac vaccines to Indonesia (Embassy of the People’s Republic of China in the Republic of Indonesia, 2021).  A closer partnership with China may lead to new opportunities for Indonesia’s development, though its long-term implications cannot be precisely predicted. China's investment in Indonesia has already yielded tangible results, such as the Jakarta-Bandung High-Speed Train. Completed in 2022, this project is now being expanded, with plans to extend the railway to Surabaya, East Java (Future Southeast Asia, 2024). The high-speed train has been well received by consumers for its convenience and efficiency. However, with limited alternative funding sources like USAID, Indonesia must adapt by strengthening its financial independence and adopting more strategic budget management to ensure the sustainability of essential development programs.