The abrupt suspension of U.S. Agency for International Development (USAID) funding by the new Donald Trump administration in early 2025 has cast a dark shadow over Mongolia’s civil society and geopolitical balance.
The aid freeze is affecting many local actors who were delivering essential services and advocacy support on sensitive and often overlooked social issues critical to human rights and democracy. While Mongolia has made significant progress since it transitioned to democracy in 1990, certain social issues remain marginalized due political or cultural sensitivities. Projects and programs tackling these issues, including religious freedom, human trafficking, freedom of expression, and rural civic space, are now in funding crises.
What does the aid freeze mean on a practical level? More broadly, what does it mean for the geopolitical balance Mongolia maintains?
Already Silent Issues at Risk of Disappearing
The Youth Policy Watch Group, a local NGO that works on human rights, gender, and governance by utilizing youth-led monitoring and accountability tools, pioneered a project to map out the landscape of religious civil society groups. This initiative aimed to promote peaceful coexistence and collaboration with diverse religious actors, including the mainstream Buddhist monasteries, Christian groups, and Muslim minorities. The project had also planned to build the knowledge and capacity of government employees on religious freedom, addressing critical research and data gaps to promote evidence-based legal and policy decisions.
The 2023 ACN International report highlighted recurring issues on the registration of religious organizations, such as legal and social barriers faced by religious minorities in the country. This underscores the importance of the watch group’s initiative, which was 70 percent complete before being fully halted by the USAID freeze.
This leaves a significant knowledge gap in promoting religious understanding and coexistence. Youth Policy Watch Group’s director, Mandkhaikhatan Tsevegmid, shared:
Jumping into this topic in itself was a big risk for us, as nobody talks about this issue in Mongolia. But with support from USAID and its partners – the only donor entity bold enough to fund such sensitive issues – we took the leap despite social resistance and organizational risks. Now that is gone. It is regretful because it was the first of its kind in Mongolia and this issue could disappear from public discussion.
Human trafficking is another prevalent issue that has been severely impacted by the funding halt.
In 2024, the U.S. Department of State categorized Mongolia under Tier 2 in its annual Trafficking in Persons report, stating that the country does not fully meet the minimum standards of eliminating human trafficking despite significant efforts. This underscores the urgent need for further sustained multi-stakeholder engagement to address this problem.
The Gender Equality Center (GEC) is one of the few, if not the only, non-profits in Mongolia focused on researching trafficking networks, supporting survivors, and implementing preventive programs. Given the significant lack of public discussions and social awareness around human trafficking in Mongolia and given the cross-border nature of the issue, international support has been crucial.
However, the USAID freeze has ceased all of GEC’s activities, including its two temporary shelters for survivors alongside all legal, psychological, and recovery services.
“Without this funding, we can’t operate. Victims are left without support, and perpetrators walk free,” the GEC’s director, Bayasaa Geleg, said.
Another area impacted by the USAID funding freeze is freedom of expression and the strengthening of rural civil society.
In 2023, 77 percent of parliament members supported a bill that introduced new restrictions on public criticism of government officials. While the president of Mongolia vetoed the legislation and the parliament ultimately supported the veto, there are growing concerns among local civil society and media actors around freedom of expression and civic space. In response to these concerns, in 2023, the Asia Foundation and IREX initiated the Media and Civil Society Strengthening (MACSS) program.
The aim was to empower local media and civil society to reinforce Mongolia’s democratic values and hold decision-makers accountable. As part of this effort, the Leaders Advancing Democracy (LEAD) Alumni Association – a local NGO with 247 alumni from USAID’s LEAD program – kicked off an initiative to strengthen rural civil society’s capacity in human rights, good governance, and media literacy. Given that more than 60 percent of Mongolia’s civil society actors are concentrated in the capital, according to research published by the International Center for Not-For-Profit Law, this program aimed to fill a critical gap by focusing on rural, remote communities.
The MACSS program, which was initially planned as a five-year initiative, is now at a standstill due to the USAID funding freeze. The LEAD Alumni Association’s chair, Dolgorsuren Munkhbaatar, shared her concerns: “All our USAID proposals and planned programs are now on hold, and MACSS partners are stuck in bureaucratic limbo. If there are issues with certain programs, why not address them directly instead of freezing everything, especially initiatives that are making a real impact with integrity? It feels like we’ve been sentenced without a trial.”
Broader Implications
The United States has been a long-standing champion of democracy-building and human rights globally. Through USAID, it empowered new and emerging democracies like Mongolia to initiate difficult conversations and protect human rights. This support has been particularly key to Mongolia, which balances the geopolitical influence of its neighbors, China and Russia, both of which have different governance models than democratic systems. To balance this complex dynamic, Mongolia has an active “third neighbor” policy and engages with democratic countries, especially the United States.
Since 1991, the U.S. has provided over $200 million in USAID assistance to Mongolia, supporting democratic development, economic growth, and civil society initiatives with the latest annual contribution being $12 million in 2024 before the current funding freeze. This potential loss of USAID support could mean more than just a funding gap but also the beginning of U.S. departure from global leadership in democratic values and soft power influence in East and Central Asia. For Mongolia, which is sandwiched between two geopolitical giants, the open question is: Will China or Russia fill this gap? And what will this mean for human rights and democracy in the country and on this side of the world?
When the U.S. withdraws support from new and emerging democracies, these countries will have no choice but to turn to alternative funding sources. This trend is not hypothetical – just two weeks after the U.S. suspended funding for Cambodia’s largest demining organization in early 2025, China stepped in with a $4.4 million grant. China has also expressed support for addressing the funding gaps due to the USAID freeze in Nepal, Colombia, and the Cook Islands, further expanding its soft power in those regions through aid programs that often lack transparency and conditionality.
Historically, China’s development model through the Belt and Road Initiative (BRI), already evident in most African countries and Southeast Asia, has increasingly prioritized economic development over democratic accountability standards. The big-picture impact of the U.S. funding freeze is apparent – these geopolitical consequences could potentially contribute to Mongolia’s and other impacted countries’ shift away from human rights and democracy in the region.
What Mongolia Must Do Next
The USAID funding freeze threatens not only specific projects but also Mongolia’s overarching civil society and its democratic progress. These organizations serve as accountability mechanisms addressing uncomfortable yet essential issues for a healthy democracy.
Mongolia must now prioritize localization and donor diversification. This funding freeze must be recognized as a siren, prompting intentional efforts to diversify funding sources by engaging with relatively neutral, alternative donors like the European Union countries, South Korea, and Japan, as well as cultivating a local culture of philanthropy by partnering with the Mongolian private sector and foundations. Policy reforms, such as earmarked funds for local civil society and more progressive tax incentives for donations and grants, are direly needed and should be informed by best practices from comparable countries.
This crisis could be leveraged as an opportunity for transformation, but this depends on Mongolia’s ability to listen to all its voices on critical social issues, including those that society finds uncomfortable. If these issues are silenced, it will not just be a loss for marginalized communities. It will also be a loss for the democracy that Mongolia proudly and bloodlessly obtained in 1990 at Sukhbaatar Square.
