Forbes - Small Business Owner Describes The Devastating Immediate Impact Of DOGE Cuts On Her Company
Mary Faith Mount Kors, founder of Ed Intersect, discusses the impact of the Trump administration's decision to cut over 90% of US aid contracts, which has led to the termination of her company's projects in Malawi and Tajikistan. These cuts have left her company without a portfolio and unpaid for completed work, threatening its survival. The cuts are part of a broader reduction in US foreign assistance, which has destabilized local economies and affected small businesses in North Carolina. Despite attempts to find alternative funding through foundations, the gap left by US government contracts is significant. The cuts have also affected local communities, with layoffs at major organizations like RTI and FHI 360, and universities like the University of North Carolina. The conversation highlights the broader implications of these cuts, including the loss of US soft power and influence globally, as other countries like China step in to fill the void. Mary Faith emphasizes the need for public awareness and engagement with elected officials to address these issues and the importance of understanding the interconnectedness of international aid and local economies.
Key Points:
- Ed Intersect's projects in Malawi and Tajikistan were terminated due to US aid cuts, leaving the company without a portfolio and unpaid for completed work.
- The cuts have destabilized local economies and affected small businesses in North Carolina, leading to layoffs and financial uncertainty.
- Attempts to find alternative funding through foundations have not compensated for the loss of US government contracts.
- The cuts have broader implications, including the loss of US soft power globally, as countries like China fill the void.
- Public awareness and engagement with elected officials are crucial to address the impact of these cuts and understand the interconnectedness of international aid and local economies.
Details:
1. 🎙️ Introduction and Context
- The Trump administration enacted a significant reduction of more than 90% in US aid's contract, amounting to a $60 billion cut to global programs, affecting local American companies like Ed Intersect.
- Ed Intersect, based in North Carolina, is a company led by Mary Faith Mount Kors that focuses on system strengthening in basic education in partnership with foreign governments.
- The company's primary projects have been in countries such as Malawi and Tajikistan, focusing on research and evaluation in early reading and math.
- These cuts have tangible impacts on companies like Ed Intersect, which primarily works with USAID on international development projects.
- Beyond Ed Intersect, these aid cuts have broader implications, potentially affecting numerous sectors that rely on US aid for international development and collaboration.
2. 💼 Impact of Budget Cuts on Ed Intersect
2.1. Immediate Impact of Budget Cuts
2.2. Exploring Alternative Solutions
3. 📉 Consequences on Education and Local Communities
- The suspension of educational programs significantly affects both children and local teachers, leading to uncertainty about future educational access and quality. Local governments, such as Malawi's, are now expected to fill the void left by international aid.
- Early childhood education programs, which prioritized using local languages, are at risk due to the suspension of aid.
- The abrupt cessation of US aid compromises the ability of children and teachers to attend school, particularly during emergencies like epidemics and natural disasters.
- Assessment systems developed over two years in collaboration with local governments face uncertainty, especially concerning resources like tablets and learning materials.
- In Tajikistan, educational materials prepared over the past year were not distributed, affecting the education sector's continuity.
- The minimal impact of these program cuts on the national debt is contrasted with the significant effects on education and local economies, highlighting inefficiencies in the decision.
- Significant layoffs occurred, with over 500 jobs lost in organizations like RTI and FHI 360 in North Carolina, causing ripple effects in local consumer economies.
- The broader destabilization extends beyond trust erosion and may lead to long-term economic impacts.
- RTI alone terminated 177 employees in North Carolina, with further cuts expected, affecting both international and domestic education research.
- Small businesses reliant on USAID contracts face existential threats, needing to start over or lay off staff, demonstrating the widespread economic impact.
4. 🔄 Business Rebuilding Challenges
- Organizations and academic institutions are pulling back financially due to uncertainty about future budget cuts, impacting operational capabilities and long-term planning.
- Small business owners are striving to maintain operations, focusing on short-term viability through the end of the calendar year by engaging in small, funded projects to rebuild their portfolios.
- These small projects, however, are not sufficient to replace larger, consistent work contracts like those previously held with entities such as USAID.
- There's a shift towards a 'piecemeal' work structure due to the uncertainty of securing large contracts, necessitating strategic planning for financial stability.
- Household-level financial adjustments are being made to counteract income loss from sudden business closures, highlighting the personal impact of broader economic challenges.
- The education sector is particularly hard hit, with domestic job opportunities decreasing due to budget cuts, leading to concerns about long-term viability and the potential for sector-wide decimation.
- There are significant concerns regarding the allocation and usage of congressionally appropriated funds meant for national security imperatives, such as the Reed Act, prompting questions about government spending accountability.
- Businesses are challenged to sustain and restructure when government funding and contracts are halted, emphasizing the need for transparency and strategic financial management.
- Understanding government spending and ensuring taxpayer dollars are used as intended is critical in navigating these challenges.
5. 🌍 Global Implications and Soft Power
- The United States engages globally through a three-pronged approach: defense, diplomacy, and development, with a focus on soft power to maintain influence.
- China is strategically expanding its influence by taking over development projects in regions like Cambodia, previously managed by USAID, highlighting a shift in global power dynamics.
- This shift is part of China's broader Belt and Road Initiative, which aims to enhance China's global influence through infrastructure and investment, posing challenges to U.S. soft power.
- The national security implications of this shift require the U.S. to reassess its global strategy and response to China's growing influence.
- U.S. citizens are encouraged to actively question elected officials about strategic decisions related to global influence and national security to ensure the U.S. maintains its position in global affairs.