One of the most controversial and
debated issue in the arena of global politics is that of foreign aid or
developmental assistance. Many people argue for and against foreign aid. Having stated a position on foreign aid,
people find their own reasons to either reject or support foreign aid and they
have their own justification. Obviously it is better to have a factual position
on exactly what are the factors to be taken in to consideration on most
discussions on foreign aid.
Foreign aid, the
international transfer of capital, goods, or services from a country or
International Organizations for the benefit of the recipient country or its
population. Aid can be economic, military, or emergency humanitarian (e.g., aid
given following natural disasters) reads Britannica encyclopedia[i].
Also Dictionary.com defines it as economic, technical, or military aid given by one nation to another for purposes of relief and rehabilitation, for economic stabilization,
or for mutual defense[ii].
Obviously in fact there are many
forms of from food aid to humanitarian emergency assistance, military
assistance, disaster relief etc. Most part development aid has long been
recognized as decisive to help poor developing nations grow out of poverty,
famine and unemployment.
In 1970, the world’s rich countries
agreed to give 0.7% of their GNI (Gross National Income) as official
international development aid, annually. Since that time, despite billions
given each year, rich nations have rarely met their actual promised targets.
For example, the US is often the largest donor in dollar terms, but ranks amongst
the lowest in terms of meeting the stated 0.7% target (Shah 08 April 2012).
By any yardsticks economic aid has
several dimensions and connotations as of currently. Countries typically offer
economic aid to boost their own security. Thus, economic help could also be
accustomed to stop friendly governments from falling below the influence of
unfriendly ones or as payment for correcting to determine or use military bases
on foreign soil. Economic aid conjointly could also be accustomed can succeed a
country’s diplomatic goals, sanctioning it to realize diplomatic recognition,
to garner support for its positions in international organizations, or to
extend its diplomats’ access to foreign offices Different functions of economic
aid embody promoting a country’s exports (e.g., through programs that need the
recipient country to use the help to buy the donor country’s agricultural
merchandise or factory-made goods) and spreading its language, culture, or
faith. Countries conjointly offer aid to alleviate sufferings caused by natural
or artificial disasters like famine, disease, and war, to market economic
development, to assist establish or strengthen political establishments, and to
deal with a spread of multinational issues together with illness, terrorist act
and different crimes, and destruction of the surroundings.
Why
non realization of socio economic development through foreign aid
All
aid projects are good and welcome because it is ethical and politically correct
to fill the stomach of empty bellies. Historically aid is correct in the sense
that aid can offset the mistreatment and maltreatment envisaged by large group
of people in one part of world by a minority of people from other part of
world. Aid is not a charity. Aid is not gift. Aid is the right of those
countries that need it. The real question needs to be explored is that who is
benefitting from aid projects. Is it developed countries or poor nationalities.
Foreign
Aid has been one of highly controversial and debated academic, political and
popular issues in most of under-developed countries. Foreign aid us mostly a
political issue in most of time in electoral politics of almost all developing
nationalities. There are several reasons why Foreign Aid is controversial as
well as politically jerking besides the non realization of socio-economic
development pinpointed in the stated goal of such foreign aid programmes. Most obviously foreign aid is given by International
development agencies, International organizations, rich nationalities etc.
behind every currency being pumped through foreign aid programmes, there are
stated rules and guidelines to be followed by recipient nationalities. Here
comes the tragedy and dark side of aid projects all over the world.
Aid,
especially the fund is often wasted due to the pre-conditions being stipulated
by donor countries that the recipient must fulfill in practice has been a
mockery and pretense and misplaced direction at the altar of aid projects with
out really serving the purposes for which aid is being given.
Most
notably the stipulations that the recipient countries should use expensive and costly goods and services from donor
countries also act as a stumbling block to aid projects.
Nearly
all aid funds and project does not in point of fact does not go to the poorest
and marginalized people and countries who would in reality need it the most. This is largely because there are many
numbers of considerations being taken for measuring the eligibility criteria
and favouritism always prevails in aid allocation.
Aid
amounts are dwarfed and zeroed by rich country protectionism especially at WTO
stipulations that denies market access for poor country products on various
unethical and misplaced standardization and quality stipulations, while rich nations
use aid as a leverage to open and access poor country markets to their products
and services.
Large
projects or massive grand strategies often fail and fall short of achievement
to help the vulnerable and teeming millions as money and aid can often be embezzled
and misappropriated away by vested interests and moneyed classes.
Professor William Easterly, a noted
mainstream economics professor on development and aid issues has criticized
foreign aid for not having achieved much, despite grand promises. “A tragedy of
the world’s poor has been that] the West spent $2.3 trillion on foreign aid
over the last five decades and still had not managed to get twelve-cent
medicines to children to prevent half of all malaria deaths. The West spent
$2.3 trillion and still had not managed to get four-dollar bed nets to poor
families. The West spent $2.3 trillion and still had not managed to get three
dollars to each new mother to prevent five million child deaths.… It is
heart-breaking that global society has evolved a highly efficient way to get
entertainment to rich adults and children, while it can’t get twelve-cent
medicing to dying poor children[iii]”
The United Nations Economic and
Social Council, at the same time when assessing that effectiveness of aid to
poor countries necessitates a focus in economic infrastructure also illustrated
that Organisation for Development Assistance was impeding foreign aid
programmes altogether[iv].
Jose Antonio Ocampo, Under-Secretary-General for the United Nations Economic
and Social Affairs said that, commodities, debt, official development
assistance and, at times, the risk of conflict is hindering development in the
least developed countries for most part.
More over, loads of developing
nations are in debt and poverty in part due to the policies of international
financial institutions such as the International Monetary Fund (IMF)
and the World Bank and obviously the programmes these organizations has had
over the years resulted not in eliminating the problems of poor nations but
rather furthering poverty, unemployment and enhancing debt crisis[v].
Subsequent to an ideology known as
neo-liberalism and steered by WB and IMF and other institutions known as the
“Washington Consensus” [for being based in Washington D.C.] and Structural Adjustment Policies (SAPs)
have been forced to guarantee debt repayment and economic restructuring in
reality. However, the way it has occurred has required poor countries to trim
down expenses on things like health, infrastructure, development, and education
while debt repayment and other economic policies have been made the priority
for the poor nations by such international agencies. Practically, institutions
like the IMF, World Bank have commanded that poor nations lowered the standard
of living of their people and in reality debt trap has actually misplaced the
price of foreign aid.
Besides opening up of economy has created bgger challenges
for poorer economies in the words of John Madeley who said that “Competition
between companies involved in manufacturing in developing countries is often
ruthless. We are seeing what Korten described as “a race to the bottom. With
each passing day it becomes more difficult to obtain contracts from one of the
mega-retailers without hiring child labor, cheating workers on overtime pay,
imposing merciless quotas, and operating unsafe practices[vi].”
Foreign aid thus gives a gloomy
side of a global state of affair between rich and poor. However, the empirical
evidence on the effectiveness of foreign aid is discouraging. Recent literature
on the topic provides ambiguous results on whether foreign aid helps or hinders
developing countries. Foreign aid, however, may affect economic growth through
indirect channels that cannot be captured by analyzing only the direct effect
of aid on growth. Aid may alter the investment share of GDP, which indirectly
affects economic growth, or may also affect government consumption, which is
known to have a negative effect on economic growth (Djankov et al., 2006). For
instances, Sachs et al. (2004) argued, unrestrained
aid may augment public consumption rather than enhancing investment.
In the empirical study by Djankov
et al., 2006 argued that foreign aid has a negative impact on the democratic
stance of developing countries and on economic growth by reducing investment
and increasing government consumption. The contention is that empirical
findings suggest foreign aid do not support the democratization processes in
developing countries nor it reflect a
development effect there.
Criticism
to foreign Aid
Noteworthy criticisms are leveled
at against of the donors and therefore the recipients of economic aid are also
subjected to crticism. Some teams in recipient countries have viewed economic
aid suspiciously as nothing more than a quite tool of influence of donor
countries. For instances,, critics of the UN agency say that the specified
structural changes are too politically troublesome and too painstaking which
the debts incurred through UN agency loans facilitate to form impoverishment, and
aid instead was channeled into debt reimbursement. The World Bank critics
claimed within the ’70s and ’80s was insensitive to native desires and
infrequently approved and aid comes through that did a lot of damage than smartening
economy and polity , altered several of its policies. In general, opponents of
the means that economic aid programs have operated charge that economic aid has
been dominated by multinational company interests, has shaped to some degree
unreasonable debt burden on developing countries, and has forced countries to
avoid victimization and ways that may
defend their economies from the open market. Additionally, several critics of
U.S. aid illustrate the continued
importance of political issues over organic process of aid projects,
citing as an example the rise in aid to countries allied with the USA within
the fight against act of terrorism following the September 11 attacks in 2001,
notwithstanding their commitment to democracy and human rights.
Meanwhile, some teams in donor
countries have criticized economic aid as ineffective and wasteful. within the US,
as an example, popular opinion polls systematically show that almost all
Americans believe that economic aid consumes twenty percent of the country’s
budget—the actual figure is a smaller amount than one percent—and that almost all
recipients of economic aid don't merit it or don't use it showing wisdom. Such
criticisms are bolstered by the commonly unsatisfying results of economic aid
programs in geographical region, wherever several countries stay involved in
impoverishment, corruption, and war despite the disbursement of serious
economic aid. With efforts to build Iraq and Asian country, curtail drug
production and trafficking, and battle HIV/AIDS, ODA—which had declined
throughout the 1990s—increased within the early twenty first century.
In a 1987 study, Michael Hunt
contended that "development was the younger sibling of containment"
and "drew its inspiration from the old American vision of appropriate or
legitimate processes of social change and an abiding sense of superiority over
the dark-skinned peoples of the Third World. In many ways, of course, foreign aid does continue the
relationship that began under an earlier, imperialist past, particularly for
colonial powers like Britain, France, and Belgium. Yet many other countries,
such as the Scandinavian nations and Canada, who lack an imperialist history,
have also become foreign aid donors, as Olav Stokke noted in a 1996 article. An
overemphasis on the imperialism of foreign aid overlooks the importance of
their "humane internationalism," which he termed "an acceptance
of the principle that citizens of industrial nations have moral
obligations" to the outside world[vii].”
Moyo, a Zambian economist with
degrees from Harvard and Oxford, in a short, polemical book, Dead Aid: Why Aid
Is Not Working and How There Is A Better Way for Africa, blames aid for
nearly every ill Africa has endured. "Millions in Africa are poorer today
because of aid; misery and poverty have not ended but have increased," she
writes. "Aid has been, and continues to be, an unmitigated political,
economic, and humanitarian disaster for most parts of the developing world[viii]."
In short foreign has done little
good to poor and developing nationalities. It is just another forms of economic
imperialism practiced in new forms. Aid is good but on what ground and for what
matter it is given and stipulations on how it is to be utilized create lot of
problems for many African, Asian and Latin American countries. Therefore,
developing countries are unable to make use of the real potential of foreign
aid rather they are victimsed for their debt trap at the altar of foreign aid
pogrammes.
Foreign aid does no good. It is
used by rich countries especially USA as a tool in foreign policy and pump
funds to developing countries as a strategic policy for their military and
other imperialist concerns. For USA aid is a political project and foreign
policy component. For many other erstwhile European colonial masters, aid is
still a new form of civilizing mission by which Whiteman’s burden is done and
articulated in a new form of cultural project.
Endnotes
[i]
See http://www.britannica.com/EBchecked/topic/213344/foreign-aid
[iii]
William Easterly, The White Man’s Burden; Why the West’s Efforts to Aid
the Rest have Done So Much Ill and so Little Good, (Penguin Press, 2006), p. 4
[iv] See UN
report, Aid to poor countries should focus on building good economies,
(http://www.un.org/apps/news/story.asp?NewsID=11188&Cr=ecosoc&Cr1=#.UT_XOTeDKE4)
accessed on 13-03-2013.
[v]
Susan George, A Fate Worse Than Debt, (New York: Grove Weidenfeld, 1990),
pp. 143, 187, 235
[vi]
John Madeley, Big Business Poor Peoples; The Impact of Transnational
Corporations on the World’s Poor, (Zed Books, 1999) p. 103
[vii] Cited
in Foreign Aid - Foreign aid's critics,
Encyclopedia of New American Nation,
(http://www.americanforeignrelations.com/E-N/Foreign-Aid-Foreign-aid-s-critics.html#ixzz2NNnyrAES)
accessed on 13-03-2013.
[viii] Cited
in Michelle Goldberg, April 7, 2009, Is Foreign Aid a Bad Thing?,The American
Prospect, (http://prospect.org/article/foreign-aid-bad-thing) accessed on
13-03-2013
Reference
Djankov,
Simeon, Jose G. Montalvo, and Marta Reynal-Querol 2006, DOES FOREIGN AID HELP?,
(http://www.cato.org/sites/cato.org/files/serials/files/cato-journal/2006/1/cj26n1-1.pdf)
accessed on 13-03-2013
Shah,Anup. 08 April 2012, Foreign Aid for Development
Assistance,Global Issues, (http://www.globalissues.org/article/35/foreign-aid-development-assistance)
accessed on 13-03-2013
Sachs, J.;
McArthur, J. W.; Schmidt-Traub, G.; Kruk, M.; Bahadur, C.; Faye, M.; and
McCord, G. (2004) “Ending Africa’s Poverty Trap.” Brookings Papers on
Economic Activity, No. 1: 117–240.
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