3 Foreign Aid and Development

“Foreign Aid” A presentation by Jihan Hussain; Julie Anne Salas; and Victoria Moedano, [YouTube]. For personal, educational purposes only. All rights reserved to copyright holders.

What is Foreign Aid and Why Should We Pay Critical Attention to It?

Foreign aid is the global transfer of funds, resources, or products by governments or other organizations. When this form of global resources are transferred to a recipient nation or its population it is referred to as foreign assistance. Foreign aid, which can be financial, political, or humanitarian in nature has historically been among the primary sources of foreign cash. Loans or grants were traditionally provided as forms of international assistance (Agarwal, 2022).

The proposed goal of international aid is to provide products, money, training, consultations from “developed” countries, and other forms of aid. Optional monetary support includes exporting credits in addition to subsidized loans, grants, and other financial resources. Official development aid, or help given to boost growth and fight poverty, is the most common type of foreign assistance. Official development assistance is mostly obtained through trade conventions between governments, while some funding is also obtained through non-governmental and governmental organizations. Increasing a nation’s exports while simultaneously promoting its language, history, and spirituality are the two main objectives of overseas aid. Nations frequently give relief to reduce suffering brought on by ecological or man-made disasters including disease, war, and hunger. It contributes to the implementation of natural wealth, the development or improvement of democratic structures, and the resolution of several international problems like illness, terrorists, and other moral failings as well as the destruction of natural environments. Critically analyzing, foreign aid is vital because it influences policies, laws regimes, and global issues. Some argue that it creates dependency and fosters corruption.

In our course readings we learned that Cold War rivalry and politics, governed international relationships, geopolitics and deeply influenced foreign aid. We read about how the western aid, mainly from the United States concentrated on undercutting competition and political movements that espoused socialist ideologies, while on the other side, the Soviet Union was strengthening their international relations with newly independent countries in Asia and Africa (McMichael, 2008). We’ve chosen to unpack the basic of foreign aid as a way to examines the postwar state of developing countries, and explore why the foreign aid system itself failed to assist those countries in establishing strong, self-sufficient economies.

The Implications of Foreign Aid Today

The basis of foreign aid holds that the influx of outside funding is crucial for developing nations to achieve their development goals since more resources enable them to meet their strategic objectives. Therefore, it is crucial to examine the most important and detrimental aspect of growing economies. A life-threatening illness for every society’s progress is dishonesty and corruption. Offering money to someone in a position of power to influence their decision to side with one’s opponent or not is what is meant by corruption. The industry for bribery and corruption naturally produces heat when justice is carried out, but citizen’s rights are not respected fairly. These methods of assistance are not functional in such a society, where corruption is widespread, and the community cannot be stable (Corporate Finance Institute [CFI], 2022).

Reflective Questions