Positive and Negative Implications of Foreign Aid

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The United States of America and other members of the Development Assistance Committee (DAC) recognize foreign aid as any allocation of part of a country’s resources to another under control of its willingness to do so. This type of giving unlike lending does not require the receiving country to pay back for what is given to it. Foreign aid can take the form of a variety of resources ranging from money, expertise, and material goods food included. Majority of the countries offered foreign aid are recognized as least developed compared to the member states of the Development Assistance Committee, a delegation of about 22 countries. The US government unlike any other country is the giant initiator and giver of foreign aid a factor related to its many resources and large influence it has the World Bank, the United Nations and the International Monetary Fund. Like any form of legendary giving and receiving, foreign aid has a number of advantages and disadvantages to both the giver and the receiver. This paper highlights the positive and negative implications of foreign aid.

Foreign aid of any kind is offered for the benefit of the receiving country but the donor country may equally benefit indirectly or directly in the event that it wishes to attain any of the following; establish strong influence of its culture over the receiving country, attain a framework for it to reap certain resources from the receiving country, and in the event that it wishes to create a strong military friendship. Other reasons explaining the need to offer foreign aid are related to the satisfaction of a diplomatic approval and a donor’s gratification for the receiving country’s conduct in accordance with its expectations. Most countries in Africa operate on foreign aid owing to the economic and political instability coupled with the increased occurrences of natural calamities. Foreign aid currently is offered in two perspectives either as bilateral or multilateral. Bilateral foreign aid is offered when a country directly gives its support in any form to another while multilateral aid is when a country does not contribute directly to a needy country but instead contributes to an international organization like the World Bank, the United Nations and the International Monetary Fund (Lancaster, 84).

Both bilateral and multilateral aids have disadvantages and advantages. Research indicates that giving aid of any form to a needy country not only uplifts the state of the situation in crisis but is feared to free the needy country’s funds meant for the same into other prospects in the same country that may not be supported by the donor country. A country in need of food aid may on getting aid reallocates its own finances meant for the same into weaponry (Easterly). This does not imply that it’s wrong for any country to reinforce its security by obtaining more weapons, but the same should be done in order of priority. To acknowledge aid as helpful or destructive depends on both the needy and the donor country’s justification. Superpowers that offer aid to third world countries with the goal of attaining great political influence over the receiving countries may be judged on the impact of their influence on the receiving country as a whole in a battle to support communism by the Soviet Union and capitalism by the United States. Foreign aid was used to lure the receiving country to support either of the slogans. This saw the victory of the United States’ influence over the European countries with the creation of the marshal law, such a case where the donor country stands to benefit much more than the needy country can be interpreted as an act of neocolonialism (Easterly).

Humanitarian aid offered in the event of natural calamities is of great help to the victims in need but studies indicate cases where the aid is related to other social and cultural vices. The human race is diverse as the many cultures that there are. Good aid should not only uplift status of the victim of circumstances but also uphold his right in relation to his religion and culture. Most western countries embrace a culture that is very different from what is in many third-world countries. A case is implicated in the Middle East where in the process of helping themselves to relieve food, Muslims were left with no choice but to eat pork products yet their religion forbids this. This may not be a wrong doing on the part of the giver as it’s offered in the form of solving a crisis and due to cultural limitations the donor country may not be in a position to give as per the needs of the receiver in this perspective. In an effort to meet the needs of the receiver in this perspective, a case is implicated in USAID, wherein feeding the war afflicted people of Southern Sudan, food purchases made in the North owing to similarities in diet mannerisms not only fed the hungry in the South but also enriched the North enabling it to buy more weapons to further destroy the South (Shah).

The case in Sudan in Africa was at some point interpreted as the US indirectly attacking the victims it claimed to be feeding. Foreign aid has spearheaded various economic development in most third-world countries.Critics however argue that most of this aid is offered under stipulated conditions by the giver making the receiving country subject itself in a submissive manner to the donor. This has been implicated in both bilateral and multilateral aid. Aid offered by both the United Nations and the World bank not forgetting the International Monetary Fund is under influence of the major contributors to the kit and it’s feared to be an indirect way in which the capitalism of such superpowers can be channeled to the receiving country. Studies indicate that most countries aided by the World Bank, the united nations and the International Monetary Fund have had to remit back to the rich countries that supply them with what is not locally produced in these countries. Critics argue that most of the foreign aid is channeled back to the rich countries that end up overpricing most of their commodities sold to the poor countries a situation that seems to be a way of claiming all that had been offered in the aid (Lancaster, 456).

Other than issues related to the donor of the aid, the receiving countries are bound to suffer from a number of fraud-related issues bearing in mind that most political systems in most of the third world countries are not well structured with corruption emerging among many top politicians. Food aid for instance has been severally abused by many politicians who use their position to influence the distribution with majority preferring their own tribes while some diverting the allocations into black markets. The needy that are meant to get the food aid at no cost will in this situation end up being exploited by paying heavily for the same.

A similar problem with the continued supply of foreign aid in the receiving country is that the home industries in these countries risk losing value with regard that most of what could have been sold on the home market is not sold as the people who are meant to buy are offered an alternative at no cost. For instance; with the increase in the circulation of second-hand clothes from rich countries, most industries in poor countries risk closing down as a result of lack of demand for their produce that may be relatively expensive even if of good quality. Majority of the local people will prefer going for second-hand clothes owing to their cheap costs.

The United Nations recommendations are that all rich countries should offer aid to the developing countries, the figure approved by the United Nations for the last 35 years stands at 0.7 % of the wealthy country’s Global national income. However many wealthy countries do not abide by this rule and most of the aid currently offered is said to be far below the expected figure irrespective of their bountiful resources.Critics argue that most wealthy countries at the moment give substandard aid with the goal of faking the image of giving and at the same time attaining their own interests in the receiving countries. It is equally surprising to note that some of the donor countries may not behave as many resources as the receiving country yet they still stand to offer aid. In around 2001 when Japan was leading in the giving of foreign aid, studies indicated that Japan at the same time did not have enough raw materials for most of its industries. A comparison with the US at the same time indicated that the US was better placed in terms of raw materials than Japan. The ability and willingness to give is such an issue as far as how much and how often foreign aid should be given (Rogerson, 235)

With the increasing world economic crisis many developing countries are bound to regret their over-dependence on foreign aid as most of their donors struggle to bring back their country’s economies into shape. It is evident that the economic situation in the world at the moment is hitting hard on developing countries even if they are not to blame for the economic downfall. A handful of countries that once relied heavily on foreign aid are now strategizing to shift from foreign aid. A case is implicated in the Brazilian economy that previously relied heavily on funding from the international monetary fund. In an effort to distinguish itself from the tradition of relying on foreign aid, the Brazilian government has now managed to loan the International Monetary Fund. This will mean that Brazil will also have influence on the expenditure of the kit whose structures once controlled it when it used to borrow from the kit. It is thus not advisable for developing countries to vest all their hopes on donor countries as this puts them at the risk of suffering further in the event that foreign aid is frozen, it may be wise not to rely on the same but rather use what has been offered alongside what is readily available to plan for the future and attain self-sufficiency as in the case of Brazil (Shah)

At the moment foreign aid is changing from what it should be to a different perspective. In an effort to camouflage in the name of giving many rich countries are geared towards using foreign aid to strategize for their own economic growth and development, this has in turn seen the worst of products and services are given to developing countries. Critics argue that some donors use the situation to get rid of their surplus production and thus get more of the subsidies to produce further. A case is implicated in food aid from western countries known to be embracing agriculture through genetic modification. Due to the excess and unwanted harvest, most of it finds its way into developing countries with some not having any hint of the contents of the food they are receiving. Research indicates that most developing countries especially in Africa have not yet accepted genetically modified organisms yet their donors will still feed them on the same without their consent (Rogerson, 345).

Other than bilateral and multilateral aid, private aid from privately-owned companies in rich countries has also been associated with wrong motives. Just like in the case implicated above where foreign aid is offered with the sole goal of creating room for more production, a case is implicated where a private donation to India was geared at winning its large market for a product that was just about to be released into the market hence the efforts of the private donor were interpreted as geared towards winning the competitive market over other producers of similar products. This was the case implicated in Bill Gates’s donation to the Indian Aids program. Aids is an issue of great concern but critics interpreted Bill Gates’s envy for the Indian market for one of Microsoft’s new releases. Seemingly the aid would not have been offered had it not been for the launch of the new software in the market owing to the fact that India is such a rich market for software. This was interpreted as an attempt to enhance private philanthropy (Easterly, 234).

Private philanthropy has been expounded further on the regulations by the World Trade and the Trade Regulated Intellectual Property Rights (TRIPS). Many rich countries forbid developing countries from manufacturing most of the products on their own with their little capacity by obtaining patents over them. Most foreign aid especially for drugs could have been canceled if developing countries were in a position to attempt producing similar models had it not been for the patents. The food insecurity in most developing countries can be blamed on the existing patents and breeders’ rights that forbid the poor farmers to use produce from their own harvest as seed for the next planting but instead buy and thus enrich the breeder and the country of origin. Countries in which the seeds are produced are bound to use Foreign aid as a marketing strategy so that the receiving country can strategize towards buying from them (Easterly, 346).

The abuse of foreign aid can be blamed on the so-called planners who only enrich themselves in the name of planning for the poor countries. Foreign aid has seen the emergence of very many aid agencies both in the donor countries and the receiving countries. Aid allocations are made whenever a situation is reported but research findings from 1999-2007 indicate that only a quarter of the allocated funds get to the needy with the rest being unaccounted for. Bureaucracy has been cited as a major vice associated with the distribution of foreign aid.In the name of working for the needy, many aid officials have pocketed large portions of the aid and enjoyed prestigious job positions. This does not imply that all aid agencies are malicious but calls for emphasis to be laid on the distribution and accountability of foreign aid. Countries that have a long history of receiving foreign aid are agued to implement strategies geared towards reducing poverty and over-dependence on foreign aid (Rogerson, 356).

The debate on the need and abuse of foreign aid does not in any way imply that aid is awful especially for very poor countries. Any aid can be appreciated if an assessment is followed and proved to be beneficial. Their cases where donors have paid for aid like in the provision of education for refugees inhabited in another country yet the money is not spent on education but other life-related luxuries. There are also countries where notable development has been reported with the proper use and management of foreign aid, such countries stand to be rewarded by their donors. A critical evaluation in the acquisition, use and management of foreign aid will reveal high levels of responsibility, transparency alongside accountability for most of the Aid allocated.

Most critics point fingers at the implications of the US aid in an effort to fight terrorism. Most of the US aid is limited to countries that are bound to support its fight against terrorism especially with reference to the Sept 11^th attack on the World Trade Center. The American citizens are quick to point that most of the foreign aid offered is a burden on their economic resources especially with reference to countries that currently indicate no positive index on development. With the US aid geared towards poor countries that are bound or known to be allies to the American government especially with the fight against terrorism , most aid agencies and employees have been targeted by various terrorist groups a situation that puts their work and life in danger. Terrorist groups are now out to make a fortune on foreign aid in transit and this has in turn led to the emergence of a number of pirates along with major transits networks especially the water transport system that happens to be a preferred mode of transport for most material aid. Countries that are sidelined are out to destroy neighboring countries that are favored in the acquisition of foreign aid (Easterly).

The favoritism implicated by donors may be a measure to punish a certain sidelined country for its misconduct but the same has put the lives of very many desperate people at stake for wrongs committed by their administration. For countries that are poor yet have unexploited resources, donor countries have occasionally reaped these resources for their own countries and have offered foreign aid not as compensation but as an enticement.This does the poor countries more harm as they end up losing most of their natural resources that may have been used to uplift their economic status if traded (Shah).

Foreign aid is equally a solution and a problem for both the receiving country and the donor. A situation that calls for international intervention would have been more effectively managed if stringent measures were used to assess the distribution and the condition in order that foreign aid is not abused or used for wrong deliberations as in the cases implicated in the purchase of weapons with the sums initially meant for the crisis laid off by foreign aid. Accountability should be reinforced and for countries with wrangled political systems that may not be held responsible for the lives of the common citizens, intervention measures should be put in place such that the affected human beings are not forsaken because of crimes committed by their political bosses. Foreign aid should be geared toward benefiting the poor developing countries and not exploiting them indirectly. In order that the aid is not abused, the donor country should make an assessment follow-up and encourage more responsibility for the aid allocated by rewarding countries that properly utilize the aid and at the same time questioning situations where no expected development is accrued.

It is good for wealthy countries to reach out and help in the development of poor countries.Giving is a virtue and should be done in good spirit. For cases where the receiving country has plenty of untapped resources that may be envied by its donors, it would be more appealing for it to be assisted in the utilization of these resources and thus foreign aid be offered in the form of expertise to help in the recovery of the resources and not as a form of enticement so that the donor country can secretly reap off these resources without being questioned.

Donor countries should not offer foreign aid to needy countries in the spirit of diplomatic approval. With reference that most aid is a United Nations recommendation, donor countries should not abuse the recommendations and give substandard aid as a way of meeting the obligation. Self-sufficiency should be every country’s struggle.Though donor countries may be blamed for not meeting the obligation; it is equally a burden to them. The world at the moment is facing the worst economic crisis and most wealthy countries are struggling to put their own economic position in shape and with the obligation from the United Nations it is hard to fully meet what is expected of them. It is thus not proper for the world to criticize the little that is offered as this may in turn send negative implications to the giver who may be compelled to give substandard products in bulk to meet the goal.Pressure on the donor countries has seen them meeting their obligation with crude measures that may not be blamed on them.

Works cited

Easterly, William. The Effectiveness if Foreign Aid, 2006, Web.

Lancaster, Carol. Foreign Aid: Diplomacy, Development, and Domestic Politics, university of Chicago press, 2007.

Shah, Anup. The Effectiveness of Foreign Aid, 1998, Web.

Rogerson et al. The International Aid System 2005-2010 forces for and against change, 2004.

Easterly William, The White Man’s Burden: Why the West’s Effort to Aid the Rest Have Done So Much Ill and So Little Good. USA: Penguin, 2006.

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Positive and Negative Implications of Foreign Aid

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