Foreign Aid

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Foreign aid is the transfer of resources between countries, usually one with more power and wealth than the other, in order to help assist the poorer country's stride to develop into a self-dependent nation. (Burnell, 3) I feel that foreign aid is very necessary and beneficial for both countries whether they are the providers or the receivers because not only are the two countries forming a bond and an allegiance, they are helping the world progress towards equality of nations. Although equality will most likely never be achieved between all countries foreign aid is a great start to the development process for third world countries. However, for foreign aid to really be beneficial the money must go to factors that affect the people like health care, unemployment, and education rather than all to the government for them to spend carelessly. As long as the money going to the government is used properly and distributed throughout the nation foreign aid can be a huge factor in economic development. Through extensive research and numerical data I will show and compare the positive effects of different factors aiding development and recommend the United States government focus its aid spending one particular factor.

The most important factor to pay attention to when looking at development problems of some third world countries is the UN's Human Development Index. This index measures the level of human development in a particular country, which is an effort to increase the capabilities of people to lead a full, productive, and satisfying life. (Griffin, 1) Development can also be considered the enrichment of a countries economy along with the citizens of that particular country. The Human Development Index is based on three measurable criteria, living a long and healthy life, being educated, and having a decent standard of living. Ways in which these criterion can be measured is by life expectancy, school enrollment, literacy rate, and income. (Griffin, 1) With the help of these measurements we are able to observe a broader view of a countries development, which ultimately will help us decide where to put our foreign aid dollars. The reason that the UN's Human Development Index is best for measuring development is because often material enrichment, such as an increase in GDP and GNP per capita, does not always work as well. (Griffin, 1) This is because all of the money and wealth is not going directly to the benefit of the poverty-stricken citizens that need the money the most; rather it goes to the already rich creating a greater gap between the rich and poor. However on the other hand there is a direct correlation between the GDP per capita of a country and the Human Development Index. To demonstrate this point here is a graph.

According to the graph above, it is visible that as the GDP per capita increases on the y-axis, the Human Development Index on the x-axis increases as well. This means that certain countries living standards and education have improved thanks to an increase in GDP. However, this is according to the trendline drawn in the graph. Although it seems like there is a direct correlation with each factor, with a closer look at the graph we see that in some cases the Human Development Index does not increase very much considering the large jump in GDP per capita. This proves that material enrichment does not always aid in the development process of a country.

The UN's Human Development Index is the best way to measure development in third world countries because it depends so much on human capital. "Human capital consists of the knowledge, skills, experience, energy, and inventiveness of people." (Griffin, 3) If people in a third world country contain the skills that encompass the definition of Human Capital, their Human Development Index measurement will skyrocket meaning they are on the road to development. The reason human capital is an important factor in making the Human...
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