What is Foreign Aid
Foreign aid refers to the international transfer of capital, goods or services in the form of grants or loans; sometimes it is referred to as voluntary transfer either from one government to another (bilateral assistance) or through a multilateral assistance agency like the World Bank for the benefit of the recipient country or its population. Aid can be in the form of economic, military or emergency humanitarian aid, especially during natural disasters. (Todaro and Smith 2010:229)
Foreign aid was conceived as a product of the Post World War II era. Its roots are in the Marshall Plan, under which the United States gave funds to help rebuild Europe after the war. Two decades after World War II, emergence of independent nations from Europe’s colonies was experienced, especially in Asia and Africa. Encouraged by its role in rebuilding Europe, the United States took the lead in trying to help the newly emerging nations by providing capital in the form of foreign aid, especially to countries that had development plans for investing the aid they received. Accordingly, these developing countries lacked certain kinds of skills and expertise such as planners, engineers and constructors which were considered part of the aid. Hence the United States was the initial fore-father of foreign aid.
Currently the number of Foreign Aid givers has increased mainly drawn from the United States, Europe and some countries in Asia such as Japan and China. The aim of all these donors has nevertheless remained the same in terms of security, economic maintenance, political interests and humanitarianism. In 1970, some of the world’s richest countries agreed to give 0.7% of their gross national income as official international development aid on an, annual basis. Besides, it can be argued that most of these countries do not fulfil their promises and if they do, they gain a lot from the developing countries more than what they give in form of aid. This, therefore, brings in a major debate –
Foreign aid was conceived as a product of the Post World War II era. Its roots are in the Marshall Plan, under which the United States gave funds to help rebuild Europe after the war. Two decades after World War II, emergence of independent nations from Europe’s colonies was experienced, especially in Asia and Africa. Encouraged by its role in rebuilding Europe, the United States took the lead in trying to help the newly emerging nations by providing capital in the form of foreign aid, especially to countries that had development plans for investing the aid they received. Accordingly, these developing countries lacked certain kinds of skills and expertise such as planners, engineers and constructors which were considered part of the aid. Hence the United States was the initial fore-father of foreign aid.
Currently the number of Foreign Aid givers has increased mainly drawn from the United States, Europe and some countries in Asia such as Japan and China. The aim of all these donors has nevertheless remained the same in terms of security, economic maintenance, political interests and humanitarianism. In 1970, some of the world’s richest countries agreed to give 0.7% of their gross national income as official international development aid on an, annual basis. Besides, it can be argued that most of these countries do not fulfil their promises and if they do, they gain a lot from the developing countries more than what they give in form of aid. This, therefore, brings in a major debate –
References: Todaro, M & Smith (2010) Economic Development; Pearson Education Limited, Ends Bury, American Journal of Agricultural Economics. Roger C. Riddell, (Oxford: Oxford University Press 2007) Barret , C.B. (1972); Food Aid; Is Development Assistant, Trade Promotion, Both or Neither? Bauer, P.T. (1972); Dissent on Development; Cambridge, Mass, Harvard University Press. Online - http://wiki.answers.com/society/government 11th February, 2014.