Foreign aid

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For the abbreviation, see AID. For the disease, see AIDS. For other uses, see Aide.
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Aid (from the french word aide, also known as international aid, overseas aid, or foreign aid, especially in the United States) is the help, mostly economic, which may be provided to communities or countries in the event of a humanitarian crisis or to achieve a socioeconomic objective. Humanitarian aid is therefore primarily used for emergency relief, while development aid aims to create long-term sustainable economic growth. Wealthier countries typically provide aid to economically developing countries.

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[edit] Sources and distribution

Bilateral Aid is given by the government of one country directly to another. Many dedicated governmental aid agencies dispense bilateral aid, for example USAID.

Multilateral aid is given from the government of a country to an international agency, such as the World Bank, the International Monetary Fund, or the European Development Fund. These organizations are usually governed by the contributing countries.

Donations from private individuals and for-profit companies are another significant type of aid. The practice of giving such donations, especially on the part of wealthy individuals, is known as philanthropy. Many immigrants move to areas of increased economic opportunity, and send money to friends and family members who still live in the countries they left. These payments are known as remittances (rather than philanthropy) and constitute a significant portion of international monetary transfers.

Non-governmental organizations (NGOs) play a major role in distributing aid - examples include ActionAid, Oxfam, and the Mercy Corps. Many non-profit charitable organizations solicit donations from the public to support their work; charitable foundations often oversee an endowment which they invest and use the proceeds to support aid organizations and other causes. Aid organizations may provide both humanitarian and development aid, or specialize in one or the other. A number of aid NGOs have an affiliation with a religious denomination.

Many NGOs conduct their own international operations - distributing food and water, building pipelines and homes, teaching, providing health care, lending money, etc. Some government aid agencies also conduct direct operations, but there are also many contracts with or grants to NGOs who actually provide the desired aid.

Scholarships to foreign students, whether from a government or a private school or university, might also be considered a type of development aid.

In 2005, the G8 set a goal of universal access to AIDS treatments by 2010.[1] In recent years, the summit has been a venue to announce promises of aid for this purpose and for general development of poor countries, and for some countries to lobby others to fulfill promises made but not yet kept.

See Official development assistance for statistics on government aid to developing countries.

[edit] Types and terminology

Aid may be "given" in the form of financial grants or loans, or in the form of materials, labor, or expertise. Aid is often pledged at one point in time, but disbursements (financial transfers) might not arrive until later.

[edit] Humanitarian aid

Main article: Humanitarian aid

Humanitarian aid or emergency aid is rapid assistance given to people in immediate distress by individuals, organisations, or governments to relieve suffering, during and after man-made emergencies (like wars) and natural disasters. The term often carries an international connotation, but this is not always the case. It is often distinguished from development aid by being focussed on relieving suffering caused by natural disaster or conflict, rather than removing the root causes of poverty or vulnerability.

The provision of humanitarian aid or humanitarian response consists of the provision of vital services (such as food aid to prevent starvation) by aid agencies, and the provision of funding or in-kind services (like logistics or transport), usually through aid agencies or the government of the affected country. Humanitarian aid is distinguished from humanitarian intervention, which involves armed forces protecting civilians from violent oppression or genocide by state-supported actors.

The Geneva Conventions give a mandate to the International Committee of the Red Cross and other impartial humanitarian organizations to provide assistance and protection of civilians during times of war. The ICRC, has been given a special role by the Geneva Conventions with respect to the visiting and monitoring of prisoners of war.

The United Nations Office for the Coordination of Humanitarian Affairs (OCHA) is mandated to coordinate the international humanitarian response to a natural disaster or complex emergency acting on the basis of the United Nations General Assembly Resolution 46/182.

The Sphere Project handbook, Humanitarian Charter and Minimum Standards in Disaster Response, which was produced by a coalition of leading non-governmental humanitarian agencies, lists the following principles of humanitarian action:

  1. The right to life with dignity.
  2. The distinction between combatant and non-combatants.
  3. The principle of non-refoulement.

[edit] Development aid

Main article: Development aid

Development aid is aid given by developed countries to support development in general which can be economic development or social development in developing countries. It is distinguished from humanitarian aid as being aimed at alleviating poverty in the long term, rather than alleviating suffering in the short term.

The term "development aid" is often used to refer specifically to Official Development Assistance (ODA), which is aid given by governments on certain concessional terms, usually as simple donations. It is given by governments through individual countries' international aid agencies and through multilateral institutions such as the World Bank, and by individuals through development charities such as ActionAid, Caritas, Care International or Oxfam.

The offer to give development aid has to be understood in the context of the Cold War. The speech in which Harry Truman announced the foundation of NATO is also a fundamental document of development policy:

In addition, we will provide military advice and equipment to free nations which will cooperate with us in the maintenance of peace and security. Fourth, we must embark on a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas. More than half the people of the world are living in conditions approaching misery. Their food is inadequate. They are victims of disease. Their economic life is primitive and stagnant. Their poverty is a handicap and a threat both to them and to more prosperous areas. For the first time in history, humanity possesses the knowledge and skill to relieve the suffering of these people.

[edit] Specific types

  • Project aid: Aid is given for a specific purpose e.g. building materials for a new school.
  • Programme aid: Aid is given for a specific sector e.g. funding of the education sector of a country.
  • Budget support: A form of Programme Aid that is directly channelled into the financial system of the recipient country.
  • Sectorwide Approaches (SWAPs): A combination of Project aid and Programme aid/Budget Support e.g. support for the education sector in a country will include both funding of education projects (like school buildings) and provide funds to maintain them (like school books).
  • Food aid: Food is given to countries in urgent need of food supplies, especially if they have just experienced a natural disaster.
  • Untied Aid: The country receiving the aid, can spend the money as they chose.
  • Tied aid: The aid is used by the country donating it to build infrastructure, purchase goods etc.
  • Technical assistance: Educated personnel, such as doctors are moved into developing countries to assist with a program of development. Can be both programme and project aid.

[edit] OECD Categories

The Organisation for Economic Co-operation and Development's Development Assistance Committee puts foreign aid into three categories:

[edit] Criticism of aid

Aid is seldom given from motives of pure altruism, for instance it is often given as a means of supporting an ally in international politics; it may also be given with the intention of influencing the political process in the receiving nation. Whether one considers such aid bad may depend on whether one agrees with the agenda being pursued by the donor nation in a particular case. During the conflict between communism and capitalism in the twentieth century, the champions of those ideologies, the Soviet Union and the United States, each used aid to influence the internal politics of other nations, and to support their weaker allies. Perhaps the most notable example was the Marshall Plan by which the United States, largely successfully, sought to pull European nations toward capitalism and away from communism. Aid to underdeveloped countries has sometimes been criticized as being more in the interest of the donor than the recipient, or even a form of neocolonialism.[2] Asante lists some specific motives a donor may have for giving aid: defense support, market expansion, foreign investment, missionary enterprise, cultural extension.[3] In recent decades, aid by organizations such as the International Monetary Fund and the World Bank has been criticized by some as being primarily a tool used to open new areas up to global capitalists, and being only secondarily, if at all, concerned with the wellbeing of the people in the recipient countries. This is a controversial subject.

Besides criticism of motive, aid may be criticized simply on the ground that it was not effective: ie., it did not do what it was intended to do or help the people it was intended to help. This is essentially an economic criticism of aid. The two types of criticism are not entirely separate: critics of the ideology behind a piece of aid are likely to see it as ineffective; and indeed, ineffectiveness must imply some flaws in the ideology. Statistical studies have produced widely differing assessments of the correlation between aid and economic growth, and no firm Aiversity. [4]

Many criticize U.S. Aid in particular for the policy conditionalities that often accompany it. Emergency funds from the International Monetary Fund (IMF) and World Bank, for instance, are linked to a wide range of free-market policy prescriptions that some argue interfere in a country's sovereignity. Policy prescriptions from outsiders can do more harm as they might not fit the local environment. The IMF can be good at helping countries over a short problematic financial period, but for poor countries with long lasting issues it can cause harm. William Easterly, in his book "The White Man's Burden" has argued that if the IMF only gave adjustment loans to countries that can repay it, instead of lending repetitively even if conditions are not met or forgiving debts it would keep its credibility.

In an episode of 20/20, John Stossel showed flaws in the distribution of the foreign aid, and the governments of countries receiving aid.

  • Food given as aid often ended up on markets being sold privately
  • The government receiving aid often had secret bank accounts in which it hid foreign aid money for private purposes

James Shikwati, a Kenyan economist, has argued that foreign aid causes harm to the recipient nations, specifically because aid is distributed by local politicians, finances the creation of corrupt government bureaucracies, and hollows out the local economy.

In an interview in Germany's Der Spiegel magazine, Shikwati uses the example of food aid delivered to Kenya in the form of a shipment of corn from America. Portions of the corn may be diverted by corrupt politicians to their own tribes, or sold on the black market at prices that undercut local food producers. Similarly, Kenyan recipients of donated Western clothing will not buy clothing from local tailors, putting the tailors out of business. [5]

In response to aid critics, a movement to reform U.S. foreign aid has started to gain momentum. In the United States, leaders of this movement include the Center for Global Development, Oxfam America, the Brookings Institution, InterAction, and Bread for the World. The various organizations have united to call for a new foreign assistance act, a national development strategy, and a new cabinet-level department for development.

[edit] Indicators of good/bad aid

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As mentioned in the previous section aid can sometimes do more harm than good. It is therefore important to understand the indicators for good aid.

  • Aid cannot be a top down effort done by outsiders without feedback and interaction of locals. In most cases the understanding of local conditions and the willingness to understand them is not given. Without that aid can throw the local system out of balance and thus do more harm.
  • Aid agencies operating through bad governments might not reach the needy people. (e.g. sales of materials on black markets, aid filling pockets of government workers)
  • Aid agencies often are accountable to donors (or not even) and not aid receivers. Therefore the aid agency might focus its efforts on items that guarantee a good press visibility instead of focus on the best solution. (e.g. treatment for AIDS victims is very expensive in comparison to prevention of the disease, where effort would be better spent). Also it might focus on quantity and leave quality aside (e.g. school enrollment counts, the number of pupils per class might not). Big plans (e.g. world peace) sound wonderful, but might not be realistic, it would be better to focus on fewer goals that are measurable (and reachable).
  • Aid agencies need to be accountable. Collective accountability means no real accountability.

("The white man's burden" by William Easterly)

[edit] See also

Look up aid in Wiktionary, the free dictionary.

[edit] Notes

  1. ^  Lars Schoultz, “U.S. Foreign Policy and Human Rights Violations in Latin America: A Comparative Analysis of Foreign Aid Distributions”, Comparative Politics, Volume 13, Number 2, January 1981 (2 of the graphs from the study can be found here)
  2. ^  Martha Knisely Huggins, Political Policing: The United States and Latin America, Duke University Press (July 1998) ISBN 0-8223-2172-6 p. 6

[edit] References

  • Håkan Malmqvist (2000), Development Aid, Humanitarian Assistance and Emergency Relief, Ministry for Foreign Affairs, Sweden [1]
  • The White Man's Burden : Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good / William Easterly (2006) ISBN 1594200378
  • Andrew Rogerson with Adrian Hewitt and David Waldenberg (2004), The International Aid System 2005–2010 Forces For and Against Change, ODI Working Paper 235 [2]
  • The US and foreign aid assistance [3]
  • Millions Saved A compilation of case studies of successful foreign assistance by the Center for Global Development.
  • ActionAid, May 2005, "Real Aid" - analysis of the proportion of aid wasted on consultants, tied aid, etc

[edit] Cross references

  1. ^ http://gbcghana.com/news/21779detail.html
  2. ^ S.K.B. Asante, "International Assistance and International Capitalism: Supportive or Counterproductive?", in Gwendolyn Carter and Patrick O'Meara (eds) African Independence: The First Twenty-Five Years, 1985; Bloomington, Indiana, USA; Indiana University Press. p. 249.
  3. ^ S.K.B. Asante, "International Assistance and International Capitalism: Supportive or Counterproductive?", in Gwendolyn Carter and Patrick O'Meara (eds) African Independence: The First Twenty-Five Years, 1985; Bloomington, Indiana, USA; Indiana University Press. p. 251.
  4. ^ Djankov, Montalvo, Reynal-Querol (2005). The curse of aid. The World Bank. http://www.econ.upf.edu/docs/papers/downloads/870.pdf
  5. ^ Thilo Thielke (interviewer), translated by Patrick Kessler. "For God's Sake, Please Stop the Aid!" http://www.spiegel.de/international/spiegel/0,1518,363663,00.html

[edit] Further reading

[edit] External links

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