To begin with foreign aid is the voluntary transfer of public resources from a government to another independent government, non-governmental organizations and to international organizations. Aid may serve the function of giving a signal of diplomatic approval, strengthening military ties, rewarding governments for good behavior desired by the donor and providing infrastructure needed by the donor country for resource extraction or to gain other kinds of commercial access. (Jeffrey, 2005). Humanitarian and selfish purposes are partly responsible for the giving of aid. The term foreign aid refers only to official development assistance (ODA). ODA is defined as the flow of official financing to the developing world that is concessional in character namely grants and loans with at least a 25 percent grant component, ODA is generally administered with the objective of promoting the economic development and welfare of developing countries and comprises both bilateral aid that flows directly from donor to recipient governments and multilateral aid that is channeled through an intermediary lending institution like the World Bank since the third world lack capital necessary for making income generating investments. Moreover, while it is common to treat ODA and foreign aid as the same thing this is misleading. Assistance funded by non-governmental organizations is foreign aid but not ODA. The above definition indicates that foreign aid is not always a free resource transfer and often arrives with economic and political conditions (Roger, 2008). In many cases official donors require that recipient countries to pursue reforms or policies that the donors feel should promote economic growth or development in their own countries and this reduces its effectiveness.
To add on foreign aid is being attributed for bringing harm than good to countries that are most in need of it considering the fact that aid whether in the form of financial, economic, social and political assistance perpetuates the dependency syndrome (David, 2002).The dependency syndrome is an attitude and belief that a group cannot solve its own problems without outside help. It is a weakness that has been exacerbated and made worse by foreign aid hence this creates a situation where there is no local development in the a country as it is now becoming dependent on the donor community for instance if an outside agency ,be it central Government or an NGO comes to a community and provides aid e.g. borehole for water supply it is natural for the community members to see it as belonging to the outside agency hence when that outside agency goes away or runs out of funds the community members will have no motivation to repair and maintain the facilities left behind or to sustain the service thereby perpetuating the donor syndrome hence in this view one may say that aid brings more harm than good since it causes the dependency syndrome which limits growth and development of local communities and third world countries.
Furthermore, aid is being blamed for causing more harm than good to countries that are in need of assistance considering the fact that aid on itself does not bring development of the poor countries for instance financial aid given by international institutions such as the international monetary fund IMF and the world bank is paid back in higher interests for instance Giving financial aid like loans only leave these poor countries deeper in debt and poverty (William, 2006). since the IMF can sometimes be reckless in approving loans for programs that are not beneficial to the recipient country but instead more harmful these institutions also point out that countries become poorer because instead of using their funds to invest in profitable projects and channel their income to other investments they use what they must pay their debts. Therefore, in this view one may agree to the fact that aid has brought more harm than good as financial aid leaves the borrowing country heavily in debts.
In addition foreign assistance and aid has brought more harm than good in the recipient country basing on the fact that there is risk of corruption as aid does not go to the intended people, there is a higher likelihood that foreign financial support do not reach the rightful recipients but go to the hands of corrupt political officials. Opponents of financial aid argues that in most cases help fails to reach the right people who are really in need of assistance as in most cases poor countries are characterized by corrupt officials who use the funds for themselves at the expense of the poorest members of the communities (Moyo,2009).Whereas in some instances receiving countries can also misuse foreign aid for instance aid coming with the sole purpose of resuscitating hunger and starvation in the receiving nations could be used to maintain the funding of illegal activities and the strengthening of armed forces and militias when it is actually supposed to be used for more important issues like the resuscitating of hunger and combating poverty therefore in this regard one may say that foreign aid does not contribute to the fighting global poverty and hunger.
Whereas in most cases there is a hidden agenda of foreign owned Corporations rendering aid for instance aid is sometimes given to a country or recipient to benefit foreign owned corporations and entities. These include transnational cooperation’s that engage into the looting of natural resources and financial profits back to their home countries whilst in some instances aid is administered so that cooperation’s may get trading and mining concessions in the poor country (Robert,2006). Donor countries with selfish interests will donate to countries especially the nations with bountiful natural resources and try to exploit them they would provide funds to bring a particular country to get influenced and force them to serve military interests and other interests therefore donor nations may do evil things like dump toxic wastes, harm local environments and destroy their local culture therefore the help is not actually directed to the less fortunate but to its own people hence in this regard one may say that aid has brought more harm than good.
Moreover aid has impacted on the economic development of its recipient countries considering the fact that aid results in economic bondage as evidenced by the fact that aid would also change the whole society, historically it is commonly believed that if a government has taxation, governments have to make sure that foreign aid would not affect the development and independence of state’s market however foreign aid can potentially undermine taxation’s link between the people and the government because it would sever that link. Therefore foreign aid may retard economic development, (Minear, 2002) the idea that foreign aid may create for exporting is dented because when a developing country gets millions of foreign money there is upward pressure on the exchange rate this country’s economy will become less competitive moreover foreign aid when given in the form of loans can earn interest by developed countries and It is generally believed that foreign aid would let undeveloped countries be in debt where production self-sufficiency is unrealistic dependence on the world market is unavoidable.
Furthermore, poor countries tend to rely on foreign aid and international exchange. In a long term it makes undeveloped countries’ sustainable hence this shows that aid is much detrimental to the development and growth of nations.
To add on aid results in political bondage and lack of political sovereignty in the recipient country considering (Gibson, 2005.et al)the fact that super powers may lend political or military support to one country with the hope of installing a puppet government in that country which listens to its commands for instance the military aid provided to Mobutu Sese Seko in the early 1960s was a move aimed at getting some diamonds mining concessions in the DRC whereas this international cooperation also influenced the political crisis in DRC leading to civil wars and conflicts (McInnis,2011) hence in his regard one can say that aid is much disadvantageous as it brings about political bondage and lack of political sovereignty in the recipients country therefore aid has done more harm than good as stipulated above.
However on the other hand while aid may be regarded as bad it can however be of much benefit to other countries tracing this against the backdrop that aid can help ease poverty in poor third world countries since the developed and developing countries will work hand in hand to help the developing and poverty stricken countries alleviate themselves hence this can help solve the problem of impoverished nations in addition with millions of families living below the poverty lines contributions in any way through money, trainings and medical assistance can promote equality and better standards of living for instance international organizations such as the world food program(WFP) and the united nations children’s fund (UNICEF) are renowned for assisting poverty stricken sub-Saharan countries with food and shelter whereas UNICEF has been working in conjunction with poor governments to provide free basic primary and secondary education hence in this regard one may agree to the fact that although aid is bad it has also managed to ease the impact of poverty amongst the recipients countries.
Moreover foreign aid has brought development in some African states especially when we are to consider health aid administered through the world health organization (WHO) in fighting against diseases on the African continent for instance the world health organization has been appraised so much for providing free anti-retroviral treatment tablets in Botswana which has subsequently led to the lowering of the HIV/AIDS prevalence rates in the country which is alleged to have the highest HIV/AIDS prevalence rate in Africa (Margaret,1994) whereas on the other hand (WHO) in conjunction with the Medicines’ Sans Frontiers/Doctors Without Borders (MSF) have been amongst the major players that led to the reduction and management of the deadly Ebola virus that claimed the lives of millions in west African states, a task that African states alone could not have achieved hence in this regard one may say that foreign health aid is beneficial as it has led to the reduction of dangerous epidemics such as HIV/AIDS and the Ebola virus.
In addition foreign aid has been of much benefit in the recipient countries for instance foreign humanitarian aid in times of disasters can help save lives and ease the impact of disasters. Humanitarian aid represents a commitment to support vulnerable host populations that have experienced a sudden emergency and requiring ongoing assistance to maintain or improve their quality of life. Emergency response represents a response to a serious and unexpected natural or man-made emergency that demands an immediate reaction to reduce suffering and loss of life in the short term (Katoch, 2006)hence humanitarian aid in the form of food ,shelter ,building materials to ease the impact of disasters varying from manmade structural disasters or natural disasters such as earthquakes and cyclones is beneficial to the recipient country as in most cases disasters often impact without warning hence the country will be resource overwhelmed hence in such situation foreign aid in needed.
Whereas to add on financial loans provided by the IMF and World Bank accelerates industrialization and development programs in poor countries since governments in richer countries of the world have become increasingly aware of economic problems of their poorer neighbors.(Walker and Maxwell,2008) Foreign aid from developed countries and international organizations has become an important solution to the development of the human and material resources of these countries as the cure for the ills of underdevelopment with its high degree of success related to the high degree of foreign capital investment. Foreign aid has already become a universal panacea in industrialization and many developing countries have benefited from foreign aid. There are different forms of aids being offered by foreign governments and firms most of them would help in the creation of millions of job opportunities and teach new technology or management experience to undeveloped countries. It may be impossible to many modern factories operating without foreign technology whereas undeveloped countries governments are supported by foreign financial aid like World Bank hence in this regard foreign aid is very much beneficial to the development of the recipient country as shown above.
Moreover foreign aid is necessary in improving international relations since the humanitarian response of the international community has improved international relations dramatically and is a sign of goodwill and cooperation moreover foreign aid significantly gives a clear indication that the developed countries consider closer ties with developing countries in their economic and strategic interest for instance there has been significant bilateral agreements between China and Japan which aim provide technological, construction materials and machine parts in return for coal and crude oil by free or low price. In response, Japan and China adopted strikingly complementary foreign policies therefore in this regard one may view foreign aid as necessary for the development of the recipient country as aid helps in establishing bilateral agreements and international relations.
Conclusively aid has brought more harm than good to the recipient countries considering the fact that it results in political and economic oppression as the donor countries engage in activities that disrupt political stability in the recipient country whilst looting economic resources back to their home countries, aid perpetuates the dependency syndrome that results in little or no development at all whereas foreign aid in most instances does not reach the intended targets as it is intercepted by corrupt political officials that utilize the resources to their own benefit however it is also imperative to put in mind that foreign aid is beneficial in terms of encouraging development in the recipient country, food relief programs ease the impacts of natural disasters such as droughts whilst aid helps in establishing trade and bilateral international relations between countries.
Giving foreign aid to developing or under-developed nations has become common among first-world countries like the United States. This isn’t really surprising since extending a helping hand to poor areas has many obvious benefits, but many people point out that it can also have several adverse effects. Here are some of the advantages and disadvantages of foreign aid:
List of Pros of Foreign Aid
1. It helps alleviate poverty.
When first-world countries help those that are mired in poverty, they do a great deal in helping people survive. Food donations, for instance, ensure that deprived communities can have access to nutritious meals and keep hunger at bay. This is particularly helpful for little children, who need enough nutrition to grow physically and mentally. Monetary aid, meanwhile, can assist developing countries in constructing roads, buildings, telecommunications networks, and other types of infrastructure that can boost their economy and help them rise above poverty.
2. It helps those who are caught in crises.
Foreign aid is helpful not just for poor countries but also for those that are going through wars or famines or have experienced earthquakes, typhoons, and other natural disasters. Providing food and water to people in these areas can help them survive, while giving medical aid can keep diseases at bay and prevent them from becoming widespread epidemics.
3. It promotes better relationships between countries.
Foreign aid is a good way for a country to express goodwill to another and foster good diplomatic relations between them. It often looks like it’s a one-sided affair, but it’s also beneficial for the donor country since the nation receiving aid usually offers whatever it can to express its gratitude. One example is when a country allows another to put a military base in its premises in return for aid.
List of Cons of Foreign Aid
1. It promotes corruption.
In the ideal world, foreign aid always reaches the people who are in need and make a difference in their lives. Unfortunately, this doesn’t always happen in the real world. In many developing and under-developed countries, a large percentage of foreign aid (particularly in monetary form) is intercepted by corrupt government officials or organization leaders and placed in their own pockets. As a result, those who give aid incorrectly believe that they have made a difference in many people’s lives, while those who need assistance often don’t receive it and end up living in poor conditions.
2. It can be expensive for taxpayers.
Many first-world countries spend around one to twenty percent of their national budget on foreign aid. This is a huge amount that could otherwise have been spent on building more schools, creating more jobs, and doing other things that their people can enjoy.
3. It can lead to further difficulties for both countries.
As mentioned above, countries that give foreign aid often spend a large chunk of their budget. This can be detrimental since they most likely have their own financial problems to solve, yet they’re spending a large amount of money on other nations. Countries that receive foreign aid can also suffer because of it. They can end up being dependent on the assistance provided by other nations and may even become knee-deep in debt, especially when they receive financial help in the form of loans.
At the surface, foreign aid can bring a lot of benefits to countries that are in need. However, when people take a closer look, they may see a list of disadvantages that can come from it.
Crystal Lombardo is a contributing editor for Vision Launch. Crystal is a seasoned writer and researcher with over 10 years of experience. She has been an editor of three popular blogs that each have had over 500,000 monthly readers.