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The Effects of Foreign Aid

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Foreign aid is a voluntary transfer of resources from one or more country, bank, donor organisations to a poorer country that is not doing very well. The resources given are usually loans that have a huge sum of interest along with it, sometimes even limiting on what the loan of money can be used for. The UN sustainable development goals consist of 17 goals. While the loans given will be able to achieve some goals, others are not achievable with the help of loans. For example, the goal of achieving gender equality will not be able to be reached by the help of loans as it is up to what an individual believe. Furthermore, some individuals such as Muslims, believe in theories that male have priority over female due to religious beliefs, religion practices and culture. Additionally, the achievement of some goal are also restricted by the policies given with the loans to the countries.

Looking at the history of foreign policy, most of the donors are wealthier countries. As foreign aid is a relatively new concept, there is a risk. Thus only wealthier countries would take the risk to loan a large some of money to another country as the loan of money would not do much damage to them if the recipient is unable to pay back the money loaned. Although the main goals is said by the Organisation for Economic Cooperation and Development (OECD) to be to aid the poorest countries, it can be seen that donors are usually aiming for another goal. Most of the countries include high rates of taxes. However an exception would be China that aims to open business markets in countries they aid, in return charging them with little to no interest. Moreover, China at the same time is also a recipient country. China receives its loans from Japanese funded Asian development bank, lending 1.5 billion dollars annually to China for low carbon urban transport to help with the air pollution. Additionally the United Nation development program lends China money to help with its poverty issue. During 2001 to 2002,112 million dollars have been loaned to China (PRC). It has been stated by the United Nations Development Programme that between 1990 and 2005, more than 470 million people in China were lifted out of extreme poverty. However, a Chinese senior government official stated that there is still 82 million chinese in poverty in the year of 2014. Even though there is a huge amount of people lifted out of poverty, China is still till this day working to lift more people out of poverty.

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As compared to Mexico a recipient of foreign aid located in South America, foreign aid has played a huge role in achieving the sustainable development goal of lifting people out of poverty. Funded by America’s military and economic assistance, in the year of 2013, the amount funded is almost 419.94 million dollars for drug trafficking, recovery for natural events in Latin. Even though many lives. Till this day large sums of money is still needed to be loaned to Latin America. It has been recorded that $145 million dollars have been request to be loaned by the Global Health Program for the year of 2018. Additionally, Mexico is still very well known for drug trafficking. The year of 2006 to 2018, drug related homicides have increased tremendously. As compared to China, it is shown that foreign aid is not as effective as it had been for China

Another country that can be looked into is Zimbabwe. There are many countries such as the United States and China. Even though there is an upward growth by 2.4% in the year of 2017, stated by the African Development bank group, 72% of people still live under the poverty datum line. There is clearly an issue that does not allow Zimbabwe to achieve the UN sustainable development goals. United States and other international banks aiding Zimbabwe has given set policies for what the money loaned can be used for and along with a heavy interest rate. However the problem comes in with China, even though large sums of money is loaned to Zimbabwe with low to no interest rate, there is no policy of what the money can be used for. With Zimbabwe’s poor governance, the sum of money will just pile up. Resulting in more and more money being load to Zimbabwe without successfully achieving UN sustainable development goals. Thus comparing the countries, Zimbabwe and Mexico are only partially or unable to achieve UN sustainable development goals with the help of foreign aid. However China in the other hand is able to benefit from the foreign aid given.

To conclude, as seen by the effect of foreign aid on China, foreign aid is able to help a country achieve UN sustainable development goals giving the fact that policies are clearly stated by the donor. Also depending on the country that foreign aid is given to, if the country is somewhat wealthy they would not experience problems such as corruption that poorer countries will experience due to the inability to pay back all the money due to the high interest rates. I believe that if a proper and thought through policy is given from the loaners about the money that will be loaned, the country receiving the loan will be able to achieve UN sustainable development goals.

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