As George Marshall once said, “It is logical that the United States should do whatever it is able to do to assist in the return of normal economic health in the world, without which there can be no political stability and no assured peace. Our policy is directed not against any country or doctrine but against hunger, poverty, desperation and chaos. Its purpose should be the revival of a working economy in the world so as to permit the emergence of political and social conditions in which free institutions can exist.”
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Foreign aid is basically the transfer of money, goods or services from a country, intended to help out a country or people in need. Contrary to popular belief that a large percentage of a country’s budget goes to foreign aid, not much of the budget actually goes to foreign aid. In 2014, 1% of the USA’s budget went to foreign aid, which was about $135 billion US dollars. Foreign aid is aimed towards promoting diplomacy and goals such as peace & security, democracy & human rights, collective economic growth, improving public health & education systems, humanitarian assistance after disasters, and protecting The environment. Foreign aid began mostly after World War 2. The World Bank was set up in 1944 as the International Bank for Reconstruction & Development, it was aimed at helping Europe rebuild. During the Cold War, the US and the allies used it as a political tool to try to win allegiances and punish the countries that did not agree with them or went against them. As expected, some researchers have also found that donor countries are more likely to provide aid to strategic partners. The US sends hundreds of millions a year to Israel and over 1 billion to Egypt, whereas France is more focused on their former colonies and Japan directs aid to countries with similar political interests.
Most rich countries do not help poor countries just for the sake of doing the right time but also because it is in their own interests as well. In many cases, it is used to encourage trade with the receiving country. For example, if the US sends aid to a country that turns it around and uses it to buy US exports. Alternatively, it is quite common for a rich country to help educate the people of a poor country and once a certain amount of the population are educated to a level, the rich country can open businesses in that country such as Tesco or Nike, and benefit from it. Is this wrong ? No, it is human nature to want the best for yourself. If the aid given benefits the people who need it, even if the giving country is helping in their own interest and benefit from it, so what?
However in some cases where the recipient country is run by a corrupt leader, the aid is not used or its intended goals. Some economists even say that it encourages corruption and keeps bad government in power. The African Union said that corruption costs the continent $148 billion every year. The Heritage Foundation stated that two World Bank entities provided nearly $70 billion [in 1995’s dollar value] in development assistance to 48 countries in sub-Saharan Africa between 1980 and 2002. But at least twenty-three of those countries had a negative growth in their gross domestic product (GDP) during that period. A study by U.S. News & World Report quotes analysts as saying that more than 20 percent of the funds disbursed by the bank each year may be wasted through corrupt practices. A Northwestern University professor, Jeffrey Winters, says his research found nearly 100 billion dollars of World Bank funds have been squandered by corruption over the years. The bank rejects these claims and says it is difficult to calculate how much of its funds have been misused by corruption.
There are more aspects in which rich countries help poor countries. Other than financial aid, food, health, education and so on are also provided by rich countries to help those struggling. It is believed that food aid increases local supply of food which reduces the cost of food, thus, hurting local farmers. So in theory, lower prices could lower food production. But on the other hand, there is no doubt that public health aid is beneficial and needed. Public health aid nearly eliminated the parasitic Guinea Worm in the sub-Saharan Africa. In 1986, 3.5 million new cases of the parasitic Guinea Worm were reported. Following a lot of aid from other countries, the number dropped greatly. In 2015, just 126 new cases were reported. According to the World Health Organisation, between 2000 and 2015, the number of new cases of Malaria fell by more than a third. Malaria death rates fell by 60% in those years as well. This is all due to foreign aid, Africa is struggling financially and would not have been able to survive the epidemic without the aid of other countries. Furthermore, some underdeveloped countries aren’t able to maximize their otherwise rich natural resources, but with foreign support, it is possible.
However, there are many non-supporters of foreign aid. Many argue that foreign aid is like drugs, it provides temporary relief and feel good but ruins the immune system in the long run. ‘Give a man a fish and you feed him for a day, teach him how to fish and you feed him for a lifetime’. If you give a struggling country too much help, they will not know how to survive on their own and may be left even worse off than they were before receiving the aid. Then if you suddenly stop helping them or providing aid, especially economical aid, their economy will have a sudden drop or ‘crash’. What this means is that once poorer countries receive foreign aid, they develop a dependency on it and it makes it harder for them to survive on their own in the long run. It is also possible that rich countries know this and provide aid for this reason exactly. Rich countries by common sense, wouldn’t give poorer countries money for totally humanitarian reasons, they usually have hidden agendas. Many donor countries want to have leverage so that in case of a future war or disaster, the receiving countries have to help them and take their side, as well as to manipulate the economy in their favour.
A good example of the successes of foreign aid, is the Marshall Plan, formally known as the European Recovery Program. It was a plan developed by former Secretary of State George Marshall in 1947 to help Europe rebuild after the war and at the same time contain the spread of communism by isolating the Soviet Union and promoting capitalism to people all over Europe by giving them money to rebuild. Today, many say it is history's most successful structural adjustment plan. Congress approved the plan and the US gave out $13 billion in aid, which if adjusted for inflation adds up to more than $ 130 billion today. The objective was to help restore production in Europe, expand trade, and contain the spread of communism. The plan worked marvellously, the countries that accepted assistance saw their GNPs (Gross National Product) jump, in some places their economies were even doing better than before the war. President Truman later even extended the plan to other developing countries around the world because it was doing so well.
In conclusion, there are many good sides to foreign aid. Some underdeveloped countries aren’t able to maximize their otherwise rich natural resources, but with foreign support, it is possible. Foreign aid also helps rebuild lives by providing livelihoods and shelter right after a disaster so that victims can start over. Furthermore, medical missions are able to offer free medical & healthcare products as well as services where they are needed the most and foreign aid also promotes sanitation which helps to generally prevent diseases and infections. In addition, Industrial development projects supported or created by foreign aid create more jobs opportunities thus reducing the unemployment rate, as well as improve the infrastructure and overall development of the local community. I believe that the pros in this situation outweigh the cons. No matter how much of the foreign aid money is directed at the wrong areas such as corrupt governments or otherwise, some of the money still has to get directed at those who need it and a little bit is better than nothing. Instead of cutting off foreign aid, providing countries should put more effort in to verifying where the money goes and giving it to trustworthy areas.
In my opinion, rich countries should help poor countries. The world can only improve if everyone moves forward together, not if some countries are very rich and some very poor. Having said that, foreign aid often comes with a hidden agenda, hence, receiving countries should think carefully and go through the fine print well before accepting foreign aid. I believe that rich countries have an obligation to help poorer ones. Why? Because morally, it is the right thing to do. Because 800 million people went to bed hungry last night and 19,000 children will die today of easily preventable causes.