JOURNAL ON FOREIGN AID

SOUTHERN NEW HAMPSHIRE UNIVERSITY
SCHOOL OF COMMUNITY ECONOMIC DEVELOPMENT.

ICD 533: PRINCIPLES AND PACTICES OF DEVELOPMENT.
JOURNAL ON FOREIGN AID.

INSTRUCTORS: MICHEL ADJIBODOU

DR. SINDA HUSSEIN SINDA
CENTER ARUSHA.

STUDENT: JOSEPH CLEMENCE.

TABLE OF CONTENTS:

1.0 Introduction: 3
2.0 What is Foreign Aid? 3
3.0. Who are the Recent Major Donors to the Developing countries?. 3
4.0 How the Foreign Aid is channeled to the poor countries. 4
5.0 What is Foreign Aid Used For.? 4
6.0 Types of Foreign Aid provided to Developing Countries. 4
8.0 Conclusion. 5

1.0 Introduction:

One of the Millennium development goals major strategy is to provide aid to the poor countries to help them to develop there economy to come out of poverty. Many national budgets for poor countries are subsidized by the developed countries. International organizations are also providing lot of support to the poor countries. In spite of all these the poverty situation in developing countries has not changed much. This paper discusses foreign aid, major donors, the way it is offered to the poor countries, what is it used for, types of foreign aids provided and whether it is effective in bringing intended changes.

2.0 What is Foreign Aid?
Foreign Aid is the help mostly economic, which may be provided to community 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. It is an extension of economic assistance from one nation to another. Foreign aid is a policy instrument used by most industrialized countries to achieve a variety of political, economic, and military purposes, as well as to address humanitarian concerns and assist in the long-term development of the recipient countries. (Wikipedia).
3.0. Who are the Recent Major Donors to the Developing countries?.
The most generous aid donors in recent years, measured in terms of amounts contributed, have been Japan and the United States, followed closely by the major industrialized nations of Western Europe. However, different countries appear as the most generous aid donors when their contributions are measured as percentages of their gross national product (GNP). Judged by this scale, the Scandinavian countries, especially Norway and Sweden, dedicate a relatively high percentage of their gross national product to foreign aid, while one of the most generous donors outside Europe is Kuwait.

4.0 How the Foreign Aid is channeled to the poor countries.
Aid may be given directly from one country to another or through multilateral institutions such as the International Bank for Reconstruction and Development (the World Bank), the International Monetary Fund, and various regional development banks. In recent years some aid donors, notably the United States, have increasingly emphasized direct government-to-government bilateral assistance, cutting back on funding through the international development banks and other United Nations bodies. Nevertheless, these multilateral institutions continue to play a crucial role in providing aid to developing countries in an attempt to raise living standards. The forms that aid takes are varied, ranging from the provision of long-term loans on favourable terms to the provision of technical skills and training.
5.0 What is Foreign Aid Used For.?
Perhaps the most striking example of the use of foreign aid to meet a wide variety of objectives, political and strategic as well as economic and humanitarian was the European Recovery Program, commonly known as the Marshall Plan, which was begun after the end of World War II. This US assistance to war-ravaged Western Europe aided in the reconstruction of important European allies in the Cold War, while spurring global economic development. Such aid improved international trade generally, advanced US diplomatic and military objectives, and met human needs, while also proving highly beneficial to the US national economy.
6.0 Types of Foreign Aid provided to Developing Countries.
The type of aid offered varies according to the recipient and the objectives involved. Disaster relief, for example, is usually made on a strict grant basis, while development aid is often in the form of inexpensive loans. Educational aid to provide much-needed skills may range from the operation of skills to the training of lawyers, government officials, or business people.

7.0 Is Foreign Aid Working?
Critics of international aid programmes argue that they are often ill-targeted, create dependency, or distort priorities, and that much aid money is, in some cases, siphoned off by corrupt officials in the recipient countries. They therefore maintain that aid generally has a damaging role in development economics. In response to such criticisms, much greater scrutiny has been applied recently to aid packages and the conditions on which they are given. There has also been greater encouragement of private investment in developing countries, in the belief that it is likely to be of more help in transforming their economies than aid, But this has not been practical in Tanzania For example as the most mining companies are produced direct from mine drilling areas to abroad and there is no money circulation in our countries. It is also obvious in our country that the mining sector is the great area of exploitation of our county by international metropolitants. (wikipedia).
8.0 Conclusion.

Foreign aid is provided to the poor communities in order to alleviate poverty. To minimize the differences which exist between the rich (developed countries) and the poor (developing countries). Does it make changes? The answer is not. Most of the Foreign Aids are misused by corrupt leaders and don not real address the intended needs. But how far the loans address the cause of poverty. They are perhaps treating the symptoms of poverty and they can’t make change by doing that. Are the aids build up on the existing social changes or are serving the needs projected outside the community? Were there effective community organizing/organization before support? Is the Foreign Aid aimed to buy luxurious cars for leaders? Is that addressing poverty? Is a foreign aid a right solution to poverty existing in developing countries? Is trade liberalization benefiting the poor? Should poverty be alleviated by the people out of the poor themselves? Did the economic growth of the developed countries brought about by Foreign Aid? There is a need for both Developed communities and developing communities to start looking out of their boxes and find out the real causes of poverty and thinking of social changes to build upon which will directly address the cause of poverty. However the major cause for the less impact of foreign aid to the poor is mismanagement and misuse of the aid funds by the recipient countries triggered by lack of integrity and over selfishness.

REFERENCE:
1. Prospect Magazine Issue 128, November 2006. Is Foreign Aid Working?
2. PIPA, American on Foreign Aid and World Hunger. A study of U.S Public Attitude. February 2nd 2001.
3. Wikipedia encyclopedia.