Term Paper on "Foreign Aid"

Term Paper 5 pages (2103 words) Sources: 1+

[EXCERPT] . . . .

Foreign Aid is defined as the global movement of capital goods, or services that is for gainful use for other countries and their inhabitants. Foreign Aid on the official level is disbursed primarily in two types viz capital transfers, in cash or kind, either as grants or loans and technical help and training, normally as grants through human resources and technical equipment. Characteristically, arguments has revolved around the issue if a new foreign aid bureaucracy must be formed, or if the present one must be dissolved, rationalized or made a part of the foreign ministry. Another issue that has cropped up is the issue, if the foreign aid budget must be without any ambiguity, hiked minutely, or curtailed by a small proportion. These themes must be rejected as unimportant; however they neither involve the public, nor notify it. Certainly, argumentative themes similar to this permits the government in the developed countries to divert themselves from the increasingly basic and troublesome issues, as also from their duty to educate their individual citizens regarding the problems which foreign aid solves as well as causes it.

At this point we will delve into whether foreign aid has realized it's objective or otherwise. Schemes are very few in number that has used as much resources with as few encouraging outcomes as foreign aid. From the period of Second World War, the U.S. has spent in excess of $1 trillion in financial aid to other nations. It has aided other nations directly and also by its U.S. financed multilateral institutions as the International Monetary Fund, the World Bank, and the United Nations, have poured more than hundred of billions of dollars. Whether bilateral or multinational, according to rules the original objective of foreign aid - the movement of financial aid from a particular government to another one was to motivate economic development. but, with the enactment of the U.S. Foreign Assistance Act of 1973 and the taking up of the New International Economic Order by the General Assembly of the United Nations in 1974, the added objective of directly enhancing the standards of living of the lowest rung in the beneficiary nations was added to, in case it was indeed unable to replace the initial objective.

Unequivocally, "aid" at least as per its initial plan, was to be provisional. When the potential for self-sufficient economic growth had been attained, the necessities for "aid" will no more be needed. However, as Paul Craig Roberts has noted, instead of looking for development, majority of the Third World nations appear to be more dependent than ever on aid. Indeed, it was specifically due to the mounting discontentment with the outcomes of foreign "aid" that the fiscal changes of 1973 modified the aim of the program. According to Eberstadt, the problem was that the strategy of export-oriented, self-sufficient growth that we campaigned from 1940s failed in its effort to be beneficial for the average inhabitants of the nations it changed. However, by either objective, that of producing self-sufficient economic growth or bettering the fate of the poverty stricken sections of the beneficiary nations, the substantiation gives precious miniscule support for the disagreement that "aid" genuinely aids.

The sum of net transfer of capital, private as well as public, from the West to the developing countries between 1950 and 1985 totaled to an astounding amount of over $2 trillion in 1985 prices. Private investment represented for approximately 25% of this sum, however, its share has gone down from about 40% during the 1950s to just about 16% during the 1980s. Eberstadt observes that this $2 trillion was sufficient to buy not just the total companies listed in the NYSE but apart from that, the whole American farm system. What has this immense transfer achieved? "Aid" has been direct cause for the destitution of big sections of the population in regions like the U.S. trust regions of Micronesia and other places. In a lot of regions "aid" has in fact damaged the chances of continued economic growth by forcing local producers, particularly the peasants to lose their business.

Similar was the situation in nations like Micronesia, Bangladesh, India, Egypt, Haiti, Guatemala, Kenya, and a lot of other countries. According to several specialists food "aid" to India might be the cause for the starvation of millions of India. Other researches have proved that in fact malnutrition in Bangladesh really went up with the growth of food aid to the nation. It is doubtful that these are stray incidents. Peru, Haiti, and Guatemala have either abstained from accepting U.S. "food aid" or appealed to the U.S. government to curb such "aid." Africa, which has historically been an exporter of food, lost this capability to meet its domestic food problem, observed Sowell, specifically when donor agencies started to stifle Africa with external project aid. Several observers think that the association is not inadvertent and that the economic corrosion of Africa, and especially its catastrophic agricultural situation was effected partly because of inflow of "aid."

More thoroughly, it is observed by the World Bank that Official Development Assistance amounted to 5% of the gross domestic investment of the low-earning nations of South Asia, but more than 40% in the low-earning nations in Africa. It goes on to communicate that in case of the decade of the 1970s per capita income in South Asia's low-earning nations went up five times quicker compared to the growth in the low-income nations of Africa. On the other hand, the greater economically developed regions of the globe like the Western Europe, the United States, and Japan - developed in the absence of aid. Likewise, Hong Kong and Singapore, two of the most economically vivacious nations since the last two decades, got only insignificant "aid." Ultimately, Taiwan and South Korea are sometimes hyped as "foreign aid" success stories. Nevertheless, their inspiring economic performances started merely after large-scale economic aid from the U.S. was stopped. It has been seen really in every instance after the inflow of "aid" there has been episodes of huge, inefficient, scrounging government bureaucracy whose mere presence undermines the capability of the beneficiaries for continued economic growth.

The outcomes of previous policy-oriented lending are not much the reason for confidence. A lot of governments are just not keen in policy reforms. Several of them are eager about the development of their nation, however are not ready to pay the political price for adopting the policies needed to do such. In case of others, ideological objectives are mot important. Many others simply want to hang on to power. It is not necessary for someone to be a spontaneous detractor of government to identify that such rule is an obstacle to development. Alan Carter of Heythrop College in London has penned that Third World states are neither the means of international capital nor of an distinct bourgeoisie, but rather are reasonable performers who will bring industrialization in their economies when ready, however who frequently find it in their benefits to be collaborators in the dependent development or also underdevelopment of their dependent economies.

In these instances, he cautions, aid mainly caters to carry out governments which are complicit in the tapping of their human capital and the annihilation of their environment. Regrettably, that has been the state of matter of the IMF and the World Bank that have years together allegedly been guaranteeing policy "reform" across the globe. Hitherto, majority of the governments have just pocketed the money and fled, resulting in the establishments which have been financed by the taxpayers to grant fresh loans. Aid can hold back the promise to reform of even more committed governments. It has been cautioned by Cindy Williams of the Congressional Budget Office, that in the absence of reform, aid can strengthen policies which do not progress growth. Through covering-up the torments of economic failure, development assistance lets borrowers to holdup reforms, deteriorating the basic problem.

Especially notable are researches by Peter Boone of the London School of Economics or LSE and the Center for Economic Performance. In an evaluation of the experience of about 100 countries, he came to the conclusion that overseas transfers did not have any effect on the intensity of investment in the beneficiary nations. Long-term aid is not a way to build growth, stated by Boone. His outcomes produced potent corroboration against a lot of poverty trap models that forecast that aid transfer would permit countries to set itself free from a low-income equilibrium or poverty trap. Boone also evaluated the influence of foreign assistance on beneficiary rule and saw that it was the politically privileged that cornered most of the benefits from aid. As he described, Aid in no way promotes economic development for two factors: Dearth of capital is not the reason behind poverty, and it is not most advantageous in case of politicians to regulate skewed policies while they get aid flows.

Also several supporters of consistent foreign assistance admit the disappointing outcomes of previous policies. Taking the example of U.S. Agency for International Development… READ MORE

How to Reference "Foreign Aid" Term Paper in a Bibliography

Related Term Papers:

Foreign Aid in Haiti Capstone Project

Foreign Aid in Haiti

The natural disaster that struck Haiti at the beginning of 2010 can be considered as an important international crisis from several points-of-view. Natural disasters are phenomena… read more

Capstone Project 10 pages (3462 words) Sources: 3 Topic: Latin America / Mexico / Caribbean

---

Foreign Relations of U.S Essay

Foreign Relations of the U.S.

This is a guideline and template. Please do not use as a final turn-in paper.

What were the initial aims, scope and means of the… read more

Essay 10 pages (3375 words) Sources: 1+ Topic: Military / Army / Navy / Marines

---

American Foreign Policy Analysis of the Middle East From the President's Perspective Essay

American foreign policy as it manifests itself in the Middle East has long been a struggle. The last few decades have demonstrated America's attempts at finding allies and the challenges… read more

Essay 13 pages (4630 words) Sources: 17 Topic: Israel / Palestine / Arab World

---

U.S. Foreign Policy and the Middle East Term Paper

U.S. Foreign Policy and the Middle East

Just as the Japanese attack on Pearl Harbor forced United States into World War II, the attack on the World Trade Center during… read more

Term Paper 3 pages (956 words) Sources: 1+ Topic: American History / United States

---

Disagreed: "In Matters of Foreign Essay

That was because we wished in this first attack to avoid, insofar as possible, the killing of civilians. But that attack is only a warning of things to come. If… read more

Essay 10 pages (3169 words) Sources: 7 Topic: American History / United States

---

View 100+ more related papers  >>