Foreign Aid: Pros and Cons

Pros: MORE than 1 billion people live in extreme poverty. If targeted effectively, foreign aid can make a positive contribution to improving people’s lives, reducing inequality and promoting justice. A fundamental principle for effective aid is that it should be focused on reducing poverty and be driven by those whose needs are being addressed. In other words, the interests and rights of the poor and marginalized must be at the center of any program. First, in humanitarian emergencies, lives are at stake. When people are in desperate need of food, water, medical care and shelter as a result of famine, conflict or natural disaster, who else will help? Such urgent assistance is the responsibility of nations and organizations that have the capacity to do so. In 1992 in Somalia the lives of desperate women and children were saved as a result of foreign aid. Foreign aid improves standards in the provision of health care, education and infrastructure, thus creating the foundation for economic and social development.

Humanitarian support is vital for the third world countries. As a result of extremely low standards of living, people in such countries feel a huge lack of food and medicine. Therefore, the need of international Aid is undoubted. Foreign aid is an attempt to relieve suffering. Many states do not have the infrastructure for an advanced economy, and aid is a means to assist the state in creating permanent solutions to problems linked to poverty. Aid can also be a good way of forming strong relationships with other countries; curb terrorism and gain political will for global issues and deals but these are in the purest sense of aid not its purpose.

Cons: I don’t know of any country in the world where a bunch of foreigners came and developed the country. I don’t know one: Japan? Korea? No! No country did that. I know about countries that developed on trade and innovation and business. – Herman Chinery-Hesse

The simple answer to this question is No. ”FOR God’s sake, please stop the aid.” This is the cry from Africa. To the argument that the West wants to eliminate hunger and poverty through aid, James Shikwati, a Kenyan, answers: ”Such intentions have been damaging our continent for the past 40 years. If the industrial nations really want to help the Africans, they should finally terminate this awful aid. The countries that have collected the most development aid are also the ones that are in the worst shape. Despite the billions that have poured into Africa, the continent remains poor.” From flawed infrastructure projects to aid given to dictators, there are many examples of failure. Of course, there are also examples of success. But the failures are a reminder: success is not guaranteed.

Many studies of aid effectiveness have been undertaken. Some conclude that aid can have positive effects, if combined with strong pro-development government policies. Many more show a negative impact of aid on economic and social development. Which means the real question is not whether aid does more harm than good. It is: ”How do we ensure aid works?” There are three simple rules of thumb for better aid:

Aid should be given with good intentions. Some of its worst failures have occurred when it was given for geostrategic reasons, or given in ways designed to benefit businesses in wealthy countries. Different things work in different places. Just like Tolstoy’s unhappy families, no two poor countries are alike. Aid needs to follow context, not formula. Learning is important. Agencies need to devote resources to research and to learning from experience. Encouragingly, many donors are improving in these and other important areas. Yet others lag and there is still much to be done.