Introduction
The term Foreign Aid is used to denote a process of transferring services,goods or capital from an international donor organization or country for the benefit of the recipient people or nation. Aid can be emergency humanitarian services, economic intervention or military intervention given to developing countries during natural disasters. Assistance can be in the form of a grant or loan. Aid exists in two ways; soft and hard loans. If the repayment of the aid requires a foreign currency, it is a hard loan, and if it can be paid using a local money, it is a soft loan. The general aid taken by countries is the official development assistance (ODA), which is used for development purposes. Third world countries rely on ODA grants for developing their rising economies. This paper seeks to define the term foreign aid, gives examples of foreign aid and finally, it goes further in providing reasons why affluent countries give aid to developing economies.
Why counties give aid
Donor countries give out grants to poor states for Many Purposes. To begin with, their intention is enhancing their security. They provide support to friendly governments to prevent them from associating with their unfriendly countries. Funding also helps the donors to establish their diplomatic goals. By giving out grants, some donor countries also have intentions of developing trade between the two countries. Given that most of the donor countries are industrialized, the states they give donations offer them to market for their industrial products. For example, China has made inroads in the African continent intending to establish trade with African nations (Cheng& Smyth, 2016).
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Secondly, foreign aid is used by donor countries for protecting geostrategic interests, with intentions of preserving and strengthening alliances, building foreign bases and keeping allied powers in the regime. Aid is also used for maintaining friendly ties with foreign countries. It does not only facilitate cooperation but also builds strong alliances by keeping nations as allies. Notably, countries in the world are inclined in the eastern or western states. Major donors such as; the US, China, France, Russia and Germany issue out donations with a vision of securing friendly ties (Brown & Grävingholt, 2016).
Furthermore, countries give out foreign aid because it is an internationally accepted norm. Giving foreign aid has become an expected and accepted standard of behavior from developed countries. Rich countries are assisting developing countries in alleviating the human conditions in those countries. They are giving out donations to developing nations to reduce poverty and service delivery in those nations. For instance, the US has been giving aid to Africa for the purchase of ARV drugs, fighting Malaria and other tropical diseases as well as funding education in the continent (Elayah, 2016).
Foreign aid is also used for complimenting military intervention in war-torn countries. Some countries such as Somalia, Syria, Iraq, Afghanistan, etc., are characterized by political instability (Elayah, 2016). To cite an example of Syria and Somalia, political instability had reached to devastating condition given that the terrorists namely Isis and Alshabaab respectively, had overthrown the governments. The intervention of NATO in Somalia helped in wiping out and the Isis and consequently, restoring political order. Similarly, The AMISSOM contingent in Somalia that consists of forces from various African countries has helped in neutralizing the Alshabaab terrorists.
Affluent countries also give donations for humanitarian purposes to countries hit by disasters such as the earthquake in Nepal in 2015, the Tsunami in Japan in 2011 and the Tsunami in Indonesia in Indonesia in 2018. Refugees in war-torn countries as well as those displaced by floods o catered for. The UN together by other countries comes in to alleviate the welfare of refugees by providing funding or material goods such as clothing, food, medical care and shelter for the victims. For instance, the UN establishes the Dadaab refugee camp in Kenya to house the refugees who had fled from Somalia where fighting had become intense (Hicksite al., 2016).
Easterly (2016), argues that affluent countries grants to developing countries because of malicious reasons; some rich countries use aid for looting the developing economies in the world. Assistance is a reason why developing countries have stagnated in terms of development. For example, sub-Saharan African countries are given over $134bn each year as loans, yet many of them are still poor. They have remained in the vicious circle of poverty given that they spend a fortune in servicing those hefty loans. These donor countries also accumulate a lot of profits from businesses they establish in developing countries.
Conclusion
In conclusion, though foreign donors are spending billions to help developing countries, many of them remain underdeveloped politically and even economically. Much of these funds are looted by corrupt leaders in developing countries leaving little funds for development. On the other hand, many developing countries are not in a position to repay the hefty loans they consolidate in the form of foreign aid. These loans have made these nations to stagnate in terms of development as they spend much of their revenue in repaying the loans. It is therefore necessary for developing countries to establish their economies instead of overflying on foreign aid for funding.
References
Brown, S., & Grävingholt, J. (Eds.). (2016). The securitization of foreign aid. Springer.
Cheng, Z., & Smyth, R. (2016). Why give it away when you need it yourself? Understanding public support for foreign aid in China. The Journal of Development Studies, 52(1), 53-71.
Easterly, W. (2016). The Economics of International Development: Foreign Aid versus Freedom for the World's Poor: Foreign Aid versus Freedom for the World's Poor. London Publishing Partnership.
Elayah, M. (2016). Lack of foreign aid effectiveness in developing countries between a hammer and an anvil. Contemporary Arab Affairs, 9(1), 82-99.
Hicks, D. L., Hicks, J. H., & Maldonado, B. (2016). Women as policymakers and donors: Female legislators and foreign aid. European Journal of Political Economy, 41, 46-60.
