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September 5, 2016

Does foreign aid help donors more than the recipients?

The very concept of foreign aid is quite interesting to understand. It is to say that the assistance provided by one country to another in the cloak of a humanitarian gesture is becoming less of a reality now. Rather, the needs of a globalised and mechanical setup go beyond a nation being kindly productive. For instance, according to Shah (1998), “In 1970, the world’s rich countries agreed to give 0.7% of their GNI (Gross National Income) as official international development aid, annually” (Pg. 1, Foreign Aid for Development Assistance). This clearly states much more than what it seems.

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Rich countries like US and China can afford to give humungous aid to other nations in order to compensate for any calamity but this effort does align with certain self-centered manoeuvres. Just for instance, assume these stalwarts in a position of a benefactor. In fact, to do so exhibits sheer foolhardiness, especially in a world that constantly functions on the grounds of give-and-take. If the hegemon of the world tries to assist a poor nation in any sort, there is usually a political alignment expected from the other side, obviously not on the face of it but somewhere down indeed.

This can also be explained in the light of post-World War II era when forces like SEATO try their best to coax as many ‘weak’ countries to incline with certain powers and which actually is bearing heavy repercussions on the part of those meek ones even now. Moreover, as Shah (1998) writes, “Aid is often wasted on conditions that the recipient must use overpriced goods and services from donor countries” (Pg. 1, Foreign Aid for Development Assistance).

Therefore, it must be borne in mind that the whole chimera of foreign aid is to be taken with a pinch of salt. However, this does not mean that the idea has completely lost its value but the fact that it should be comprehended in a holistic fashion must remain upheld.

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