Here are the advantages and disadvantages of foreign aid to developing countries, and if such a practice should continue. African development experts and academics have blamed foreign aid for the continued and seemingly intractable development crisis confronting the continent. Donor countries use this foreign aid for furthering their economic and political interests. To begin with, humanitarian support is vital for africa and some other continents. What are the advantages and disadvantages of globalization. The nigerian foreign policy gives room for amicable settlement of misunderstandings with other countries. The debate on how aid can be effective and contribute to africas development is, however, still ongoing without any clear way forward. Currently, a lot of third world countries receive aids from the more developed ones. Foreign aid is basically any aid or help given to a country by another country. It is claimed that even under most favourable circumstances, foreign aid can only contribute a small proportion of the investment needs of a developing country.
Comparing with the most region countries, albania has received foreign aid per capita in growth table 1. This trade diversifies the products and services that domestic customers can receive. Foreign aid challenges normally do not surface and divert popular attention, unless there is a practical application of the concept of foreign aid in the economic and social spheres. Though, the common perception among the people is that the subsaharan africa receives fairly large amount of foreign aid, but there is no proper. In the year 2000 developed counties agreed to give 0. Development programme classified 79% of ssa as low human development countries. Foreign aid challenges refer to a handful of disadvantages of foreign aid. It is described by oecd as the financial, technical assistance and commodity. Beynon, r, 1999 the ideal that foreign aid may createfor exporting is dented becausewhen a developing country gets millions of foreign money, thereis upward pressureon theexchangerate, this. Moreover foreign aid has brought development in some african states especially when we are to consider health aid administered through the world health organization who in fighting against diseases on the african continent for instance the world health organization has been appraised so much for providing free antiretroviral treatment tablets in botswana which has subsequently led to the. It offers the potential for development and expansion, but without the risks of internal research and development. This sadev report is part of the wider project theme.
In the last decade much has been written on different aspect of aid. Be that as it may, the nigerian foreign policy also has its loop holes and demerits. Population growth rate of developing countries especially in africa continue to grow in leaps and. The advantages and disadvantages of foreign aid take a look at the reality of. Foreign aid, economic growth and efficiency development. Pdf foreign aid definition, source, arguments of foreign aid. Advantages and disadvantages of foreign aid to developing countries essay sample. Advantages from the african country perspective, well, they get free stuff just because, thats about it. Foreign trade implies the buying and selling of goods and services among different countries across the world. The literature on foreign aid to africa, especially among intellectuals, is most often. Usaid foreign aid differs from official development assistance, for example by including military assistance and excluding donor administrative costs. Foreign aid has widely spread in most of world countries with subsaharan countries seen to heavily depend on foreign aid.
The role of foreign aid in the growth process of developing countries has been a topic of intense debate. To augment past crosscountry studies, this paper offers a first step toward addressing the absence. Aid can support countries in developing their natural resources and power supplies. It may be a condition of the investment that the projects are run by foreign. The aid can be in the form of money, food, services, etc.
This article will list down the pros and cons caused by foreign aid in africa. Assessing the role of foreign aid, donors and recipients. Foreign aid, which is given by wealthy nations, is meant for offering financial and development assistance to developing nations. Africa which could lead to an increase of tourists to south africa and the creation of new business opportunities.
Although foreign aid would save a lot of lives and it would take a lot of poor people out of poverty. Advantages and disadvantages of foreign assistance in albania. And today, the national budgets of most subsaharan african countries are dependent on foreign aid for up to eighty percent of the annual budgets. Foreign aid allows developing countries to have access to food, water. Lastly, according to world bank 1998, out of the 41 countries in the world classified as. Although the initial intention of foreign aid is to help, we should know that it does have its drawbacks. Economic depression in one country can trigger adverse reaction across the.
Economic development can be describe as the development of economic wealth of countries or regions for the wellbeing of their inhabitants such as the improvement and innovation on the political, economic, and social of its people. Here are the advantages and disadvantages of foreign aid to developing countries. What are the advantages and disadvantages of foreign aid. Foreign aid to developing countries has been an important source of finance to. Foreign trade is also known as international trade. Foreign aid is sometimes given to a country or recipient to benefit. In reality, about 1% of the budget is directly associated with this practice.
Oecddac for the period 20002005, the database of donors dsdc for 2006 2010. Many countries situated in africa do receive substantial amount of foreign aids from other countries, international organisations and private philanthropists. Advantages and disadvantages of aid aid gcse geography. The disadvantages of foreign aid to development give a man a fish, and you feed him for a day.
Total foreign aid, loan and grants in 20002010 milion source. Trade could also benefit through the availability of new airfreight links. Through the indiscriminate exchange of 5 th freedom traffic rights, african carriers could face direct and. The debate on how aid can be effective and contribute to africas development is, however, still ongoing without any clear way. Giving foreign aid to developing countries means a transfer of wealth occurs. The international environment is in constant change both. What are the pros of foreign aid to developing countries. Apart from the relief aid and economic development, foreign aid assistance was also provided to support reforms and policy adjustment programs. Foorreeiiggnn aaiidd iinn aaffr riic ca a rrool lee.
It is in line with this transfer of resources that foreign aid has positively and negatively impacted the african continent. Foreign aid is when privileged countries lend or give money, food, or other resources to benefit poor countries. Therefore, foreign aid may retard economys development. Governments in the roughly 40 developed countries often provide foreign aid to the developing world as a way to improve resource access and. This situation, lasting for many years, has both, positive and negative aspects. It may consist of export of goods and imports of goods from abroad. Foreign aid is an important topic given its implications for poverty reduction in developing countries. There are many governmental foreign aid agencies that aid third world nationsi. Foreign aid, economic growth and economic development are burning issues. Abstract foreign aid has been an essential tool for the socioeconomic development of developing countries since 1960s. Economic development and growth are totally different in.
Foreign aid normally comes from richer countries to poorer countries. Giving foreign aid to developing or underdeveloped nations has become common among firstworld countries like the united states. Foreign aid can be defined as any action by a government or citizen of one country, which helps to promote economic development in another country kazimbazi and alexander, 2011, p. This isnt really surprising since extending a helping hand to poor areas has many obvious benefits, but many people point out that it can also have several adverse effects. What are the advantages of foreign aid to developing countries such as african countries.
Evidence of ineffective foreign assistance is widespread in africa. International trade allows countries, states, brands, and businesses to buy and sell in foreign markets. The other disadvantage is that it increases the debt. At the onset, foreign aid is there to save lives particularly during calamities and disasters, like in the case of natural disasters. Other people therefore refer to it as one form of neocolonialism. Foreign aid these days is very different from way back when. Foreign aid and the development of african nations free. Doc advantages and disadvantages of development theories. No study of economic aid can get very far unless there is first an attempt to define. Industrial development projects supported by foreign aid create more jobs, improve. Nigeria is able to trade with these other countries very easily too.
It was because of the deteriorating situation in africa, and the need to find a way out of that situation, that a group of development research institutes jointly. Get a 100% unique essay on foreign aid and the development of african nations. The evolution of the role of aid in development has. One purpose of the report is to investigate whether foreign aid improves the efficiency of resource use in a country in the short term. Advantages and disadvantages of foreign aid to developing. Foreign aid and economic development the role and effects of foreign aid in the economic development of developing countries have been and are controversial issues. Advantages and disadvantes of foreign aid to development. Foreign aid, economic growth and efficiency development, and is the first of a series of studies investigating aid effectiveness in a production theory context. The disadvantages of foreign aid is that it can be used certain countries. The advantages and disadvantages of foreign aid take a look at the reality of this transfer of wealth. The effect of foreign aid on economic growth in developing. Africas war on poverty is perceived as amounting to begging and submissiveness, leading to reforms that have made africans poorer. Discuss the advantage and disadvantage of giving international aid to poor countries. Financing for development highlighted the importance of increasing in ternational.
The average american believes 25% of the governments budget goes to foreign aid. In other words, by providing direct benefits to african countries, we, directly. Aid effectiveness will therefore continue to occupy a central position in the debate on development in africa. Regional integration refers to various types of political and economic agreements that form closer ties between sovereign countries. Here are the advantages and disadvantages of foreign aid to. Economic growth and development advantages and disadvantages. Advantages and disadvantages of foreign assistance in albania 127 figure 1. Advantages and disadvantages of foreign aid uk essays. Thus, it is clear that china recognizes the domestic economic importance of foreign aid. There should be no ambiguity in the fact that foreign aid has inherent limitations and one should not. Developed countries can stifle development of undeveloped and underdeveloped countries. Indeed, many developing countries have benefited from foreign aid. This paper will discuss the role of foreign aid in the development of the african countries.