Foreign aid means the economic, technical, or military aid given by one nation to the another for purpose of relief and rehabilitation, for economic stabilization, or for mutual defense of the nation. Some experts charges that aid has enlarged government bureaucracies, perpetuated bad government, enriched the elite in poor countries, or just been wasted. Other argues that although aid has sometimes failed, as they have supported poverty reduction and growth in some countries and prevented worse performance in other.
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'Importance of Foreign Aid in Developing Nations'
- Infrastructure: to build roads, bridges, institutions and sewer systems get built, giving people the ability to be mobile and have access to basic necessities such as electricity and running water.
- Agricultural technology improvements: to improvements enter the infrastructure within the agricultural businesses within recipient countries.
- Education: to built classrooms, teachers receive training and children gain basic educational needs.
- Health: to develop health facilities like vaccinations, mosquito nets, safe drinking water, access to hygiene education and basic sanitation facilities.
- Humanitarian issues and natural disaster emergencies: life-saving support comes to those affected and possibly displaced due to natural disasters, emergency shelters are built for people affected by violence, and counseling services are made available.
- National security: the recipient countries can combat terrorism with the help of foreign aid as it decreases poverty, weak institutions and corruption which can help strengthen good governance, transparency and the economy.
- Another reason why foreign aid is important is that how it fosters a conducive diplomatic relationship between the donor and the recipient.
- Impoverished the nations receiving aid can eventually become independent and move towards democratic fundamentals with the help of donor countries. There are hundreds of different donors of foreign aid among them One of the most well-known donors of foreign aid comes in the form of Official Development Assistance (ODA). The ODA provides foreign aid to poor countries in the form of grants and loans.
- One of the most well-known and the largest providers of foreign aid is the International Development Association (IDA), which is the part of the World Bank and It has 173 shareholders which provide grants and loans to 77 countries around the world, out of which 39 are located in Africa.
- The main goal of the IDA is to reduce the inequalities, increase in economic growth and to improve the living conditions of the people. The funds are given directly to the sectors of education, water, sanitation, agriculture and infrastructure.
- The IDA provides little or no interest on its grants and loans and it allows for a grace period of up to 10 years and also it allows the recipient country to make debt payments of up to 40 years.
- Since 1960, the IDA has provided $312 billion in investments in 112 impoverished nations. In the last three years alone, there has been an average of $19 billion in grants and loans.
- Foreign aid truly makes a difference to people living in poverty. It provides access to basic necessities and provides people essential conditions for living a peaceful and secure life.
