Foreign Aid: Anything but Simple!

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ACKNOWLEDGEMENT

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I [type your full name here], declare that the following dissertation and its entire content has been an individual, unaided effort and have not been submitted or published before. Furthermore, it reflects my opinion and take on the topic and is does not represent the opinion of the University.

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Abstract

Foreign aid idea is dated back to human history. Today foreign aid infrastructure is developed after world war-II to help the western European countries' infrastructure. Foreign aid is unmitigated failure in many countries of the Latin America, Africa and Asia. The effectiveness of the foreign aid depends upon its utilization. In developing countries, it is interesting to note that there is little development in the region. Inflation, employment level and per capita income decreased. Foreign aids used for non productive projects such as to build modern cities etc. The foreign aid has played a vital role in third world countries. Foreign aid improves infrastructure, poverty alleviation and fill the budgetary gap and bring rapid development in some countries such as Indonesia, Korea, Bolivia and Ghana. Pakistan, like other developing countries, has been facing a crisis since its birth. It needs aid to overcome the troubles in the form of grants, tied aid, project aid. The foreign exchange reserve would be at a safe level by huge inflow of fund. In the beginning, Pakistan has received a small amount of aid from the world, IMF, World Bank and Asian Development Bank. Late 50s economic activity and five year plans increased dependency on foreign aid. Volume of foreign aid increased with the introduction of every five year plan. Pakistan has received a huge amount of foreign aid as a strategic partner of western countries against USSR. After the end of Afghan war and fall of USSR, scenario has changed and declining trend in foreign aid observed. Conditions on foreign aid transfer from soft to hard as a socialist country priority has changed. The period of 1990 to 2000 prove hard for Pakistan. In 90's American congress pass Pressler law to stop the Pakistan Fuji aid and impose unsympathetic conditions on social development aid. The western countries and America tightened the condition hard after the 28th May 1998 Atomic Explosion and Pakistani foreign reserve fall to danger level. After 9/11, scenario has been changing dramatically and the aid donor country imposed hard conditions on recipient country. American has a long list of demands; despite Pakistan is a strategic partner in this war, against the fund transfer. Recently the foreign aid connected to the war on terror and properly monitored. As Pakistan is high indebted country and seeks for soft loan / Foreign Aid, the World Bank imposed hard conditions on Pakistan regarding taxes. In short Pakistan has seen the rise and fall in foreign ...