How Donor Countries Benefit from Giving Aid

Abstract

There are mixed reactions towards foreign aid. Some people say that it is something good while others are against it. The reason is that many people think that the donor parties are the ones who benefit the most by giving aid and, on the other hand, recipient countries make less effort to develop because they know that they will receive aid during difficult times.

There is a school of thought that giving aid to West African countries has damaged their economy in the benefit of the donors. It is true up to some extent that donor companies benefit more from aid compared to recipient countries. But the major issue is that the aid is actually channeled into the donor country.

Table of Contents

Abstractii

Introduction1

Discussion2

Aid in West Africa2

Tied Aid3

Increase in Costs3

Benefits to Donor Countries4

Benefits to Donor Companies5

Conclusion5

References7

How Donor Countries Benefit from Giving Aid

Introduction

International aid is a transfer of resources voluntarily from the government of one country to another so that the recipient country may benefit. There may be several other reason of giving aid mostly in order to develop relations between the countries. Aid may be given by governments, private organizations, or individuals.

The oldest form of aid recorded in history was military assistance to help other militaries that were strategically important. Modern aid began in the eighteenth century when Prussia helped its allies by providing them subsidies. European powers received a lot of aid to their colonies in the nineteenth and twentieth century in order to help them grow and for them to improve their infrastructure (www.britannica.com).

The most common forms of aid are humanitarian aid, development aid, and food aid. Humanitarian aid is given during natural calamities, emergencies, or wars. Development aid on the other hand, is given by parties in order to stimulate economic development. The most common form of development aid is the setting up of industries in recipient countries. The third type of aid is food aid. This aid is very common on West Africa where people are starving because of drought. Food aid is a short term measure compared to the other two types which are medium to long term.

There are increased calls for increasing the aid support to African countries. Organizations are demanding developed countries to double the aid to Africa which is currently around $50 billion. Although many people will assume that this may seem to be a good call but in fact, foreign aid has made the poor poorer. The reason is that these countries rely heavily on aid and they don't invest the received amount in a proper manner (Moyo, 2009).

Discussion

As Africa started to develop, a slump in its economic growth between 1975 and 1980 shattered all hopes of growth. Since they were unable to recover from this issue, they started to depend heavily on international debt. Despite receiving a lot of aid, poverty in West Africa is still on the rise.

The general perception of people all over the world is that aid reduced the poverty in the recipient ...