FOREIGN AID IN KENYA

Foreign aid in Kenya

Foreign Aid in Kenya

Background of the Foreign Aid

Foreign aid can alleviate the painful process of transition when the country is suffering from the serious economic issues. But free enterprise can not be developed until the foreign aid is used in an efficient manner. Foreign aid can come through various channels, i.e. from the international donor agencies, from neighbouring countries or from the NGOs. Foreign aid should not go solely by national governments. There are strong arguments in favour of working with local governments and NGOs (Bloom, 2001, 207).

Democratic governments should not oppose the distribution of aid through NGOs. They should welcome such an opportunity. Those governments that cannot be trusted for utilizing foreign aid oppose the use of non-governmental channels. Although foreign aid has contributed to addressing problems associated with food shortages for the African population. Many experts believe that in the long term, these problems cannot continue to carry out the same way. Indeed, experience shows that food aid may be withdrawn only temporary difficulties. But such measures would undermine the long-term plans to create conditions for complete food self-sufficiency in Africa. It is believed that foreign food aid only eliminates the symptoms of disease rather than its cause (Asiedu, 2002, 107).

The concept of foreign aid is ineffective and often unproductive. However, some developing countries have made an efficient use of the foreign aid. It is claimed that help is needed for reform. The foreign assistance that is provided by the western countries is associated with the promotion or even the completion of reforms. Similarly, the rapid growth of inflation in some countries, raised serious doubts among potential providers of assistance, but the absence of foreign aid, forced many countries to finance deficits by printing money, further raising the inflation. The foreign aid is greatly influenced by political and military situations and not the economic considerations. As a result, less developed countries do not receive assistance in accordance with their needs or level of poverty. Only 4 foreign aids go to those 10 countries, where 70% of the population is poor (Asiedu, 2002, 107).

Firstly, foreign aid too often serves the interests of donors rather than recipients. Providing assistance is often determined by national security interests arising from the geopolitical aspirations, without poverty and the nature of the recipient state. Aid to Africa during the Cold War is the clearest example of this (Blair, 2000, 21).

Nevertheless, foreign aid still has a positive effect in countries that have economies in transition. Among other things, the foreign aid helps to maintain vital functions of central banks, financial markets and the judicial system. Lots of examples suggest that foreign aid can be very useful, despite its shortcomings. Dependence on foreign aid is regarded as a sign of non-free economy, and resistance to reform that reflects the inability of states to self-development.

Some developing countries have experienced significant increases in its heavy industry by making efficient use of foreign ...