GLOBAL AID

GLOBAL AID

GLOBAL AID AND THE 'NEW DEVELOPMENT MANAGEMENT' ETHOS

Introduction

Broadly speaking, Global aid implies a transfer of resources from different countries, referred to as the donors, for the benefit of another, called the recipients. This transfer can take place directly, through bilateral channels, or indirectly, through multilateral ones. The purpose of aid varies over space and time, ranging from military aid to humanitarian. In more strict definitions, the concept refers exclusively to official development aid, which should be distinguished from humanitarian or relief aid. The former aims at finding long-term solutions that allow recipient societies to meet and generate solutions to their needs, the latter at alleviating human suffering in urgent situations. Flows of resources aiming at generating development are of three types: (1) official development assistance (ODA), (2) foreign direct investment (FDI), and (3) private donations. According to the Organization for Economic Co-operation and Development (OECD), ODA includes grants or loans to developing countries that are (a) undertaken by the official sector, (b) with promotion of economic development and welfare as the main objective, and (c) at concessional financial terms (if a loan, have a grant element of at least 25%). Grants, loans, and credits for military purposes are generally not included, but it was exactly in this field that the history of aid began. Today, the relevance of foreign aid lies in the fact that it is one of the most important means used to assist the developing world in achieving poverty reduction and economic and social advance.

History

In Western history, the origins of global aid can be traced back to when states supported militarily strategic partners, but it is not until the 18th century that global aid became more systematic. The best examples are, perhaps, the use of British aid in its rivalry with France or the subsidies of Prussia to some of its allies. The 19th century witnessed the first steps toward foreign aid as we know it today. In 1812, the U.S. Congress passed the Act for the Relief of the Citizens of Venezuela. In the 1870s, the first discussions on the finances for the colonies took place in Britain, leading gradually to Britain's passage of the Colonial Development Act in 1929, which provided modest government funds to facilitate development in the colonies rather than forcing them to rely on exports of agricultural goods. However, many of the ideas and infrastructure that sustain present global aid were born in the post-war period. The Bretton Woods Conference in 1944, the establishment of the United Nations in 1945, the launching of the Marshall Plan in 1947, the creation of the UN Technical Assistance in 1949, and the Development Assistance Committee (DAC) of the OECD in 1961 mark some of the grounds of modern global aid. The scale of aid grew bigger with the independence of nation-states in the developing world.

Since its start, modern global aid has shifted strategies. The driving forces that lie behind this are to be found in the relationship between international aid and development ...