The terms ‘humanitarian aid’, ‘foreign aid’, and ‘development aid’ are used a lot without any specific consensus on their actual meaning. Therefore, it was no surprise when a recent poll of Britons reported a desire to drastically reduce foreign aid in the wake of the Brexit referendum in June 2016.
Foreign aid is any money, equipment, or training given by either a country or a multilateral organization (such as the European Union) to another country. Although military aid is rarely classified as foreign aid today, the origins of development aid began more than a century ago when European powers would provide their colonies with military equipment, supplies, and training.
Further complicating this issue is that each donor tends to have a different definition of development aid or perception of advantages of foreign aid. Reading reports from the US government, you will mostly see the term ‘foreign aid’ while the British government, led by the Department for International Development (DfID), usually refers to it as ODA – Official Development Assistance.
While this article will not go into detail about the exact definition of foreign aid or debates on foreign aid pros and cons, the term will refer to money, equipment, and services given by one ‘developed’ (formerly First World) country/organization (donor) to a ‘developing’ (formerly Third World) country.
Pros of Foreign Aid
1. Benefits of aid – helps Meet Sustainable Development Goal (SDG) Targets
In the year 2000, the United Nations developed a 15-year plan aimed at tackling extreme poverty across the world, thus highlight the benefits of foreign aid to developing countries. The targets outlined in the plan were named the Millennium Development Goals (MDGs). While much laudable progress has been made by some countries towards these MDG goals, other countries have fallen short. The new SDGs have replaced the MDGs as part of a new 15-year plan (2015–2030). Much of the foreign aid given to countries today is aimed at achieving these SDGs. Much of the foreign aid given to countries today is aimed at achieving these SDGs. You can read more about the SDGs here.
2. Trade for Aid
There is currently much talk in British circles about leveraging the UK’s multi-billion-pound ODA budget into securing business contracts post Brexit. Some people think of this as ‘trade for aid’ but the official definition is development aid given to countries to help their economies. For instance, a country might have an abundance of a natural resource but require investment in its ports to enable them to bring that resource to market. Helping to modernise or build a rail link or seaport network could thus be one example of ‘trade for aid’.
3. Increasing Independence
By helping to develop a strong network of basic education, better infrastructure, and a physically healthier population concomitant with a thriving economy and improved access to global markets, the belief is that development aid can help countries become more independent.
4. It’s Humanitarian
Developed countries are all democracies, and it is thus no surprise that most citizens of those countries want their governments to do something about endemic poverty, disease, illiteracy, gender gaps in education and work opportunities, climate control, and other sectors in countries ‘over there’. When people see pictures on television of refugees, malnourished children and the devastation caused by climate change, it is natural for them to want their government to organise and deliver foreign aid in order to help.
5. Eradicate Disease
Communicable diseases like polio, cholera, malaria, and measles may represent only minor inconveniences in the developed world, but these illnesses continue to affect millions of people around the world. Beyond the immediate humanitarian benefit of saving lives and preventing lifelong crippling injuries, controlling and eradicating diseases helps prevent their spread around the world, something that is frightfully easy.
Other diseases being combatted by foreign aid include Ebola, a highly lethal and contagious disease that was fortunately brought under control in 2014 due in large part to huge investments of foreign aid by the British government. The same agency (DfID) that many Britons now wish to see de-funded carried out outstanding work in preventing Ebola from ever reaching the British Isles.
Cons of Foreign Aid
1. Disadvantages of Foreign aid to developing countries – neglecting domestic needs
Many people feel that large sums of money should not be given to foreign countries until major problems such as homelessness, poverty, and inadequate health care are addressed at home.
2. Foreign aid is wasted
It is true that some portions of foreign aid do get lost if siphoned off by corrupt local officials, but this has become less of an issue in recent years as all major donors have developed ways of working directly with the intended recipients of aid. Nonetheless, it remains true that some foreign aid is either misdirected, lost, or wasted due to a combination of incompetence and corruption on the part of local officials.
Of far more concern to foreign aid, watchdogs is what is known as ‘duplication of effort’, such as when two different donor agencies show up in a village to build a well while neglecting another village in the region that could also benefit from a clean source of drinking water.
3. Foreign aid is just colonialism in disguise
Many foreign aid watchdogs believe that some of the biggest donors (like the UK) overly concentrate their foreign aid on their former colonies (such as Sierra Leone) to perpetrate old relationships. Also known as ‘soft power’ projections, it is easy to see how a donor country could give foreign aid with one hand and then ask for military or business favors with the other.
4. Giving foreign aid makes countries dependent instead of independent
Multilateral organizations closely manage ODA per capita (the amount of foreign aid per person) in a country in order to monitor how dependent a given country is on the receipt of foreign aid ‘handouts’. Nonetheless, many countries around the world are heavily dependent on money coming from outside their borders (including remittances).
5. Foreign aid promotes favoritism
No donor country or organization offers help to every country; some countries therefore get help at the expense of others. This kind of favoritism means that some countries do not get the aid they need while others get more, and there is little that the recipient nation can do to change things.