By Jurie Hendrik Human
Foreign aid or foreign assistance is defined as “the international transfer of goods, services or capital from a country or international aid agency to a recipient country or its population”. Regardless of the types of development aid, it goes without saying that it contributes greatly to evolutions in developing countries. Yet, lately, there have been calls for a reset in the process of providing aid, which sound rather grounded when looking at the current reasons of providing aid and at disparities between financial resources transferred to/from developing countries.
Types of development aid
Public foreign aid, largely referred to as Official Development Assistance (ODA), can be bilateral, given by the government or government-run agencies of one country to another, such as USAID, or the Spanish Agency for International Development Cooperation, AECID, etc. ODA can also be multilateral, which is aid provided by one or multiple countries to or through a multilateral agency, such as the UN, the World Bank, the IMF, etc. Alternatively, foreign aid can be private and be provided by NGOs or charity-based organizations, such as the Red Cross or Oxfam.
See also: The main types and the evolution of international aid
One of the best known and largest providers of foreign aid is the International Development Association (IDA), which is part of the World Bank. It has 173 shareholders that provide grants and loans to 77 countries around the world, 39 of which are located in Africa. The main goal of the IDA is to reduce inequalities, increase economic growth and improve the living conditions of those in poverty. These goals are addressed as IDA funds are given directly to the sectors of education, water, sanitation, agriculture, and infrastructure.
USD 149.3 billion is the net amount of official development aid and assistance received, in the world, in 2018, going up to USD 152.8 billion dollars in 2019.
Why does ODA matter?
Aid is clearly just as important today, as it has always been. It may be even more important now, as the world is more interconnected as ever before. If the development community continues its dedication to making aid truly effective, it will be what it was once imagined.
See also: Why is development aid necessary?
It was at the US President Truman’s inauguration when the rationale for aid was laid down: “… We must embark on a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas,” Truman declared. He justified his commitment to development co-operation in this way: “More than half the people of the world are living in conditions approaching misery. … Their poverty is a handicap and threat both to them and to more prosperous areas.”
Aid framework needs a reset
The development community admits that there is a need to redesign the framework of aid, in order to keep the intentions and results in line with each other.
Main concerns with the way aid is performed today lie with the so-called colonialist approach coming from the west. Aid workers report that often the assistance given is not what is really needed on the ground, but rather is a reflection of policies coming from the top. This ties into the motivation behind aid as geographical influence quite often to acquire or retain access to natural resources. This perspective was reflected by former US President Richard Nixon, who once declared that “the main purpose of American aid is not to help other nations but to help ourselves”.
“Foreign aid has not improved the lives and living conditions of the world’s poorest people. The gap between the richest and poorest countries is tremendous and increasing. Aid has not achieved desirable results in war-torn countries. For every dollar of aid rich country give to poor countries, they receive seven to ten dollars back in debt repayment, profit and trade”, says Maliha Chishti, a researcher of war and post-conflict peacebuilding.
According to a report by the UN Conference for Trade and Development, financial resources transferred from developing to developed countries amounted to USD 496 billion in 2017.
See also: Top 10 aid donor countries in 2019
Donors might be slammed for inconsistency and critics might be right to a certain extent. Nevertheless, one should also consider the fact that there is quite a big difference between the issues facing both developing and developed countries in the 1960s and nowadays. Both developed and developing countries have evolved and updated their strategies. Today, authors like Masako Yonekawau urge for a redesign of the aid framework. “Put those in need of help in the center,” says Yonekawa. This sentiment is echoed by Maliha Chishti when she says that the West would do better to let the developing countries lead on their own cultural terms.
The sentiment is there, the importance of aid is undisputable. The question of how remains.
