...Period Foreign Aid Is helping other countries really worth the United States’ money? Foreign Aid is the act of giving money, food, or other resources to other countries that are less fortunate. Is it worth it? Many Americans as well as Congressmen argue this while trying to make serious budget cuts. The United States alone spends about $50 Billion a year to 180 countries towards under developed countries, poor countries, or even countries at war that cannot provide their own resources for their people. However, this is less than half of 1% of our total budget making it almost nothing compared to the benefits it provides for the other countries as well as our own. First beginning in World War II, the US used Foreign Aid to help rebuild the economies in Western Europe and help contain the Soviet expansion during the aftermath during the war. Later, in 1945; 188 countries established the International Monetary Fund (IMF) and Bank of Reconstruction and Development for debt relief and economic development. This provided something to fall back on, in case of emergency. Another groups established in 1946 called the United Nations Relief and Rehabilitation Administration or UNRRA was created to provide relief for war-torn countries. Proven successful in 1946, distributed $4.5 Billion of food and supplies to Europe where World War II had destroyed economies. History is proving time and time again how countries and people are benefiting from organizations much like this. Foreign Aid is used...
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...Period Foreign Aid Is helping other countries really worth the United States’ money? Foreign Aid is the act of giving money, food, or other resources to other countries that are less fortunate. Is it worth it? Many Americans as well as Congressmen argue this while trying to make serious budget cuts. The United States alone spends about $50 Billion a year to 180 countries towards under developed countries, poor countries, or even countries at war that cannot provide their own resources for their people. However, this is less than half of 1% of our total budget making it almost nothing compared to the benefits it provides for the other countries as well as our own. First beginning in World War II, the US used Foreign Aid to help rebuild the economies in Western Europe and help contain the Soviet expansion during the aftermath during the war. Later, in 1945; 188 countries established the International Monetary Fund (IMF) and Bank of Reconstruction and Development for debt relief and economic development. This provided something to fall back on, in case of emergency. Another groups established in 1946 called the United Nations Relief and Rehabilitation Administration or UNRRA was created to provide relief for war-torn countries. Proven successful in 1946, distributed $4.5 Billion of food and supplies to Europe where World War II had destroyed economies. History is proving time and time again how countries and people are benefiting from organizations much like this. Foreign Aid is used...
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...cases of foreign aid, which was assisted by the other countries’ foreign aid like the U.S. Owing to foreign aid; South Korea has been able to become a developed country. Recently, South Korea wants to help undeveloped countries which such as Vietnam, Philippine and Myanmar. So, there is constant controversy concerning the foreign aid. Some of critic claims that South Korea gives little foreign aid to other countries. However, they say that South Korea wants to make profit use of foreign aid. Even though many experts support disadvantages of foreign aid, it also has many good ways to help undeveloped countries because it purpose is not profits but relief. Foreign aid can help support to poor countries’ economic system, education system, and medical services and provide food. According to Shah (2004), “Foreign aid, which can be defined as the transfer of money, goods, and services from one country to another, is an important part of the foreign policy” (para.1). The first foreign aid began in the immerse war. In “A Brief History of U. S. Foreign Aid” the author writes that “Foreign aid began in World War II and evolved through reconstruction after that war, through the Cold War, after September 11, and to the present day” (para. 1). Foreign aid has been around since just after the end of the Second World War. Today foreign aid can be given in a number of areas, including developmental, humanitarian, military, disaster relief, and security. Also, some countries can get benefits from...
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...Is Foreign Aid Doing More Harm than Good? Introduction “ Africans…they’re tired. They’re tired of being the subject of everybody’s charity and care. We are grateful, but we know that we can take charge of our own destinies if we have the will to reform them.” – Ngozi Okonjo-Iweala, Finance Minister of Nigeria (How to help Africa…2008). Influenced by the success of the Marshall Plan for Europe, throughout the last several decades “over one trillion dollars of aid money has gone from the Western world to Africa,” (Griffiths 2010) as an attempt to increase quality of life for those living on the continent. However, as seen in the initial quote above, it is implied that aid has both harmed and benefited African society. In this paper, the views of those who oppose foreign aid and those who support foreign aid in Africa will be discussed. Furthermore, the effect of foreign aid on food and migration challenges in Africa will be examined, as these two issues remain unresolved in the continent. The Benefits of Foreign Aid There is no doubt that foreign aid has provided some benefit to Africa. By the intrinsic nature of aid itself, aid has a tremendous impact on the humanitarian imperative (Griffiths 2010). Through the increase in available medical attention, medical technology, sanitation, and access to schooling, aid has provided an additional 30 million children with schooling since 2000, has had millions immunized from various diseases, and has reduced the lives lost to...
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...POOR ECONOMICS: CHAPTER 1- THINK AGAIN, AGAIN 1st Argument: Foreign aid is not the answer to poverty Reason: Foreign aid actually has its own benefits because as what was stated in the book, it would increase the investments of poor countries, thus, make them more productive. If they become more productive, it would result to higher incomes that will generate more investments in the future. Moreover, according to Jeffrey Sachs, poverty could have been eliminated in the near future if rich countries just committed to foreign aid yearly from 2005 to 2025. However, despite of its benefits, it actually does more bad to the economy and people. There will be a tendency that people get to be more dependent on foreign aid. They will stop looking for other solutions to solve their problems thinking that foreign aid will be the only answer whenever problem arises. Moreover, sine more money will be collected from the foreign aid, it could possibly lead to corruption. Another reason that foreign aid is not the answer was that, money from foreign aid actually only contributes a little to poverty. Nonetheless, where the aid is coming from is not important but rather is knowing the right kind of projects where money can be allocated to. Interventions: One of the interventions implemented was prioritizing the needs of the people in order to choose the right kind of project to fund. Such projects are food for the indigent, pension for the elderly and clinics for those who are sick. Also, in...
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...late 1990 Where could growth be most appropriate and most beneficial relationship between foreign aid, economic policy and growth of per capita GDP using a new database on foreign aid that had just been developed by the World Bank. They run a number of regressions in which the dependent variable of growth rates in developing countries depends on initial per capita national income, an index that measures institutional and policy distortions, foreign aid and then aid interacted with policies. We find that aid has a positive impact on growth in developing countries with good fiscal, monetary, and trade policies but has little effect in the presence of poor policies.” I will first discuss expanding their dataset to include more recent evidence and then explore how their results are affected even within the original dataset by different definitions of “aid,” “good policy” and “growth.” Easterly, Levine and Roodman (2003) use the exact same specification as Burnside and Dollar (2000), but simply added more data that had become available since their study was performed, as well as hunting for more data in their original sample period of 1970–1993 construct an index number for what is meant by good policy that includes the budget surplus, the inflation rate and a measure of the openness of an economy developed by Sachs and Warner The standard model used to justify aid is called the “two gap” model. It was developed by Chenery and Strout in the mid-1960s. The first...
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...Introduction: Foreign Aid any capital inflow or other assistance given to a country which would not generally have been provided by natural market forces. In Bangladesh, foreign aid serves to bridge the gap between savings and investments and make up the deficits in the balance of payments. Foreign aid is a major means of financing the country's economic development. Economic literature generally classifies foreign aid into four main types. First, the long-term loans are usually repayable by the recipient country in foreign currency over ten or twenty years. Secondly, the soft loans repayable in local currency or in foreign currency but over a much longer period and with very low interest rates. The softest are the straight grants often given to the less developed countries. Sale of surplus products to a country in return for payment in the country's local currency is the third type and finally, the technical assistance given to the developing countries comprises the fourth type of foreign aid. Foreign aid is more like an investment in a risky market situation. The relative weighting of advantages and disadvantages depends on the planning behind the foreign aid and how well-orchestrated it is. Economic advantages: stimulated economic development in the receiver's country (better infrastructure, more education etc.) leads to economic growth. It can also create jobs as increased investment leads to more employment; this means less needs to be spent on unemployment benefits and more...
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...The integration of developing and least developed countries with the global economy increased sharply in the 1990s with change in their economic policies and lowering of barriers to trade and investment. Foreign direct investment (FDI) is expected to benefit poor countries such as Bangladesh in a number of ways. Firstly, it supplements domestic investment which is low due to lack of resources in these countries. Secondly, FDI is expected to generate employment, transfer, increase domestic competition and bring other positive externalities such as transfer of good practices. Bangladesh offers attractive investment opportunities to foreign investors and has adopted policies to attract FDI into the country. In fact Bangladesh seems to offer one of the most liberal FDI regimes in South Asia. The economic model was developed based on the past behavior of GDP and the external sector. It indicated that FDI is the sector having the most significant impact on GDP and aid the second most significant. While imports negatively affect economic growth, exports have played a very important role over the period. During the 1990s, notable progress was made in economic performance. Along with maintaining economic stabilization with a significantly reduced and declining dependence on foreign aid, the economy appeared to begin a transition from stabilization to growth. In the 1980s, per capita GDP had grown slowly at the rate of about 1.6 per cent per...
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...examines the impact of foreign aid on both economic growth and development in India by using Ordinary Least Square (OLS) test from the period 1975-76 to 2009-10. The study analyzes plan-wise distribution and composition of foreign aid inflows into India. It attempts to explain the effect of some major macroeconomic variables on both economic growth and development in India. The results indicate that foreign aid has been considered as a significant determining factor for both economic growth and development of India. The simple OLS test results show that the impact of foreign aid on both economic growth and development is positive. Finally, the study concludes that the impact of foreign aid on economic growth is higher than its impact on economic development, which indicates that aid contributes to growth but that growth is not translated into meaningful development. This inadequate transformation may be caused due to underutilization of foreign aid, inequality present in the distribution of wealth and income, poor economic policies, poverty and corruption. INTRODUCTION Foreign aid is considered as an important ingredient for financing the developmental programs of the developing countries. Currently, it is considered as an important instrument of the foreign policy of states. It acts as a major source of foreign exchange earnings for developing countries. After World War II, developed economies have been providing hundred billions of dollars in terms of foreign aid to the developing...
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...models developed to determine the impact of each sector-Export, Import, Foreign Aid and Remittance, on GDP of Bangladesh. It also involves an analysis of the behavior of these factors in three SAARC countries and the application of the regression model developed. The economic model was developed based on the past behavior of GDP and the external sector. It indicated that Remittance is the sector having the most significant impact on GDP and aid the second most significant. While imports negatively affect economic growth, exports have played a very important role over the period. The remittance of Bangladesh has been increasing over the last few years. Hence, its impact on GDP has also been rising. In the span of 34 years export as percentage of GDP increased from 2.2% to 15.4%. Hence, performance was moderately good. The economy has been suffering from ever increasing trade deficits, despite several export promotional measures. Large import payments mainly account for this problem. Foreign aid shows large fluctuations over the period Finally, an analysis was conducted on the behavior of the external sectors in the SAARC countries using the regression model. Export was found to be the dominant sector in India, while imports had the minimum impact on GDP. Pakistan was found to be more dependent on export and foreign aid than on remittance and import. Sri Lanka’s economy is highly correlated to remittance, aids and export. 1 Literature Review Several studies in recent years...
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...Foreign Aid In the current situation from 2009-present, international assistance has been expanding its scope but it still has many problems such as corruption, inefficiency in progress or poor management and delay in helping. Last few decade problems with foreign aid are caused not only by incompetence or corruption but also related to itself complex machinery which has been trying to developed aid to transmit from donor to recipient. In addition, there are still poor and waste in aid because the corruption by the recipient government because to aid cannot go to help poor people who really need and want it most (Lappe,Collin,Rosset 1981 9). This essay will examine both of corruption and inefficiencies of assistance and give some suggestion such as they should be a committee of country’s revenue and expenditure, or aid system should be provides transparent and can be verified easily(Demon McNeil 1981 36) followed by evaluation for the best solution to solve a problems As we already knew that, now aids has come from many ways such as food aids, military assistances but the most important aid that is often a serious problem is a financial assistance. Financial aids are usually corrupted by national governments, who have been helped by the donor countries the corruptions always start at the beginning of the aid processes. In addition corruptions are likely to arise in situation where resources are transferred with substantial discretion without accountabilities to the decision...
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...U.S. Foreign Aid in Developing Countries Over the past 40 years, the United States (U.S.), via the coordination of the Agency for International Development (AID), has provided several developing nations with billions of dollars in aid. Assistance is distributed within the following categories: bilateral development, economic assistance supporting U.S. political and security goals, humanitarian, multilateral economic contributions, military, the Millennium Challenge Corporation, and the Global AIDS Initiative. With so many great programs that offer economic and military assistance, my goal is to determine if any metrics have shown a positive impact within developing nations. Why does the United States give foreign aid? Idealists view foreign aid as a contemporary form of Rudyard Kipling’s ‘White Man’s Burden” whose goal was to uplift those worse off than ourselves out of poverty. The White Man’s Burden by Rudyard Kipling “…Take up the White Man's burden-- The savage wars of peace-- Fill full the mouth of Famine, And bid the sickness cease; And when your goal is nearest (The end for others sought) Watch sloth and heathen folly Bring all your hope to naught.….” While Kipling may have been optimistic, reality shows that foreign aid is a necessity. Foreign aid goals include 1) security by fighting terrorism in the United States and abroad, (2) a financial gain by promoting exports, and (3) humanitarianism. Metrics have not provided a true depiction of the...
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...GLOBAL ECONOMICS CRITICAL ESSAY Does Globalization Cause Inequity Among Rich and Poor Nations? M. Stephen Lucas March 2007 Lucas 2 Table of Contents Introduction Discussion International Inequality Trade verses Aid Culture Clash Trade Liberalization 5 8 13 18 3 Conclusion 21 Bibliography Appendix 23 26 Lucas 3 Does Globalization Cause Inequity Among Rich and Poor Nations? Introduction Globalization and international trade have been around for millennia. Over the most part of the past century, nations have increased the amount of trade that crosses international borders. As trade agreements are made between countries, one nation’s resources become available to another nation’s citizens. The resources in each country are limited and scarce. The differences and availability of the proportions of each nation’s input factors of production is the catalyst for trade (Pugel, 2004). These factors include land, labor, capital, and enterprise. Land is the real estate that is comprised within the country’s border. It contains the natural resources that are limited in nature, such as oil, gold, silver, coal, etc. It also includes resources that can be grown on the land such as timber and agricultural products, which are limited by the size of the land that is available to grow such products and technology. Labor includes the skill sets of a nation’s people and is limited by the population size. Labor can be divided in to skilled and unskilled. In some countries...
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...The Effects of War and Peace on Foreign Aid Leon Moore Dr. Bernard Curry Soc 300 7/22/2015 Foreign aid encompasses the technical, military; humanitarian along with financial assistance is given to the developed nations for helping to foster economic, political as well as social progression within the developing countries. Foreign aid outcomes in the positive along with negative consequences for developing countries and has been the subject of decisions made by the government officials regarding their distribution. Discussed in this paper has been the effect of peace along with war on the foreign aid distribution, particular actions undertaken by government officials for relieving the issues out coming from the warfare as well as role of the foreign aid in the poverty and also warfare reduction within India. India has not been immune to intrastate along with interstate the warfare. Partnership within the India, as well as Pakistan, has commonly been rough showcased via many breakouts of war. Not until the 2nd domestic war of the year 1965, which worldwide States stepped in for providing the foreign aid for advancing its self-seeking programs. The US failed for offering any international help to the India like this had not remained in their benefit (Sahoo & Sethi, 2013). At the time, Nehru, the firm advocate for the socialist-led Indian government. He has supported for nationalization concerning the framework together with the business that threatened the privatization...
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...products would be cheaper and the taxes paid would eliminate because there would no longer be any subsidies to pay for. On the other had this would be a negative for the average farmers in these nations. There would no longer be a surplus of goods that could be sold to monopolize the market. Farmers would no longer benefit from the subsidies they received all profits would be based on production. Lower commodity prices in developing nations would cause farmers to lose revenue because in order to make a profit they would have to raise prices causing them to not be competitive within their market. QUESTION 2 WHICH DO YOU THINK WOULD HELP THE CITIZENS OF THE WORLD’S POOREST NATIONS MORE, INCREASING FOREIGN AID OR REMOVING ALL AGRICULTURAL TARIFFS AND SUBSIDES? Foreign aid comes with strings attached and it does not come without a cost. Foreign aid only seems to balance out the “goodwill” of developed countries. As stated in the case the foreign aid that these developing nations receive from developed countries is less than what they are losing if allowed to sell the commodities that the posses in their countries. Clearly these developing countries would benefit from removing all agricultural tariffs and subsides. QUESTION 3 WHY DO YOU THINK GOVERNMENTS IN DEVELOPED NATIONS CONTINUE TO LAVISH EXTENSIVE SUPPORT ON AGRICULTURAL PRODUCERS, EVEN THOUGH THOSE PRODUCERS CONSTITUTE A VERY SMALL SEGMENT OF THE POPULATION? The political well being of politicians...
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