3.

- AID, REMITTANCES, NGOs, and DEVELOPMENT

1. Concerns on Foreign Aid.

Foreign aid can refer to any type of assistance that is provided across national borders. The
term is used to refer to government-to-government transfers of funding to developing countries
in numerous policy talks, including this one. Official development assistance is another term for
this type of support.
Indeed, Foreign aid is defined as the international transfer of capital, goods, or services from
one country to another for the benefit of the recipient country or its people. Aid might be
financial, military, or humanitarian in nature (e.g., aid given following natural disasters).

● Types and purposes:

Foreign help can take the form of monetary transfers, commodities (such as food or military
equipment), or technical assistance and training. Grants or concessional credits can be used as
resources (e.g., export credits). Official development assistance (ODA), which is help given to
promote development and eradicate poverty, is the most common sort of foreign aid. Bilateral
grants from one country to another are the principal source of ODA, however some of it is in the
form of loans, and some of it is funneled through international organizations and
nongovernmental groups (NGOs). The International Monetary Fund (IMF), the World Bank, and
the United Nations Children's Fund (UNICEF), for example, have all contributed considerable
sums of assistance to countries and non-governmental organizations (NGOs) active in
humanitarian efforts.
It is frequently provided by countries in order to improve their own security. As a result,
economic aid can be used to keep friendly governments from coming under the control of
unfriendly ones, or as a form of payment for the right to build or utilize military bases on foreign
soil. Foreign aid can also be used to help a country achieve diplomatic goals, such as gaining
diplomatic recognition, gaining support for its viewpoints in international bodies, or increasing
access to foreign officials for its diplomats. Other goals of foreign aid include encouraging a
country's exports (for example, through programs that oblige the recipient country to buy
agricultural or manufactured items from the donor country) and propagating its language,
culture, or religion. Countries also give aid to alleviate suffering caused by natural or man-made
disasters like famine, disease, and war, to promote economic development, to assist in the
establishment or strengthening of political institutions, and to address a variety of transnational
issues like disease, terrorism, and other crimes, as well as environmental destruction.
It's difficult to single out one of these goals as the most significant because most foreign aid
programs are structured to satisfy multiple of them at once.

● The amount of foreign aid and its track record:

Over the previous fifty years, official sources of foreign development aid have totaled around
$2.3 trillion. Around $1 trillion of it has gone to Africa; Western countries now send about $50
billion to the region each year. Despite this large investment, there is no indication that foreign
aid has boosted economic growth. From 1950 to 2001, Botswana's per capita income climbed
thirteenfold, but many other countries in the region had stagnant or negative economic growth.
To explain this disparity, there is no change in the amount of aid. Botswana's success, on the
other hand, is more likely owing to its relatively solid rule of law.
Aid is not a strong predictor of economic success, according to a 2008 research for the National
Bureau of Economic Research. "Little substantial evidence of a positive (or negative)
relationship between assistance inflows into a nation and economic growth," the report said.
In this regard, the distinction between East Asia and Sub-Saharan Africa is significant. Since
1970, countries like China and South Korea have risen significantly, whereas most African
economies have remained stagnant. African countries, on the other hand, have received
significantly more assistance than China or South Korea.

● Criticism:
Both the donors and the recipients of foreign help have received harsh criticism. Some
organizations in recipient countries have viewed foreign aid with suspicion, seeing it as nothing
more than a tool for donor countries to exert influence. Critics of the IMF, for example, claim that
the required structural modifications are too politically tough and stringent, and that the debts
created as a result of IMF loans contribute to poverty by diverting resources that could have
been invested into debt service. The World Bank, which was criticized in the 1970s and 1980s
for being indifferent to local needs and often approving projects that did more harm than good,
changed many of its rules and has seen less criticism in recent years.
In general, critics of foreign aid programs claim that the programs have been dominated by
corporate interests, that they have burdened developing nations with excessive debt, and that
they have caused countries to avoid implementing tactics that would defend their economy from
the open market. Furthermore, many critics of US aid point to the continued importance of
political considerations over developmental ones, citing the increase in aid to countries allied
with the US in the fight against terrorism after the September 11 attacks in 2001, regardless of
their commitment to democracy and human rights.
Foreign aid has become a highly regarded contentious—topic thanks to celebrities, national
officials, and religious figures all across the world. Proponents say that rich countries have a
moral obligation to help developing countries and that aid budgets should be increased, while
critics contend that such aid is at best ineffective. Most commentators hold viewpoints that
range from unequivocal approbation to outright condemnation, implying that foreign help can be
effective under the appropriate conditions but is laden with challenges

References:
https://www.britannica.com/topic/foreign-aid#ref256254

2. Remittances. Explain the concept and its impact on Tunisian economy.

● introduction:
Remittances have been around for quite some time. Although remittances have become
a huge phenomena in international financial transmission in recent years. Various projects in
developing nations are increasingly relying on remittances for funding. Indeed, I would like to
define remittances in my own words as money sent from people who work and reside in
developed countries to family members or beneficiaries in their home countries or birth
countries.
In several developing countries, remittances are one of the most important drivers of growth.
Indeed, remittances are a major source of funding for many countries' balance of payments
deficits, as well as for investment and consumption. Despite the fact that remittances have a
favorable impact on the balance of payments, poverty, and consumption, their impact on growth
is less obvious. Some studies show a link between remittances and economic growth.
● The impact on the tunisian economy:
Tunisia's structural trade deficit was largely offset by services and secondary income surpluses
derived from tourism receipts and remittances from Tunisians working abroad until the 2010-11
revolution, which helped to restrict the usage of foreign reserves to satisfy external financing
needs. However, since the revolution, tourism has been hit by a succession of setbacks,
causing revenue to plummet. Remittances, on the other hand, have shown to be far more
durable, rising sharply over the last two years, even during the coronavirus-induced worldwide
slowdown in 2020. Remittances are anticipated to become an even more important portion of
Tunisia's foreign accounts in 202226, with educated young people increasingly opting for work
prospects overseas and the tourism industry experiencing medium-term pandemic-related
damage.
In fact, due to the political instability and business environment issues are weighing down
FDI inflows and the workers' remittances have risen in response to covid-19; remittances
peaked at $2.1 billion in 2010, but fell to $1.9 billion in 2018. Since then, they've recovered,
expanding by 13% during the recession of 2020, and we project that by 2021, they'll have
climbed by another 25% to over US$2.8 billion, more than doubling the value of tourism receipts
and FDI combined and accounting for 6.6 percent of GDP. Tunisian expatriates are responding
to the needs of their family in Tunisia, which has been affected hard by the economic downturn
brought on by covid19.
Falling living standards, fueled in part by increased unemployment, are among the push factors.
The unemployment rate among young people and graduates, which was 18.4% in the third
quarter of 2021 compared to 13 percent in 2010, has risen to over 30%. Furthermore, poor
working conditions in Tunisia's large gray economy (which employs 1.5 million Tunisians, or
40% of the total workforce), as well as the difficulty of starting new businesses in Tunisia due to
red tape, limited access to bank credit, and the economy's dominance by established networks
linked to the political elite, are all major factors. However, when opposition to the president's
power grab grows and this opposition causes authoritarian crackdowns, the influence of these
drivers is likely to be worsened by increased social instability.
As a result, in the foreseeable future, remittances will continue to be critical for Tunisia's foreign
reserves, debt-servicing capability, and current-account balance.

References:
http://country.eiu.com/article.aspx?Country=Tunisia&articleid=561635639
3. Role of NGOs in Development:
A non-governmental organization (NGO) is a group of people who donate their time to help the
society achieve a greater aim in the public interest. It is a non-profit venture that is not under the
authority of any governmental agency and aims to improve the wellbeing of citizens. Individual
needs are assessed by NGOs, who operate as a middleman between society and the
government. They are respected on a global scale because they seek aid not only in the
financial sector, but also in a wide range of economic, social, and political structures.
The following six roles, at the risk of generalization, can be regarded as important among
the many that NGOs play:
1. Development and Operation of Infrastructure:
Community-based groups and cooperatives can buy, subdivide, and develop land, build houses,
and run and maintain infrastructure like wells and public toilets, as well as solid waste collection
services. They can also establish building materials supply centers and other community-based
businesses. They will frequently require technical assistance or guidance from government
agencies or higher-level non-governmental organizations.
2. Supporting Innovation, Demonstration and Pilot Projects:
NGO have the advantage of selecting particular places for innovative projects and specify in
advance the length of time which they will be supporting the project - overcoming some of the
shortcomings that governments face in this respect. NGOs can also be pilots for larger
government projects by virtue of their ability to act more quickly than the government
bureaucracy.
3. Facilitating Communication:
NGOs utilize interpersonal communication tactics and research the best entrance points for
gaining the trust of the people they want to help. They'd also have a decent notion of whether
the initiatives they take on are feasible. The importance of this position to the government is that
NGOs may transfer information about people's lives, capabilities, attitudes, and cultural traits at
the local level to policy-making levels of government.
NGOs can help people to communicate with the government and the government to
communicate with the people. Upward communication entails telling the government about what
local residents are thinking, doing, and feeling, while downward communication involves
informing residents about what the government is planning and doing. NGOs are also in a
unique position to share knowledge horizontally, forming networks with other groups that
conduct comparable activities.
4. Technical Assistance and Training:
Training institutions and non-governmental organizations (NGOs) can build technical support
and training capability to help both CBOs and governments.
5. Research, Monitoring and Evaluation:
Innovative activities must be meticulously documented and disseminated; efficient participatory
monitoring would allow outcomes to be shared with both participants and project staff.
6. Advocacy for and with the Poor:
In some circumstances, non-governmental organizations (NGOs) act as spokespeople or
ombudsman for the underprivileged, attempting to influence government policies and programs
on their behalf. This can be accomplished through a variety of methods, including demonstration
and pilot projects, engagement in public forums, the formation of government policy and
strategies, and the dissemination of research findings and impoverished case studies. As a
result, NGOs serve as advocates for the disadvantaged as well as implementers of government
programs; as agitators and critics as well as collaborators and advisors; and as sponsors of
experimental projects as well as mediators.
Despite the fact that non-governmental organizations are an important component of the
modern world's representation and their worldwide participation is a crucial aspect in society's
well-being, they must continue to work toward long-term goals while maintaining openness.

References:
http://www.gdrc.org/ngo/ngo-roles.html