FOREIGN AID

This refers to assistance / help given to developing countries by developed counties to encourage
development. Aid can be in different forms such as money, goods, or expertise.

Forms of Aid

1. Gifts / grants: Such as money for emergencies, equipment or textbooks

2. Interest free loans: these are normally given for infrastructural projects e.g. roads, dams,
universities etc.
3. Technical assistance: The donor can send experts such as teachers, doctors, engineers to work in
a developing country for a period of time or the donor gives scholarships to citizens of the
developing country to study abroad or receive training.

Types of Aid
There are two main types of Aid
1. Bilateral Aid: This is given directly by a single country (government) to another and it involves
only two countries i.e. the donor and the recipient.
2. Multilateral Aid: This is Aid that is given indirectly by the developed nations through
international agencies such as UNICEF and the World Bank under the umbrella of the United
Nations.

Types of donors

A donor is a person, organization or country that gives Aid, a country that receives Aid is known as a
recipient. Aid can come from three different kinds of donors:

1. Foreign governments normally send aid directly to the government of a developing country.
2. International agencies / organizations e.g. the world bank, WHO, FAO etc. some of this aid can
be given to governments and some NGO’s
3. Charity organizations e.g. Red Cross such aid is offered in small amounts to groups or
individuals in local communities.
Reasons for giving Aid

 To assist in times of emergencies such as floods, famine or disaster; this aid is given generously
without wanting anything in return ( it is for moral and humanitarian reasons.
 Donor governments mostly give Aid in order to benefit something in return ( tied aid i.e. with
strings attached )

Advantages of Aid

 Helps improve or develop infrastructure in developing countries.

 Shows that countries care for fellow countries.
 Helps developing countries fight against poverty, famine and natural disasters such as floods and
drought.
 It encourages International trade

Disadvantages of Aid

 Could bring inappropriate technology to developing countries

 Can make the country dependent on others instead of encouraging self reliance
 May encourage people to expect handouts instead of working
 It may increase inequality if given to the wrong group
 It leads to interference in domestic politics

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 It encourages neo-colonialism