Foreign Aid introduction Foreign aid takes many forms

Foreign Aid

introduction • Foreign aid takes many forms and can be channeled through a wide variety of agencies. • These agencies can be both government sponsored and privately operated. • Its effectiveness will depend to some degree on the nature of the organization distributing it. • Can you brainstorm some examples of foreign aid? ? ? ? To which nations is the aid targeted for? ? ?

Bilateral Aid • One of the most common forms • Aid is sent directly from the donor country to the recipient country. • There is no intermediate agency involved. • Can you list an example of Bilateral aid? ? ?

Tied Aid • Much bilateral aid comes in the form of tied aid. • It is bilateral aid given with certain conditions attached. • Example; The materials given must be purchased in the donor country. If a school in Kenya is being equipped through the Canadian foreign aid program, then the materials for that school would be largely supplied from Canada.

Disadvantages • Materials might be obtained less expensively from other countries • Equipment suitable for the donor country may be inappropriate for the recipient country. • Inefficient because of the great amount of paper work. • Cost of transportation of materials. • Pressure on the recipient nation to conform to a particular policy or political viewpoint.

Advantages • Tied aid is of benefit to the recipient nations • Good deal of technology is transferred • With tied conditions, the donor country make giving aid more acceptable. • Can specifically tailor the aid to the needs of the recipient country.

Multilateral Aid • Involves the transfer of aid from a number of donor countries through an international agency. • Example would be the Red Cross. • Agencies general avoid making political statements. • Avoid entering into conflicts with the governments of the recipient countries, even where there is a clear mismanagement of funds.

Other examples • FAO – the Food and Agricultural Organization of the United Nations. Their role involves agricultural research and the dissemination of the results around the world. • WHO – the World Health Organization of the United Nations. They monitor health problems, solutions and sharing of benefits. One example would be their campaign which eliminated smallpox from the earth.

• The World Bank, founded in 1944, is considered to be the world’s single most powerful force for development. • Located in Washington, D. C. • It receives funds from the wealthier nations and lends to developing countries unable to borrow from regular commercial banks. • Profits are funneled back into projects.

CIDA • CIDA – the Canadian International Development Agency. • Largest government agency in Canada. • Responsible for administering the aid Canada sends to the developing world. • A significant portion of CIDA’s budget is directed toward privately operated NGO’s (non governmental organizations). • Examples of NGO’s; the Red Cross, World Vision, UNICEF, Foster parents Plan.

Structural Adjustment Programs • SAP’s address the “root causes” of poverty. • Promote economic growth, efficient and equitable resource allocation. • Address management of public spending. • Increase the productivity of the poor through health, education and economic opportunities. • Help in opening an economy to external or domestic competition. • Improving infrastructure, social services and financial systems.

• “Help the poor in a particular country become non-poor. ”

assignment • It was announced this morning that the Canadian Government was owed approximately $700 million dollars in foreign debts. This money was to be paid by mainly African nations. • The Canadian Government announced that it would forgive the debts if these nations formed stable democratic governments. Should the government proceed with this plan?