TO WHAT EXTENT CAN INTERNATIONAL

AID

BE TRULY

EFFECTIVE?

DISCUSS.

Definitions: The term international aid is very broad, encompassing humanitarian aid, and developmental aid. We will be examining the effectiveness of these two forms of aid to the recipient countries in both long-term and short-term situations. Thesis statement: Without doubt, international aid can help affected countries tide over short term crises, and is thus effective in this aspect. Yet, it has to be acknowledged that there are flaws to this policy. In the long run, if structures and legislation to manage and regulate international aid are absent, international aid might prove to be far more ineffective than effective. Yardstick: International aid can only be considered effective if it fulfils three objectives: sustainability of the citizens livelihoods, economic sustainability for recipient countries and no direct negative impacts upon the donor countries. -> in-line with the objectives of providing international aid 1. Humanitarian Aid is much needed and often effective in solving urgent problems

international humanitarian aid is effective in the short-term unforeseen crisis e.g. natural disasters (Japan, Haiti, Pakistan) scarce resources available for the people as the area is devastated by natural disasters and made barren e.g. in the 2004 Asian tsunami, the total damage was estimated at US$15 billion; it received $6.8 billion in aid, which helped to set up temporary shelters and provide the necessities for survival to the affected citizens. Rebuilding of homes and also, the tourism industries e.g. in Phuket inefficient dissemination of these forms of aid to the people

2. BUT Problems with humanitarian aid still surface in terms of

aid for recipient countries which experienced natural disasters is dependent on the promotion of the disaster relief o e.g. in the Pakistan 2010 flood, the average aid a person received was US$10 while in the 2010 Haiti earthquake, one received an average of a few hundred aid provided not suitable to the needs of the recipient country o e.g. Halal, the instructions of equipments/medicine is in English

Aid thus not effective, rendered useless by the country -> wastage of administration and transportation costs 3. Developmental aid is crucial in jumpstarting developing economies and plays an important role in promoting sustainability as well

bigger picture: international aid can be used to jumpstart the economies of developing countries, improving SOL of the people new industries set up & foreign investors enter the local market, creating employment opportunities -> multiplier effect in the economy o Mozambiques fifteen-year record of nearly 8 percent growth impart expertise or knowledge in a certain field to the recipient countries for them to develop in those areas too, increasing productivity and efficiency -> virtuous cycle of growth e.g. tourism industries in S. America flourished due to the promotion of their natural flora and fauna; potential which was uncovered by professionals sent there

4. BUT Domestic allocation of aid received is inefficient/ineffective

and thus does not fulfill real needs

inefficient governance -> foreign aid often falls into the hands of corrupt officials complicated bureaucratic system with officials in many ranks from the city to provincial to village -> aid siphoned off during the transfer of monetary aid -> people on the ground level received a minute portion of the original aid intended for them aid not given directly to the people, but passed to the provincial state government -> ineffective allocation of resources o annual influx of US$50 billion into the African continent -> despots do not use the funds to improve infrastructure e.g. Zambia (in the past 50 years, the povery rates have risen and the growth rates have plummeted) aid money is often misspent, even when handed honestly -> may be used for projects that generate large amounts of jobs and are beneficial to the government in the short term while providing few long-term benefits over-reliance on the recipient countries part -> sense of dependency, no awareness of self-reliance -> detrimental to the future development of the country where no effort is put in to improve the economic framework or the infrastructure

o As African political leaders become increasingly dependent upon foreign aid, they attend more closely to their donors than they do to the needs of African citizens wielding of aid as an important political tool to manipulate the masses to vote for the ruling political party during elections

5. On the part of the donor nations, commitment to rendering aid might be short-lived or propelled by vested interests, upsetting the volatile domestic situation of recipient nations

Flow of aid is not always dependable, both because it is manipulated for political reasons and also because in times of recession in developed countries, the aid budget makes an easy target for reduction in spending -> recipient countries left out in the cold o E.g. Britain is to cut aid worth hundreds of millions of pounds to countries around the world (like S. America and E. Europe) vested interests of the donor countries in providing aid: o Political reasons - national security considerations influence foreign aid decisions e.g. US -> Cold War (1980s), sharp escalation in US aid to Central America and the Caribbean, as aid to Africa declined; concern over Middle East instability has made Israel, Egypt and Jordan the largest recipients of US foreign aid (instability of the provision of aid, unreliable); NATO and the Marshall Plan was also a form of developmental aid, which also included the intent to further US political and economic agendas o Economic reasons Lesser aid is given in the form of outright grants. Interest is being charged albeit at concessionary rates -> vicious cycle where aid is used to repay interests or loans and not put to good use Tied aid (aid must be spent on the exports of the donor countries -> may be a more expensive option) -> not always in the best interests of the recipient countries e.g. IMF and World Bank -> Structural Adjustment Programmes (SAPs) have helped open up economies rapidly in destructive ways, while requiring a prioritization on debt repayment and cut-backs on social welfare (not long-term)

Inter Press Service reported that aid tied with conditions reduces the value of aid to recipient countries by some 25% - 40% e.g. 71.6% of USs bilateral aid commitments were tied to the purchase of goods and services from US (not economically efficient)

Evaluation: There is the risk of international aid being ineffective due to the inefficiency of the governments in the recipient countries and the poor management of aid received. Over-reliance and the need to return these monetary loans saddled with interest are also real problems that developing nations might face. On the part of donor countries, vested interests are also a possible hindrance to the amount and sustainability of aid given. This does not necessarily mean that international aid is not viable. In fact, countries have benefitted the world. Over the last three decades, aid has added around one percentage point to the annual growth rate of the bottom billion and this one percentage point has made the difference between stagnation and severe cumulative decline in terms of dealing with poverty. Based on a viable policy, the effectiveness of international aid can be increased through a number of ways: crucial for local governments to manage the aid given to them wisely and reduce the dependence placed on aid -> implement policies that are suitable to the framework of their own respective countries to ensure sustainable development open and consultative processes: finding out real needs in the countries and gathering feedback provide aid not just in the form of monetary, but also in terms of skills. Eg Brazil, whose $1 billion in aid outstrips that of many traditional donors provides most of its aid in the form of technical expertise and knowledge transfers Conclusion: International aid has witnessed benefits in certain countries and it is undeniably a noble and much needed policy for countries in need. However, it is only an impetus that allows for economic growth and not a long-term solution. In order to sustain it, the government has to step in and introduce policies which would benefit the country socially and economically in the long run.