Notesale: Turn your study into money

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International Aid- Is Aid Good for the Less Developed World?
Further to the notes we have made so far on the disadvantages of aid, here are a number of further arguments
against aid
Other disadvantages of Aid
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A lot of aid is subject to conditionality
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Bilateral aid is often tied so that the money is only given if
the LEDC is spent on goods and services from the donor country
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Apart from the problems of displaced people, the tie imposed
was the purchase of British Hawk fighter trainers
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The OECD estimate that tying aid increases a developing country’s costs by an average of 15%
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Also here and here and note below
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Tied aid is foreign aid that must be spent in the country providing the aid (the donor country) or in a group of
selected countries
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7 percent of aid is untied meaning the majority of aid is in fact given
with certain conditions which will ultimately benefit the aid giver
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The donor country can raise its own exports
which has economic gains as it results in an increased GDP
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Advantages:
It is a strategic use of aid to promote donor country’s business or exports
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Tied aid improves donors export performance, creates business for local companies and
jobs
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It gives companies experience on the global market which they have been unable to have before
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Therefore helping it to
further develop
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An example being the USA
China offers billions of dollars in unconditional aid and cheap loans to African governments
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China have become one of the biggest aid givers to Africa, most of which is tied, Chinese money could do
more harm than good
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Zimbabwe is in negotiations with China over a $2 billion loan to help support its collapsing economy because
of its levels of hyperinflation
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China’s terms are that African countries open up their trade in return for China’s development assistance
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Tied aid can create distortions in the market which means the country can be unable to spend the aid that
has been given to them or they have to spend it on a certain thing
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16% of aid in 2006-07 was debt relief
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The SAPs and the more recent Poverty Reduction Strategy Papers
(PRSPs) are supposed to allow the economies of the developing countries to become more market
oriented
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Those who criticise SAPs see the neoliberal agendas of the West, and particularly the US,
imposed on the LEDCs
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See previous notes

Some of the conditions for structural adjustment can include:
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Cutting expenditures, also known as austerity
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Countries which fail to enact these programmes may be subject to severe fiscal discipline
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This could be
regarded as neocolonialism, and a further enforcement of the dependency relationship, (Andre Gunder Frank)
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African growing dependency on China
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Do they just want to exploit
African resources? Use the following links to judge whether aid to African countries from China is
beneficial to both the donor and the recipients
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chinaafricaproject
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Many governments disagree with this
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Increased investment in these sectors could result in a rise in income and increased GDP
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Sudan sells around 2/3 of
its oil to Beijing
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Many Chinese firms employ large numbers of local workers but wages still remain low
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Chinese companies are taking advantage of low labour costs, and building factories across Africa
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Humanitarian aid, (5% of aid given) can increase dependency relationships and can hinder development in the
long term
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James Shikwati a Kenyan economist, has argued that foreign aid causes harm to the recipient nations,
specifically because aid is distributed by local politicians, finances the creation of corrupt government such as that
led by Dr Fredrick Chiluba in Zambia bureaucracies, and hollows out the local economy
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Portions of the corn may be diverted by
corrupt politicians to their own tribes, or sold on the black market at prices that undercut local food producers
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Journalists have exposed the existence of secret government bank accounts which concealed foreign
aid money destined for private purposes
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Listen to the audio clip on the page from 4 min 10 into the video to the end
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Over the last four decades that figure has quadrupled
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40% of national government budget is aid
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She concludes that the developing world might actually be better off if aid workers stayed at home as more aid projects fail
than succeed
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“Densely packed shacks, some made of little more than old tyres…
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Save the children: a small clinic in the village which has saved the lives of numerous children
Oxfam: Planning to install proper toilets and sewage system which will help to prevent the spread of disease
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This means access to health care is extremely
limited
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Unless this improves dramatically,
or donors continue to pay the bills, this free healthcare looks unlikely to last
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The trouble is that, while these enable farmers to grow all they need to
feed the nation, much of the produce rots on the ground because of poor storage facilities and transportation problems- unsustainable aidfarmers cannot afford fuel and don’t know how to maintain the tractors, unsuitable to small holder farming, giving people seeds and teaching
them how to use basic equipment would be more beneficial- top down aid is inappropriate
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However,
people would only come if they were paid; this shows the entrepreneurial culture has been lost and instead it has been taken over by dependency
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People have been given somethings for nothing for so long that they no longer feel the need to work
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Providing large amounts of money to the receiving country creates inflation raising the prices of every day goods making them unaffordable to the
average person
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Only 11- 13% of arable land is being used- if doubled to 27% the country would be able to provide all food themselves becoming more
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A large percentage of aid, (12% in 2006-07), is for unspecified projects
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This aid, often capital intensive projects, too often doesn’t
reach the poorest people, and when it does its benefits are short lived
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One multilateral development project which
received a lot of criticism is the World Bank’s Flood Action Plan for Bangladesh, (see especially slides 4
and 5)

Oxfam:
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For every £1 given to Oxfam, 82p goes directly to emergency, development and campaigning work
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Action Aid:
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They don’t impose solutions, but work with communities over many years to strengthen their own efforts to reduce poverty and
work for better lives for them and their families
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Focuses on what are the causes of poverty
2014 statistics, where the money goes: Charitable activities 88
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9m Raising funds 11
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2m
Governance 0
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2m
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Action aid has a zero tolerance policy for any potential instance of fraud or corruption- instances will be investigated quickly and
immediate action will take place
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Improve the quality of public education for all children and support young people to become drivers of change towards a povertyfree planet
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Ensure that women and girls start to gain equal rights and stop being controlled by their culture
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Its aim was to reduce the impact of the floods that occurred
annually in Bangladesh
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It was intended to construct coastal
embankments to protect from storm surges brought by cyclones but these have yet to be completed
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Economically desirable for urban areas, it was not suitable for rural areas which are dependent on fishing and farming so these
areas will still be affected making them vulnerable
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The logistics in which aid delivery occurs can be
problematic
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Although aid was flown in rapidly, regional belief systems, cultural backgrounds and even
language seemed to have been omitted as a source of concern
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An implementation of aid can easily be problematic, causing more problems than it solves
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Is debt relief the best form of aid? Many argue this is a better form of aid, and there have been
significant strides in the last decade to write-down debt in LEDCs
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See Dove page 237
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Many people say it’s like offering a bank cheque to Governments and there are worries that the benefits of this
aid will not reach the truly impoverished because of corruption from their governments
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Many people think that it’s also unfair for those countries who are developing as well yet have been able to
manage their debt situation
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Many people say that the conditions attached to debt relief would widen the gap between rich and poor,
increasing levels of inequality within the country
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This wouldn’t create a trickle- down affect and aid would just be for investment
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Others argue that the money could be spent on aid projects which would immediately help the poor
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You should note these
positives

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14 million slum dwellers now have access to basic health
10,0000 farmers have gained access to markets
Half a million people have been lifted out of extreme poverty
14,000 new classrooms have been constructed and 12,000 new teachers have been employed, this
will decrease the level of dependency on foreign aid as children now have access to better
education increasing the country’s level of literacy, this can be passed on through generations
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5 million children through NGO programmes
Raised 20,000 flood prone homes above the levels of the 1988 flood
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A good example of emergency aid in action is the response to the Cyclone Nargis disaster in Myanmar in 2008
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The emergency aid given to this area had two aims: to provide urgent assistance for the people in the
form of food, shelter, clean water and medical supplies
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The second aim was to rebuild damaged infrastructure e
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roads, schools, bridges, hospitals
and to help restore peoples livelihoods
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The flood security of this area was the most urgent problem much of the rice crops were flooded which is
Myanmar’s main source of income
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Aid is particularly effective when it is used to combat disease like AIDs and malaria
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How do they say it helps LEDCs? This article shows how
the introduction of mosquito nets can help child mortality
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An estimated 170 million working days are lost to the disease each year in Kenya
The number of people unable to work due to malaria is vast as well as the rate of mortality (estimated
627 000 malaria deaths worldwide in 2012) this means that the working population is reduced, thius
leads to a lack of income for families meaning they are unable to afford healthcare and education, this
downward spiral means generations of families cannot earn enough to support themselves
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This has helped LEDC’s as there are
now more healthy people due to vaccines meaning mote people are able to work, giving more to the
country’s economy which can improve GDP as a whole and move the country towards achieving levels
of industrialisation and development
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This increase use of nets from 8% of all households in 2003 to 60% in
2008
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The Gates foundation is the largest private foundation in the world, worth $33
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Microfinance projects, giving people access to grants
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1 million is directed to the poorest female entrepreneurs and is linked with healthcare initiatives
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Nearly $20 million has been offered to the international rice research institute, to fund research in to
producing higher – yielding crops
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Use Geofile 681 p 3 to summarise the work of Oxfam
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It is an international confederation of 15 organisations working in 98 countries worldwide to find lasting solutions to
poverty and related injustice around the world
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Long term:
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Focus on changing people’s attitudes and beliefs, as well as on community development and campaigning
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Help business’s set their own roots and create lasting business partnerships
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Has become a world authoritative with clean water and sanitation in disasters
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Use the film
link about coffee farmers in the article
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givingwhatwecan
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[30]
Assess the relative global benefits of increasing aid or negotiating increasing levels of trade

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