Foreign Aid

1. Foreign Aid

2. 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???????????

3. 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???

4. 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.

5. 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.

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

7. 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.

8. 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.

9. 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.

10. 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.

11. 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.

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

13. 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?