Introduction:
What is foreign aid definition, what are foreign aid’s actual characteristics, and its adverse effects on developing countries? Here today we will discuss it in detail on it. Most of the Third World countries, free from colonial rule and exploitation, have lived almost subhuman lives below the poverty line for a long period in the post-independence period. These states are forced to seek help from advanced imperialist powers to survive. In this opportunity, the developed countries awarded these countries with derogatory terms such as underdeveloped, backward, etc., and promised to provide them with some dependent and harmful conditions.
These conditions are accepted at unnecessary cost by underdeveloped countries for various reasons. As a result, the economies of developing countries gradually become interdependent. At one stage these poor states face extreme consequences. In all aspects of the state, planning, and policy-making are done at the beck and call of donor countries.
What is foreign aid definition?
In general, the amount of foreign money or resources given unconditionally or conditionally by a country to another country for the normal needs or emergency needs of a country is called foreign aid. In this case, the countries receiving financial aid are usually poor. So foreign aid refers to the transfer of capital that rich countries provide to poor countries to build their economic infrastructure.
Foreign aid began in 1947 with John Marshall’s European Economic Recovery Plan of the United States. At this time, the first formal foreign aid process is considered to have started with massive financial aid to war-torn Europe. Foreign aid can take many forms.
For example: All types of economic and military aid (repayable and non-repayable), long-term loans, private investment, technical and emergency aid, participation of some countries in multinational companies, etc. Foreign aid also includes spending by the developed world on political, cultural, and military influence in the developing world. However, according to the definition of the United Nations, only economic aid is considered foreign aid.
Conditions of Foreign Aid:
Donor groups don’t just give aid to a country. In return, they take on policy-making roles in that country So, in this entitle article ‘What is foreign aid definition’ give full information. After giving aid, they turn their noses up at various issues that question the independence and sovereignty of a country. The following are the general conditions that donor countries impose on aid:
1. High rate of interest:
Donor countries and organizations don’t always give aid. They provide help in exchange for the high rate of interest. That is, it is true that they give help, but in return, they charge extremely high interest rates.
2. Supply of unskilled labor:
Donor groups for many large projects provide semi-skilled and unskilled workers from their countries. As a result, the unemployment rate in developing countries does not decrease. For example, during the construction of the Bangabandhu Yamuna Bridge in Bangladesh, the donor group employed workers, machinery, inspectors, and observers.
In other words, the workers of Bangladesh were deprived of employment opportunities for millions of workers there. Even the Padma Bridge project since China is funding it; will provide the workers, machinery, and everything else. In such a situation, the government of Bangladesh will have nothing to do. As a result, the projects do not improve much. For example, it can be said that the principal amount along with the interest of the Bangabandhu Yamuna Bridge has not yet been paid, but the bridge is starting to be demolished.
3. Application of strict conditions:
Donor countries impose various conditions before giving aid to a project. In such a case, even if those conditions are difficult for the developing world, they still have to fulfill them or they will not provide the loan. For example, before giving aid in the education sector, they decide on the curriculum and what will be included in schools and colleges. Even if their proposal becomes difficult to accept, they must agree or they will stop the loan assistance.
4. Establishment of good governance:
Recently, especially since the late 1990s, every donor organization and country in the world has accepted the establishment of good governance as one of the conditions for providing aid. At this time, the donor agencies almost unanimously decided that only those countries will be given aid that will be committed to establishing good governance or will continue the action plan to establish good governance.
5. What is foreign aid definition: Aid to unproductive sectors:
Donor groups do not provide loans or aid to productive sectors. For example, despite being an agricultural country, they do not lend to our country’s agriculture. It provides loans only to unproductive sectors. In such a situation, the main problem of the developing world remains and no such development of the country takes place.
What is Sustainable development?
Sustainable development does not only mean limiting the consumption of the present generation to meet the needs of future generations; rather, it also ensures that the process of meeting the basic needs of the remaining population is not hampered by the unsustainable consumption of the minority. Therefore, another dimension of sustainable development is intergenerational equity. In other words, the prerequisite for sustainable development is economic development in harmony with the environment and equitable distribution based on social justice.
Unleashing Sustainable Development: Breaking Free from the Shackles of Foreign Aid Conditionality:
The developed world’s income, behavior, consumption patterns, and economic outlook are major barriers to sustainable development. This is discussed below:
1. We know that saving plays a major role in investment and investment plays a major role in the economic development of a country. Investment is low due to low savings rates in our country. Therefore, foreign cooperation is essential in building the country’s infrastructure. But with foreign aid, donor groups make their conditions that cannot be met. In such a situation, the sustainable development of developing countries is not possible as a result of foreign aid.
2. Exports are very low compared to imports of developing countries like Bangladesh. So the amount of foreign exchange is also very low. Foreign exchange requirement is essential for the overall development of the country. But before providing much-needed foreign exchange to developing countries, donor groups impose very steep interest rates and conditions on aid. As a result, developing countries find it difficult to repay their debts, and how sustainable development is possible remains a question.
3. Developing countries are technologically backward. In this situation, it collects technology from the developed world to solve all kinds of problems and develop a big project. As a result, the developed world wants to share that space. For example, when our country wants oil, coal, etc., they want a share of those natural resources in return. As a result, the sustainable development of developing countries is hindered when all the machinery for the extraction of natural resources is used by the developed world.
4. In exchange for aid to developing countries, donor countries want to play the role of policymakers in the politics of developing countries. They want to keep conflict in developing countries so that those conflicted countries run to donor countries for help. In such a situation, their authority is maintained and they grab various privileges from the government of that country in return for giving help. As a result, the sustainable development of the developing countries is hindered and the country falls into various problems.
5. The idea that a continued flow of foreign debt aid will accelerate a country’s economic development through direct and indirect increases in savings and investment is not unconditional. Because higher flows of credit aid are directly and indirectly related to unbridled growth in private consumption, import expenditure, military expenditure, government consumption, and employment expenditure. As a result, the rate of domestic savings decreases instead of increasing. Massive credit inflows do not improve the quality of life of the poor. As a result, what the country has is getting eroded. In this situation, sustainable development is hindered.
6. It is very difficult to solve the bureaucratic complexities involved in availing loans. The developing world is bound by a barrage of tough conditions, in the throes of skillful diplomatic art. On the other hand, taking a loan in a polarizing capitalist system has to go through various stages which makes developing countries like Bangladesh face a difficult equation. As a result, if all conditions are to be met, sustainable development is hindered.
Recommendations for solving these Foreign Aid cruelty issues:
The first and foremost task of the developing world is to see their problems not through donor eyes but through their own eyes to determine which of their suggestions are acceptable and which are not. In short, if the imposed conditions cannot be logically rejected, then there is no benefit to the developing countries with the debt like a noose around the neck. But infrastructure development can bring capital mobility, which is important for any country’s economy. If the economy can be developed through the activities of the government and the people, it can be expected that developing countries will also be able to accelerate sustainable development.
Conclusion:
In the title of What is foreign aid definition article, we have covered all the necessary analysis. Currently, foreign aid is at the center of problems and concerns of developing countries like Bangladesh. Because big aid agencies like USAID, DFID, CIDA, and DANIDA are no longer willing to assist in areas such as safe water, sanitation, nutrition, population issues, and microfinance.
In cases where loan requirements are high. They do not provide loans, especially for domestic sustainable development like agriculture, industry, etc. On the contrary, they provide loans in all places where sustainable development is possible, but sustainable development is not possible due to the changing conditions of donor agencies and countries. So it can be said. The conditionality of foreign aid hinders sustainable development in the developing world.