In the past decade, there has been a dramatic paradigm shift in foreign aid, with China as one of the top donors in Africa. However, many scholars have argued on whether aid is indeed helpful and effective in stimulating growth and development especially, in Africa. On a broad scale, one would ask, what impact does handing out tons of money to poor countries have? Is it sustainable? Is it causing any developmental change? Is it yielding positive results? Can we even say that the aid that is given out to poor countries is actually used for its intended purpose? In reality, we know that many of the poorest countries also have corrupt governments and as a result, a great deal of these monies is embezzled or wasted. Traditionally, it was assumed that foreign aid would fight poverty, health, and educational issues and that this would spur economic growth rates in poor countries. However, in contrast a number of studies have found that aid might not work in all countries but would drive growth in countries with low corruption, good governance and sound policies.
Let’s take a quick ride through the ‘glitz and glamour’ of the foreign aid paradise. Amongst other things, foreign aid helps to safeguard countries in terms of security, health and conflict. Aid helps to contain the acts of such terrorist groups through the provision of troops and ‘cease-fire’ resolutions. Some people also argue that foreign aid boosts savings and increases capital in poor countries. Aung San Suu Kyi’s article on “Peace, Culture and Democracy”, mentions that if the United Nations wants to promote development, then it must support agencies that empower people to contribute to development hence rich countries should continue to give aid to poor countries to reduce the shortage of capital, savings and investments. Also, since most developing countries lack domestic savings and investments, entrepreneurs and other businesses find it difficult to acquire the needed credit for empowerment, expansion and growth.
Continually, humanitarian reasons also account for why rich countries continue to give aid to poor countries. Mostly, high income countries believe that it is their social, religious or a moral duty to help people in other countries who suffer from war, diseases and other natural disasters. After the Post-Cold War conflicts which caused over five million casualties, with 95% being civilians, donor countries found it necessary to give humanitarian relief efforts and development assistance to rebuild war-torn countries and also ensure access to water, food, shelter, health care, and so forth. Last, foreign aid also helps maintain political stability in a lot of countries. For example Egypt, Israel and many Middle-Eastern countries overthrew bad governments with the assistance of foreign countries especially from the West. The civil war in Liberia was stopped and the Boko Haram in Nigeria is being handled because countries such as the U.S.A other U.N countries sent help in the form of money and peace-keeping troops.”
Driving down the road of the ‘woes and anguish’ in the Darkness of foreign aid, one can argue that aid deters economic growth, promotes corruption and leads to dependence. Additionally, amidst all the amount of foreign aid coming in, most African countries are still wallowing in poverty. According to Adam Smith foreign aid was supposed to promote growth, savings, and investment, so it could lead to self-sustenance. However, overtime, the trend has been that, many African countries spend more on consumption goods than they do on savings and investments. Hence they do not grow to reach the self-sustaining phase. Hence, this makes African countries very dependent on foreign aid. This example is not far-fetched and can be applied to our beloved country Ghana. We have always been receiving foreign aid, but yet, majority of our people are still struggling and living in poverty.
We believe that foreign aid is good, but the management of foreign is the problem. We think that the donors should not just give the money to us, but they should send a project manager or overseer to be working alongside the country it gives the aid to. That way, the donors would make sure that the money goes where it is supposed to and does what it’s supposed to do. This would minimize the impact it has economically, decrease corruption and make the poor countries more independent. So then our food for thought for the week is whether foreign aid is good or bad? Or could it be that there is the need for more efficient systems to make sure that the aid really does what it’s supposed to do?
Thus is Foreign Aid a means to Paradise or Darkness?
By: Henrrietta Ama Dzisi, Abena Gyekye and Maame Kyerewa Antwi