What is the impact of foreign assistance on developing countries? The world is divided into two parts: developed countries and developing countries. Developing countries are countries that are either poor, agricultural, or both, seeking to become more advanced socially and economically. Despondent countries have constantly been receiving foreign assistance for years. Though, the question that still lingers is: how are they utilizing it? The significance of foreign assistance is to provide access to basic necessities as well as provide people with essential conditions for living a content life. It is the transfer of capital goods or services from a country or international organization for the benefit of the recipient country or its population. Assistance can vary from being economic, military, or emergency humanitarian (e.g., aid given following natural disasters) based.
For as long as the West has become global powerhouse, Western foreign aid has become a staple of solidarity and world peace amidst global injustice. But ironically, the most vulnerable citizens of the West (the disabled, elderly, and orphaned) have become a profit to local state governments and their private industry partners as soon as they took advantage of the welfare system. This system of the West is the same one that uses foreign aid as an instrument with which they can promote political rights for aid. This has caused Western foreign aid to become a permanent fixture on struggling third world countries, who are given tariff-free, unsubsidized food and flimsy housing in droves, but are portrayed and treated as inadequate and almost unwilling, thus maximizing their dependence on subpar outside resources. The influx of Western relief efforts has decimated not only hunger and homelessness, but also local people’s social and economic development in their own homeland.
Foreign assistance is allegedly considered an act of giving that is granted by donor nations, but this of giving has led to dependence among these poorer countries. By prioritizing immediate and short-term results rather than assessing the lasting effects and changes, foreign assistance causes developing countries spiral into a comfortable dependency. Foreign assistance is essential for despondent countries, so that they may break the cycle of poverty that leaves their citizens in low productivity regions and, also, to strengthen their economy. Consequently, the continuation of foreign assistance to these countries is a means of keeping them in an economic dormancy, so that they can eventually devise ways of hastening self-sustainability—however long that takes. Ultimately, developing countries are ill-served by relying too heavily on foreign assistance.
The Second World War was what gave incentive towards the basis of development aid. In the West, the Marshall Plan became the precursor of all development aid across the world. Despite this, other countries like Japan and Western Europe could not be urged to become involved with international aid because their motives did not align with the West’s. Western Europe instead tried to get their allies back for trade openness while East Asian countries were concerned with war reparations. The West’s views and methodology on aid were influenced a lot by the 1960’s, during the time where there was a lot of emergence in independence (seen in Guyana and the 17 Sub-Saharan African nations) and also because of the Cold War, where aid was “…consciously used to stop countries ‘going communist’, and development aid and military aid mixed as necessary” (1 Ehrenfeld). Little has changed in the West’s system of aid, where it is strongly inclined in providing aid in exchange for democratic values. For example, the was the emergence of McCarthyism in the 1950’s, followed by former-president Bill Clinton claiming democratization was one of his three pillars for foreign policy in the 1990’s, more than 40 years later. Alternatively, multilateral agencies such as the International Monetary Fund and World Bank promote development by focusing on government and local adjustment requirements in exchange for aid packages and loan guarantees. These requirements include “…the liberalization of foreign exchange and import controls (freer trade), devaluation of the currency (encouraging exports), anti-inflationary programs including the abolition of price controls,” as well as encouraging investment (1 Ehrenfeld). However, the main culprits of West’s ineffective system of aid, are actually the World Bank, the World Trade Organization, and IMF. About 30% of the World Bank’s donations are tied aid (spending donations on the donor countries goods) which is intended to promote export industry on the recipient’s county but instead causes “…no more competition in the market for the provided goods, allowing firms to charge noncompetitive prices, resulting in excess costs of between 15-30 percent” (1 Ehrenfeld). Another in the West’s system is their usage of the Washington Model, which can be defined as “…liberal democracy, private capitalism, and priority of political rights” (202 Asongu). These ideologies vary much differently from other countries like France, whose aid centers itself around political-economic gains, as does Nordic aid. After success of the Beijing Model of 1976, (206 Asongu), which prioritized economic rights over political rights, (in contrast to the West’s Washington Model), Japan and China have adopted an economic motivated aid structure. This system has undergone changes over the past 60 years, though with one goal in mind—consolidating the West as global powerhouse. It is clear that there is a large disconnect between humanitarian needs and developmental needs in the West’s system of aid.
Western aid is an availed corporation that is complicit in the way how charity has become a multibillion dollar industry. The use of foreign aid as an instrument for the promotion of political rights in countries is a widely accepted fact in policy-making and scholarly dissertations. Studies have shown that the West’s strategic and political motivations in foreign aid have “…meant to solidify their respective alliances and allow them access to territory from which to involve themselves in proxy wars and political currency” so as to hold off the opposition (1 Ehrenfeld). The strengthening of democratic political values through quid-pro-quo (donations for compliance and obedience unto donor countries) has been seen in countries like India, Zimbabwe and Egypt. In India, Kumar states that government assistance in Tamil Nadu, following the Indian Ocean tsunami, was given out based on how far inland people moved and rebuild, despite it violating the Coastal Regulation Zone that prohibits forced evictions (which is what ended up occurring) and the government’s failure to comply with CRZ’s rules about prohibiting established industries from expanding their production in that land. As it turns out, caste system discrimination and forced evictions were all in consequence from the Indian government trying to land lucrative tourism deals with private developers. Nakul then reiterates that the government sold coastal land from the Karikkattukuppam, Tamil Nadu, Dhanushkodi and Killai villages to the private developers “in the name of conservation” (143 Nakul). As for Zimbabwe, democracy consolidated the power of the ZANU PF party, thus showing that Western foreign aid instead aids the neocolonialist agenda. Promoting political rights in a suffering country also furthers a totalitarian agenda because “…ambitions underlying aid are a mix of culture, institutions, power distribution, and dynamics of competitive interests” (Asongu 212). This totalitarian agenda was also seen in Egypt, since most of (if not all) of Egypt’s budget and military comes from foreign aid and this caused Mohammed Morsi’s foreign-funded presidential campaign to be successful despite winning the presidency with less than 50 percent of the population voting for him. This means that Western foreign aid is actually a political market where “…recipient governments, donor aid bureaucracies, and multilateral assistance agencies” (Asongu 212) bargain based on their own goals and interests. The West’s foreign aid motives are strategic and commercial in all its forms and models of its various policies.
Development, on all struggling global landscapes, is dependent on the methods, practices, and preconceived notions derived its donors. This terminological review indicates the complexity behind foreign aid, donors, and recipients in a way that obliterates any possibility of recipient countries to be treated as homogenizing variables. As it turns out, recipient countries are treated as homogenizing variables based on homogenizing attitudes fostered by the West’s interactions with the subjectivities of Northern publics “…that shape their understandings and actions with respect to development issues” (Tallon 1407). Western media has been outlined as discriminatory and counter-effective because of its homogenizing tendencies that shape people’s mobilization in respect to development issues. This is because INGOs and NGOs do not know how to properly recognize the “…morality of representation, the dangers of the emotive pull and the call for dignity in representation amid paternalistic subjectivities” (Tallon 1407). These harmful ideologies are formed by mass-produced commercials and songs such as “Do They Know It’s Christmas?” by Band Aid that portray countries in need as pitiful wastelands that need to be taken by the hand of its Western ‘saviors.’ This imagery is what drives the emotive responses in Western audiences because international development programs are driven by sadness, guilt, compassion, pity and sympathy. The emotional connections an audience has with places and people encourage preconceived notions about the aforementioned, so when INGOs produce content that is both inaccurate and cynical, this encourages paternalistic attitudes that its audience does not challenge. Paternalism is a byproduct of misdirected compassion and global injustice, so by the time action is placed, redevelopment becomes a neo-colonial fantasy instead of lobbying to reform structural causes of inequality. An audience has much culpability as the organizations airing the content. The content is not being challenged because the content being put out there does not emphasize positive long term attitudes about development nor an understanding of the need for change. Instead, the content causes its audience to “…draw from established developmental imaginaries in which the South is seen as poor and in need of help, subtly reinforcing difference as well as the power and dominance of the North” (Tallon 1418). Emotions, as described by Tallon, are a double edged sword that “…separates people, cultures and society through neocolonialism divides that perpetuate and recreate colonialisms and racisms,” (1416) but that can also obliterate the harmful after-effects of inadequate development aid understanding in order to bring places and people together to reconstruct new, creative and progressive aid narratives.
There must be new aid narratives because the way the West chooses to provide aid and bilaterally distributes it is a sad failure because they do not help recipient countries in their capacity to self-develop on a socioeconomic level. There is no empirical formula, dual gap model nor an accurate developmental economic dissertation that explains the relationship between economic growth (measured in GDP) and foreign aid as either positive, negative, or null, but it is important to note that foreign aid has made it almost impossible for many countries since the 80’s to accumulate the minimum export earnings to import capital goods for investment. The lack of domestic savings as well is cause to believe that there is little to no correlation between the two variables (foreign aid vs. economic growth) as no country, in history, has been always to become a global powerhouse through aid. That only happens with trade and innovation, as well as an accurate redevelopment response based on the countries needs and capabilities. Kumar Nakul says that in order to respond to crisis, the ‘knowledge problem’ needs to be evaluated. The ‘knowledge problem,’ a term penned by the renowned Friedrich Hayek, says that social coordination is dependent on an economic level. One cannot exist without the other. In order to evaluate the knowledge problem, aid should be evaluated in three stages; recognition (how severe is the situation and how is relief needed), needs-assessment (who needs it and what areas and individuals needs the help the most) and evaluation (are relief activities effective? In what ways can it improve?)