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Advantages And Disadvantages Of Foreign Aid To Poverty

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Does foreign aid really contribute to poverty reduction? Poverty has been an ongoing global issue with a challenging debate on how to resolve it. Whilst some believe it is a solution that intends to alleviate poverty, some may argue that it is merely a waste of public spending and highly likely that it will not go to those in need. This paper will highlight the strengths and downfalls of foreign aid through the lenses of the juxtaposing theories realism and liberalism. Firstly, I will briefly describe poverty and the different types of foreign aid. Secondly, I will argue from the liberalist perspective, the advantages of foreign aid, using the case of the United Nations’ provision of microfinance to Mozambique. Following that, I will discuss…show more content…
The most common form of it is Official Development Assistance (ODA). It can be subdivided into short and long term loans, government grants, project aids e.g. schools and hospitals, and program aids such as advancements in the education to sector to nurture young entrepreneurs. Besides aid given by the public sector, there is aid provided by non-government organisations (NGO’s) which serve aid on a smaller scale, and Humanitarian aid which aims to deliver medical and food supplies to countries in need. All of these methods share a common goal to create economic growth and development for the country, increase living standards and ultimately reduce…show more content…
Unlike a liberalist perspective who believe such international institutions can make a difference, realists adopts a “self-help system” in this dangerous world, consequently developing a psychological state of fear and mistrust. They strongly oppose to the effect of international institutions facilitating foreign aid and development, and raise a thought-provoking question: are these institutions really willing to help these economically low developing needs or are they just doing things strategically to meet powerful countries’ needs? After all, the rules of institutions like the United Nations, World Bank and International Monetary Fund (IMF) are all written by leading countries. They may project their aims to foster monetary cooperation and secure financial stability, but with the power they have to make decisions on what to do with these developing countries, the motive to influence the decisions in a way to benefit their domestic economy is very high. According to Hans J. Morgenthau, “international politics, like all politics, is a struggle for power. Whatever the ultimate aims of international politics, power is the immediate aim”. With realists’ high priority of power and focus on relative gains, regardless of foreign aid given through an international institution or given directly by the donor government, the possibility of providing foreign aid with solely the intention to meet their self
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