Foreign Aid From The United States

There are two main perspectives on foreign aid in Australia – are we giving too much or not enough? Foreign aid is given to developing countries, and is necessary to build an environment where policies and infrastructure can be in place to support other sources of finance. Australia is part of the worldwide foreign aid commitment as we value that everyone should have a fair go, and the country plans to give $3.9 billion over 2017 and 2018. We help countries in need by contributing, food, resources, providing financial assistance, exchanging goods, personal time and knowledge. The main types of aid are humanitarian aid, which is disaster relief and emergency aid and development aid, which is a long-term commitment between nations. Australian aid is strongly on development aid particularly focused on the Asia-Pacific region, but it also has a strong commitment to African and South Asia. Interestingly, 90% of Australia’s foreign aid goes to Asia-Pacific countries such as Indonesia and Papua New Guinea, because if they build into a developed nation, then we can build trade relations, regional security and partner in defence. This is a polarizing issue that divides the nation due to different views on Australia giving aid, however, a strong foreign aid program is vital for Australia to build successful relations and regional security.

Ever had that one friend? The one who tries to help, but no matter how hard he tries, he just aggravates the situation. This friend, Steve, insists he is helping, and those around, too, would support that he is indeed helping. But Steve is actually worsening the circumstances. He is like countries who provide foreign aid to less developed countries. Foreign aid, defined as “the international transfer of capital, goods, or services from a country or international organization for the benefit of the recipient country or its population,” can be military, economic, or humanitarian (“Foreign”). It is often granted to less developed countries in order to evoke government reforms or to stimulate economic growth. However, foreign aid neither elicits government reform, nor does it consistently and reliably stimulate economic growth; therefore, the United States should discontinue providing foreign economic aid.

On one side of the issue the supporters of developmental aid believe that the United States is doing more than a great job by offering economic assistance to countries that need help to develop. These individuals are aware of the unfortunate poverty levels in many countries abroad. They believe that it is the duty of the American people to help reduce the poverty levels in countries in which people live with less than a dollar a day. In fact, some supporters believe that the U.S. is not offering enough support to the poorer countries. Many have

Foreign aid is a term referring to resources and money lent out or given to a ‘recipient nation’ who is in need by a wealthier ‘donor country’. This can be given either in long term ‘humanitarian aid’, aimed at improving the welfare and development of the human population, or short term ‘emergency aid’ focused on providing the daily necessities to a population after a war, or natural disaster. Despite common belief, the purpose of foreign aid is not only to help countries which are in need, but also to achieve a range of social, economic, cultural and geopolitical goals that will benefit our national interest. Australia is currently the largest foreign aid donor of its nearest neighbour,

Riddell, Roger C. 2007. Does Foreign Aid Really Work? 1st ed. OXFORD: Oxford University Press, USA.

"Between 1945 and 1983 the U.S. gave away $321 billion in foreign assistance, concessional loans, military aid, and humanitarian assistance." (Cato Policy Report, 1991) The Clinton administration task force admitted that, "Despite decades of foreign assistance, most of Africa and parts of Latin America, Asia and the Middle East are economically worse off today than they were 20 years ago." (Conservative Chronicle, 1994) United States financial aid does not help the problem it stabilizes it until it's withdrawn.

More than 3 million lives have been saved every year through programs relating to foreign aid. In addition to, more than 50 million couples are using family planning because of the aid. Lives are being saved every day because of the little bit of money we take out of our paychecks. If we can as a country can help save lives, then that’s something we should be willing to do. Statistics continue to show that we’re saving lives, not hurting them. For example, “During the decade, under-5 child mortality declined from a mean of 109.2 to 72.4 deaths per 1,000, or 36.8 fewer deaths among those children in the countries that received the most health aid, the researchers found (a 34 percent reduction). In the countries receiving the least, under-5 mortality fell from 31.6 to 23.2 deaths per 1,000, or 8.4 fewer deaths per 1,000 live births (a 26 percent reduction), the researchers reported”(Richter). During this decade, we saved more lives than we caused harm to, therefor foreign aid is being put to a good use and it is being used for exactly what it should be. The more Aid donated to the health and well-being of other countries, the brighter future we can have as a

This choropleth map shows the geographical allocation of Australian foreign aid in the year of 2012. As you can see, Indonesia marked in red is the largest recipient of Australia’s foreign aid program, receiving an estimated 137 million US Dollars of Official Developmental Assistance annually. The primary reason for this is the fact that Indonesia, while being one of Australia’s closest political neighbours, is also one the most populated countries in the developing world.

Today, there is a tremendous amount of literature on the relationship between aid and growth (Hudson, 2004). McGilivray provides a recent comprehensive survey of the theoretical and empirical literature on foreign aid and growth. (McGillivray, 2006)

Foreign aid is offered for many purposes and ways and the dilemma of aid is not whether aid works or not, but how and when varied instrument can be made to work better in different country circumstances (Hansen and Tarp 2000, pp. 19-20). Another study conducted by Minoiu and Reddy argues that aid matters for economical growth and it can contribute significantly, but only specific kinds of aid have clear cut impact on growth and only in a long term. Overall, foreign aid has a significant effect in those cases when it ranks high in the aid quality index while geopolitical aid has been found with zero or negative effect on

On the issue of aid, Pronk (2001) pointed out that aid can be seen as a catalyst rather than a primer mover, in the sense that aid is not a cause of development but a push or support to development. In the China-Africa relation, the role of aid has been to allow recipient countries to level their investment above domestic savings. Accordingly, Cheney and MacEwan (1966) assess that the function of aid is to enable the economy to expand through its ability to invest. In other words, aid serves as a catalyst. Griffin (1970) cautioned aid ability to act as a catalyst, contending that due to its negative effect, it retards economic growth instead of driving it. For Griffin (1970), aid is an impediment, not a catalyst. Furthermore, Boyce (2002) argued that, to describe aid as a catalyst for development, a sound analysis is essential to measure its negative and positive effect on the economy.

The history of international development aid can be tracked down to antiquity, however, the modern era saw international development aid begin to evolve in the 19th and early 20th century (Kapur, 2003) but the true expansion of international development aid was in the aftermath of the Second World War. The most significant events in accordance with the establishment of international development aid were the creation of The United Nations, The Marshall Plan, and The Bretton Woods conference that established the World Bank and the IMF. The modern manifestation of international development aid is extremely widespread. There are countless international organizations and governments present which all contribute to international development aid as it is a moral responsibility, however, what is the effectiveness of the aid they provide? This paper argues

2009 Review of The Trouble with Aid: Why Less Could Mean More for Africa, and: The Trouble with Africa: Why Foreign Aid Isn’t Working. Africa Today 56(2): 97-101

Figure 1 Humanitarian Aid funding to the developing world from 2000-2008 in million US$ (Organization for Economic Co-operation and Development, 2010)

I period to current global aid allocation programs, scholars in the field of international aid have