Foreign Assistance For Foreign Aid

1553 Words7 Pages
The dictionary definition of the term 'foreign aid ' is: "The administered transfer of resources from the advanced countries for the purpose of encouraging economic growth in developing countries." [Bannock:1988 P.164] However, so as not to confuse foreign aid with the investments of multinational corporations or commercial banks, many economists require foreign aid to meet two distinct criteria: 1) Its objective must be noncommercial from the point of view of the donor and 2) it should be characterized by concessional terms. There are many ways and means of transferring resources to LDC 's (Less Developed Countries): Multilaterally, as with the many international agencies such as the World Bank or various departments of the United Nations. Bilaterally, which is an agreement between two countries for a specific amount or item of aid. Direct food aid, or, the granting of preferential tariffs by developed countries to Third World exports of manufactured goods. However, the evaluation of the effects and purposes of foreign aid has become a subjective and value-laden minefield, with many commentators simply picking out the facts which suit their particular ideological perspective. In this essay we will assess how the different forms of foreign aid affect LDC 's, examine the opposing theories of dependency and modernization in relation to development assistance, and finally, question whether the current forms of foreign aid are maximizing their utility. With the
Open Document