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Development aid or development cooperation (also development assistance, technical assistance, international aid, overseas aid or foreign aid) is aid given by governmental and economic agencies to support the economic, social and political development of developing countries. Aid (from the french word aide, also known as international aid, overseas aid, or foreign aid, especially in the United States) is Aid (from the french word aide, also known as international aid, overseas aid, or foreign aid, especially in the United States) is This article is about international development See the closely related concept of development cooperation. Developing countries are countries that haven't reached Western-style standards of democratic government free market economy industrialization social programs and human rights guaranties Since the 1990s, the idea of partnership and the corresponding term development cooperation[1] have replaced the traditional situation in which the relationship was dominated by the wealth and specialised knowledge of one side. This article is about international development See the closely related concept of development cooperation. Development aid may come from developed or developing country governments as well as from international organizations such as the World Bank. The term developed country, or advanced country, is used to categorize countries with developed Economies in which the tertiary and quaternary sectors The World Bank is an internationally supported Bank that provides financial and technical assistance to developing countries for development programs (e It is distinguished from humanitarian aid as being aimed at alleviating poverty in the long term, rather than alleviating suffering in the short term (Foreign aid, on the other hand, includes both development aid and humanitarian aid. Humanitarian aid (also called succour) is material or logistical assistance provided for humanitarian purposes typically in response to humanitarian crises Some governments include military assistance in the notion "foreign aid", although many NGOs tend to disapprove of this).

The nations of the Organisation for Economic Co-operation and Development (OECD), made up of the developed nations of the world, have committed to providing a certain level of development assistance to underdeveloped countries. This is called Official Development Assistance (ODA), and is given by governments on certain concessional terms, usually as simple donations. Official Development Assistance (ODA is a category of Development aid. It is given by governments through individual countries' international aid agencies (bilateral aid), through multilateral institutions such as the World Bank, or through development charities such as Oxfam. An aid agency is an organisation dedicated to distributing Aid. This article is about the political term for the term as used in Biology, see symmetry (biology. Multilateralism is a term in International relations that refers to multiple countries working in concert on a given issue The World Bank is an internationally supported Bank that provides financial and technical assistance to developing countries for development programs (e Oxfam International is a confederation of 13 organizations working with over 3000 partners in more than 100 countries to find lasting solutions to poverty and injustice

Contents

Background

The offer to give development aid has to be understood in the context of the Cold War. Cold War is the state of conflict tension and competition that existed between the United States and the Soviet Union (USSR and their respective allies from the The speech in which Harry Truman announced the foundation of NATO is also a founding document of development policy. The North Atlantic Treaty "In addition, we will provide military advice and equipment to free nations which will cooperate with us in the maintenance of peace and security. Fourth, we must embark on a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas. More than half the people of the world are living in conditions approaching misery. Their food is inadequate. They are victims of disease. Their economic life is primitive and stagnant. Their poverty is a handicap and a threat both to them and to more prosperous areas. For the first time in history, humanity possesses the knowledge and skill to relieve the suffering of these people. “

Development aid was aimed at offering technical solutions to social problems without altering basic social structures. Social structure is a term frequently used in Sociology and Social theory — yet rarely defined or clearly conceptualised (Abercrombie et al The United States was often fiercely opposed to even moderate changes in social structures, for example the land reform in Guatemala in the early 1950s. Land reforms (also Agrarian reform, though that can have a broader meaning is an often- controversial alteration in the societal arrangements whereby government Guatemala (República de Guatemala) is a country in Central America bordered by Mexico to the north and west the Pacific Ocean to the southwest

Quantity

Main article: Official Development Assistance

Over the last 20 years, annual official development assistance (ODA) has been between US$ 50bn and US$60bn but has reached over $100bn in 2005. Official Development Assistance (ODA is a category of Development aid. Official Development Assistance (ODA is a category of Development aid. [2] The United States is the world's largest contributor of ODA in absolute terms ($15. The United States of America —commonly referred to as the 7 billion, 2003), but the smallest among developed countries as a percentage of its GDP (0. 14% in 2003). The UN target for development aid is 0. 7% of GDP; currently only five countries (with Norway in the lead with 0. Norway ( Norwegian: Norge ( Bokmål) or Noreg ( Nynorsk) officially the Kingdom of Norway, is a Constitutional 92%) achieve this.

Among developed and developing nations, Saudi Arabia’s ODA volume is second only to the USA. The Kingdom of Saudi Arabia, KSA ( المملكة العربية السعودية, al-Mamlaka al-ʻArabiyya as-Suʻūdiyya) or Suudi The United States of America —commonly referred to as the [3] As percentage of GDP, Arab states of the Persian Gulf are the most generous, with Kuwait contributing 8. The araB gene Promoter is a bacterial promoter activated by e L-arabinose binding The Persian Gulf, in the Southwest Asian region is an extension of the The State of Kuwait ( دولة الكويت IPA [dawlatt̪ alkuwajt̪]) is a sovereign Arab Emirate on the coast of the Persian Gulf, enclosed 2% of its gross national product and Saudi Arabia contributing 4% in 2002. The Kingdom of Saudi Arabia, KSA ( المملكة العربية السعودية, al-Mamlaka al-ʻArabiyya as-Suʻūdiyya) or Suudi See also 2002 (disambiguation Year 2002 ( MMII) was a Common year starting on Tuesday of the Gregorian calendar. [4]

Private contributions also make a significant, albeit harder to track, contribution to development aid. Private donations in the United States, for example, are estimated to be at least $34 billion a year, broken down as such:

It is this last figure, remittances, that blurs many definitions of aid: for example, money sent home by foreign workers is counted in this sum. The exact result and effect of remittance money is of some debate. However, even if it is factored out, private donations still match ODA in the US. In many cases privately donated money is spent much more effectively than ODA, which must go through various governmental layers before reaching the problem. However, in other cases private sums disappear completely without any trace of their existence. Unfortunately, private aid figures are not tracked so well as ODA in many countries, so it is difficult to make across-the-board comparisons between various nations.

In the United States, popular estimates of spending on aid are often highly inflated. Surveys show that people typically think about 20% of the federal budget is spent on aid; the real number a little less than 1%. [5] In absolute terms, the $15-20bn of aid compares with $50bn spent annually on the war on drugs and $500bn spent on the military. The War on Drugs is a prohibition campaign undertaken by the United States government with the assistance of participating countries intended to reduce the Illegal

Aid effectiveness

Main article: Aid effectiveness

Aid effectiveness refers to the degree to which development aid works, and is a subject of significant disagreement. Aid effectiveness is the effectiveness of Development aid in achieving economic or Human development (or development targets Dissident economists such as Peter Bauer and Milton Friedman argued in the 1960s that aid is ineffective. Many econometric studies in recent years have supported the view that development aid has no effect on the speed with which countries develop. Negative side effects of aid can include an unbalanced appreciation of the recipient's currency (known as Dutch Disease), increasing corruption, and adverse political effects such as postponements of necessary economic and democratic reforms. Appreciation is a term used in Accounting relating to the increase in value of an Asset. Dutch disease is an economic concept that tries to explain the apparent relationship between the exploitation of Natural resources and a decline in the manufacturing

There is also a lot of debate about which form development aid should take in order to be effective. It has been argued that a lot of government-to-government aid was ineffective because it was merely a way to support strategically important leaders. A good example of this is the former dictator of Zaire, Mobuto Sese Seko, who lost support from the west after the cold war had ended. The Republic of Zaire (pronunciation; République du Zaïre was the name of the present Democratic Republic of the Congo between October 27, 1971 Mobutu Sese Seko Nkuku Ngbendu wa Za Banga ( October 14, 1930 September 7, 1997) known commonly as Mobutu, or Mobutu Mobuto, at the time of his death, had a sufficient personal fortune (particularly in Swiss banks) to pay off the entire external debt of Zaire.

Another major point of criticism has been that western countries often project their own needs and solutions onto other societies and cultures. As a result of this criticism, western help in some cases has become more 'endogenous', which means that needs as well as solutions are being devised in accordance with local cultures.

It has also been argued that help based on direct donation creates dependency and corruption, and has an adverse effect on local production. As a result, a shift has taken place towards aid based on activation of local assets and stimulation measures such as microcredit. This article is specific to small loans For financial services to the poor see Microfinance.

Aid has also been ineffective in young recipient countries in which ethnic tensions are strong: sometimes ethnic conflicts have prevented efficient delivery of aid.

In some cases, western surpluses that resulted from faulty agriculture- or other policies have been dumped in poor countries, thus wiping out local production and increasing dependency.

In several instances, loans that were considered as irretrievable (for instance because funds had been embezzled by a dictator who has already died or disappeared), have been written off by donor countries, who subsequently booked this as development aid.

In many cases western governments placed orders with western companies as a form of subsidizing them, and then later shipped these goods to poor countries who often had no use for them. These projects are sometimes called 'white elephants'.

A common criticism in recent years is that rich countries have put so many conditions on aid that it has reduced aid effectiveness. In the example of tied aid, donor countries often require the recipient to purchase goods and services from the donor, even if these are cheaper elsewhere. Tied aid is Foreign aid that must be spent in the country providing the aid (the donor country or in a group of selected countries Other conditions include opening up the country to foreign investment, even if it might not be ready to do so. [6]

An excerpt from Dr. Thomas Dichter's recently published book Despite Good Intentions: Why Development Assistance to the Third World Has Failed reads, "This industry has become one in which the benefits of what is spent are increasingly in inverse proportion to the amount spent - a case of more gets you less. As donors are attracted on the basis of appeals emphasizing "product," results, and accountability…the tendency to engage in project-based, direct-action development becomes inevitable. Because funding for development is increasingly finite, this situation is very much a zero-sum game. What gets lost in the shuffle is the far more challenging long-term process of development. "

The Massachusetts Institute of Technology's Abhijit Banerjee and Ruimin He have undertaken a rigorous study[7] of the relatively few independent evaluations of aid program successes and failures. They suggest the following interventions are usually highly effective forms of aid in normal circumstances:

Private aid

Development charities make up a vast web of non-governmental organizations, religious ministries, foundations, business donations and college scholarships devoted to development aid. Human immunodeficiency virus ( HIV) is a Lentivirus (a member of the Retrovirus family that can lead to acquired immunodeficiency syndrome Malaria is a vector -borne Infectious disease caused by Protozoan Parasites It is widespread in tropical and subtropical regions including Mosquitoes are insects in the family Culicidae. They have a pair of scaled wings a pair of Halteres, a slender body and long legs Estimates vary, but private aid is at least as large as ODA within the United States, at $16 billion in 2003. World figures for private aid are not well tracked, so cross-country comparisons are not easily possible, though it does seem that per person, some other countries may give more, or have similar incentives that the US has for its citizens to encourage giving. [8]

Remittances

It is doubtful whether remittances, or money sent home by foreign workers, ought to be counted as a form of development aid. Remittance can also refer to the Accounting concept of a monetary payment transferred by a customer to a business Remittances are transfers However, they appear to constitute a large proportion of the flows of money between developed and developing countries, although the exact amounts are uncertain because remittances are poorly tracked. World Bank estimates for remittance flows to developing countries in 2004 totaled $122 billion; however, this number is expected to change upwards in the next few years as the formulas used to calculate remittance flows are modified. The World Bank is an internationally supported Bank that provides financial and technical assistance to developing countries for development programs (e The exact nature and effects of remittance money remain contested [9], however in at least 36 of the 153 countries tracked remittance sums were second only to FDI and outnumbered both public and private aid donations. [10]

The IMF has also reported that private remittances may have a negative impact on economic growth as it is often used for private consumption of individuals and families, not necessarily for economic development of the region or country. [11]

See also

References

  1. ^ Development Cooperation. The following is a timeline of mainly American events in the history of Humanitarian aid, international relief and development aid Development cooperation between the European Union and the countries of the African Caribbean and Pacific ( ACP) celebrated its 50th anniversary in 2007 This article is about international development See the closely related concept of development cooperation. Conditionality is a concept in International development, Political economy and International relations and describes the use of conditions attached to Aid effectiveness is the effectiveness of Development aid in achieving economic or Human development (or development targets Debt relief is the partial or total forgiveness of Debt, or the slowing or stopping of debt growth owed by individuals corporations or nations The Millennium Challenge Account (MCA run by the Millennium Challenge Corporation, is a bilateral development fund announced by the Bush administration This is a list of aid agencies which provide regional and international Development aid or assistance divided between national and international organizations The Bretton Woods system of monetary management established the rules for commercial and financial relations among the world's major industrial states Tied aid is Foreign aid that must be spent in the country providing the aid (the donor country or in a group of selected countries Development economics is a branch of Economics which deals with economic aspects of the development process in low-income countries. An inclusive business is a sustainable Business that benefits Low-income communities The OECD 's Development Assistance Committee (DAC is a forum for its member states to discuss issues surrounding development and poverty reduction in developing countries The European Centre for Development Policy Management is an independent foundation which was established in 1986 in order to monitor and support development cooperation between the World Health Organization. Retrieved on 2008-01-25. 2008 ( MMVIII) is the current year in accordance with the Gregorian calendar, a Leap year that started on Tuesday of the Common Events 41 - After a night of negotiation Claudius is accepted as Roman Emperor by the Senate
  2. ^ Aid flows top USD 100 billion in 2005. Organisation for Economic Co-operation and Development (2006). Retrieved on 2008-02-06. 2008 ( MMVIII) is the current year in accordance with the Gregorian calendar, a Leap year that started on Tuesday of the Common Events 46 BC - Julius Caesar defeats the combined army of Pompeian followers and Numidians under Metellus Scipio
  3. ^ Saudi Aid to the Developing World
  4. ^ Saudi Arabia statement at the world summit for sustainable development
  5. ^ Americans on Foreign Aid and World Hunger: A Study of U.S. Public Attitudes. Program on International Policy Attitudes (2001). The Program on International Policy Attitudes (PIPA is an institution devoted to research on the public opinion of international politics Retrieved on 2008-02-06. 2008 ( MMVIII) is the current year in accordance with the Gregorian calendar, a Leap year that started on Tuesday of the Common Events 46 BC - Julius Caesar defeats the combined army of Pompeian followers and Numidians under Metellus Scipio
  6. ^ US and Foreign Aid Assistance. Global Issues (2007). Retrieved on 2008-02-21. 2008 ( MMVIII) is the current year in accordance with the Gregorian calendar, a Leap year that started on Tuesday of the Common Events 362 - Athanasius returns to Alexandria. 1245 - Thomas, the first known Bishop of Finland
  7. ^ Making aid work (2003). Retrieved on 2008-02-21. 2008 ( MMVIII) is the current year in accordance with the Gregorian calendar, a Leap year that started on Tuesday of the Common Events 362 - Athanasius returns to Alexandria. 1245 - Thomas, the first known Bishop of Finland
  8. ^ Ranking The Rich Based On Commitment To Development. globalissues. org. Retrieved on 2008-03-06. 2008 ( MMVIII) is the current year in accordance with the Gregorian calendar, a Leap year that started on Tuesday of the Common Events 1079 - Omar Khayyám completes the Iranian calendar. 1454 - Thirteen Years' War: Delegates of
  9. ^ Are Immigrant Remittance Flows a Source of Capital for Development? - WP/03/189
  10. ^ Approaches to a Regulatory Framework for Formal and Informal Remittance Systems: Experiences and Lessons, February 17, 2005
  11. ^ Are Immigrant Remittance Flows a Source of Capital for Development

Further reading

External links

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