Emelia Oulman Professor Skrobacki Globalization Aid is Counterproductive Outline January 4th 2017 Giving Aid to Developing Countries is Counterproductive to its Goal Aid and development programs are counterproductive as it hinders the economic growth of developing countries and establishes their dependency upon developed ones leading to exploitation not wealth Forms of aid primarily used are multilateral aid meaning more than one contributor and bilateral aid meaning aid from a single country Debt forgiveness is another form which focuses on erasing debt in hopes to bring a country's government and its people out of poverty Wolfensohn quoted in World Bank 2002e argued that we have learned that corruption bad policies and weak governance will make aid ineffective Essentially the counterproductive nature of aid and development programs are inherent even dating back to when people said it thrived From the 1970 s to the 90 s bilateral aid dominated and multilateral aid was steady in the late 70 s However the Cold War aid era influenced aid flows after The collapse of the Soviet Union sparked aid flows to drop and in 1997 aid had decreased by 22 percent Kharas Homi In 2007 the Country Programmable Aid CPA was created Today a wedge has developed between the CPA and Official Development Assistance ODA CPA is a portion of aid that a provider can program for single countries partner countries have a larger voice with one another ignoring the intention of a need based program Rather than the concept of ODA the CPA models as a closer proxy of aid that is sent to partner countries Sub Saharan Africa has been collateral damage of the large wedge between the ODA and CPA statistics show that when focused on Africa aid has shown little increase within the past 2 years despite it s claims Kharas Homi In 2002 the G8 committed to doubling aid by 2010 Since the Monterrey conference aid has risen by more than 50 percent Ironically economic growth of the MENA region has not
The intention of aid is not corrupt The outcome is It is argued that pumping capital into developing countries for infrastructure roads and education leads to economic growth and poverty reduction Burnside C and D Dollar Foreign aid can help the implementation of infrastructure national security humanitarian rights health and education with the hopes of fostering a diplomatic relationship between countries In an interview posted by the International Monetary Fund Berg highlights that when a country might be in desperate need of medicine without the aid its skilled workers it s capital that would have to be devoted to exporting stuff to get that medicine and food aid allows some of the medicine and food to come in anyway and those skilled workers can be used at home for example to help cure AIDS Various leveraging arguments show benefits of foreign aid as it opens the door for the advancement of skilled professions in developing countries and to mutual diplomatic relations between countries Various developing countries nevertheless haven t shown promise in their economic growth In the late 1980's to 90’s the world bank gave massive loans to African countries among others and since then the expectation of their growth in wealth has not been met Africa had little debt after earning independence in the late 1990 s however they went on a borrowing spree and racked up an immense amount of owed capital The impact left African nations owing more than their annual value of goods and services these multilateral loans were eventually forgiven Easterly W Oftentimes forgiven aid is never invested into the developing nation because the government never intended for it to
When investments are not made these countries are not escaping poverty or becoming more developed According to recent work by Peter Boone 1995 1996 the largest component of economic growth within developing countries vary in relation to the intensity of a distorted economy and or government If intentions aren't clear or followed through foreign aid and it's forgiveness play devil in this game of development If rich countries want to help developing ones such as the MENA region then the problem lies within the dominant and dependent relationships that exist between countries Vincent Ferraro Becoming economically independent the obvious intention can easily mature into intense dependency Dependency is often rooted within bilateral aid which plummets economic growth of developing countries Prebisch argues that poorer countries do not earn enough capital from exports because imports cost more Capitalism and exploitation of resources is evidence for their decline in wealth not the lack of aid and development programs When multinational companies exploit labor and resources from developing countries with full awareness from western countries the region's economy is compromised further The United States is a big player in this game of exploitation The MENA region is rich in resources but it is easily exploited with nothing to gain from its natural treasures Susanne Bodenheimer The correlation between aid and growth is controversial however aid does not always create wealth instead it causes dependency and economic decline as shown in the MENA region The history of aid given to developing countries in addition to the constant corruption that protrudes after aid is given is inherently counterproductive to its claims
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