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Foreign Aid for Development Assistance — Global Issues

Foreign aid, or development assistance, is often criticized for being wasted on corrupt recipient governments or for not reaching the poorest people who need it most. Since 1970, the world’s wealthy countries have agreed to give 0.7% of their Gross National Income (GNI) as official international development aid each year, but they have rarely met their promised targets. For example, the US, which is often the largest donor in dollar terms, ranks among the lowest in meeting the stated 0.7% target. Aid is often wasteful, with much of it spent on conditions that require recipients to use overpriced goods and services from donor countries, or tied to donor countries’ political interests. Large projects and grand strategies often fail to help vulnerable populations and can lead to embezzlement of funds. However, aid could be useful if it is focused on improving economic infrastructure, empowering recipients, and promoting democracy-building. In addition to government aid, there are also private contributions and philanthropy, which reflect the generosity of the people of a country and can be more specialized and targeted. Private donations from Americans, for example, exceeded twice the amount of US official foreign aid in 2002. Despite the importance of aid, it is dwarfed by rich countries’ protectionism that denies market access for poor country products, or by third-world debt, unequal trade, and other economic conditions that transfer money from poor to rich countries.

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