Foreign aid basically refers to any resources that are given from one entity to another across national borders for the latter’s benefit. These resources generally include money, construction materials, defense supplies, and manpower. Foreign aid must not be mistaken as military aid, as it’s instead a form of aid given by the governments, organizations, or individuals of a more stable country, in order to help people and places within countries that are characterized by lower standards of wealth and less developed infrastructure than their own. Foreign aid can be multilateral, meaning it is sourced from multiple countries and/or organizations (for example UNICEF), or bilateral, meaning it is transferred directly from one nation to another.
Foreign Aid: Sources and Controversy
It goes without saying that the providers of foreign aid given the most attention in the public eye are those charities and nongovernmental organizations (NGOs) who raise money to help people living in the developing world. Still, many for-profit businesses provide foreign aid in their own right, by donating a portion of their revenues to charities or not-for-profit organizations. It also goes without saying that many governments are massive direct contributors themselves.
There are many debates regarding the question as to whether foreign aid actually works for the benefit of its recipients or not. Some economists postulate that foreign aid might actually foster corruption, and make recipient countries too dependent on those extending a helping hand. On the other hand, many times we have seen how foreign aid can actually make things much better, and many of the countries that have received substantial levels of foreign aid have effectively utilized it to fight poverty and improve the social welfare of their respective populaces. To allow us to better understand this complex issue, we will now look at those countries receiving the highest levels of foreign aid today.
Politics in Egypt
The country with the largest amounts of foreign aid received is the Arab Republic of Egypt, with an influx of aid equivalent to $5.5 billion USD. This country has struggled in recent years to fight political instability, and as such has demanded a great deal of international attention. Fortunately, foreign aid seems to have helped Egypt, as the country has registered moderate economic growth. The growth, however, has been insufficient in comparison to the rapid growth of the Egyptian population, which continues to push the limits of Egypt’s infrastructure and resources. Nevertheless, Egypt has dramatically increased its average life expectancy and school enrollment rates, while successfully lowering the child mortality rates of its people as well.
Education and Health in Afghanistan
Afghanistan, despite its $5.3 billion dollars received as foreign aid, continues on a path of painfully slow economic growth. The country is experiencing significant fiscal pressures, due to continuing trends marked by declining revenues and ever-increasing insolvencies. School enrollment is low, and only 43% of Afghani teachers are considered qualified by global standards. For this reason, much of the funding is going towards extending the ongoing efforts to upgrade the qualification of school instructors in the country. Despite so much negativity in other sectors, when it comes to health, we can say that Afghanistan made incredible progress. The improved Afghani healthcare system has come about thanks in large to a stronger government, which has created new public health policies over the last decade. Still, most major health indicators remain below global norms for this low-income country, and much work remains to be done.
Progress in Vietnam
Vietnam, which received $4.1 billion dollars in foreign aid, is truly a success story among developing countries. Strong economic and political reforms have transformed Vietnam from one of the poorest countries in the world into a place where many of its citizens have an income status that would be referred to as ‘middle-class’. The Socialist Vietnamese government has also made remarkable progress in the reduction of poverty among its people. Currently, the country is focusing on improving its business environment, both domestically and abroad. They hope to remove any longstanding obstacles deterring entrepreneurs and capitalists from conducting business inside the country, with the goal to achieve a stronger market economy infrastructure.
Myanmar's Economic Fluctuations
The last country to make the top five on our list is Myanmar, with a foreign aid of $3.9 billion dollars. While Myanmar’s economy has grown rapidly over the last year, economic growth is expected to fall off in 2016. The government continues to strive for improvements in economic reforms, but poverty still has a high prevalence in Myanmar. The nation’s poor are concentrated mainly within its rural areas, where many people still rely mostly on traditional methods of subsistence agriculture. Life expectancy is very low there as well, comorbid with high rates of infant and child mortalities.
Foreign Aid Can Be Made A Tool Or a Crutch
Other countries that receive foreign aid of more than $3 billion US dollars per annum are Ethiopia, Syria, Tanzania, and Kenya. While some countries may fail to effectively utilize their foreign aid dollars in the most efficient manners possible, others are striving to use this much appreciated source of capital to transform developing economies into burgeoning world leaders. As is the case with most things in life, it would appear that, when it comes to foreign aid, it is not necessarily how much you receive but, more importantly, what you do with it.