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The Impact of Aid: Helping or Hurting the Developed and Developing Worlds?

This article delves into the complexities of international aid, focusing on the roles of Structural Adjustment Programs (SAPs) and Tied Aid. It explores the financial statistics of the world's poorest nations, questioning whether assistance from developed countries truly benefits those in need or perpetuates dependence and poverty. Topics include the consequences of debt on health care in Africa, the controversial nature of SAPs, and the impact of Tied Aid. Are these measures a pathway out of debt or a new form of colonialism?

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The Impact of Aid: Helping or Hurting the Developed and Developing Worlds?

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  1. Hands that help or hurt? Should the Developed World Help the Less-Developed World?

  2. World Poorest 60 countries: • 1970 - $25 billion • 2002 - $523 billion • Africa spends $14 on debt and $5 on health care per capita • 5 countries more than 20% of government income on debt • $1.30 for every $1 borrowed • Also South America - Argentina has $132 debt • Debt in Europe has led to massive austerity measures and public funding cuts.

  3. Structural Adjustment Programs • The SAPs are one way that developed countries give aid to the developing world. • SAPs offer loans/money to poor countries that are often in debt (owe money). • In return for help, the countries agree to restructure/change the way their economies work. • Countries are asked to open their borders to investment, increase exports, and privatize more of their economies.

  4. SAPs—Helping or Hurting? • SAPs can help a poor country’s economy become more efficient and productive. SAPs get rid of “bloated bureaucracies” and “cronyism” and offer a way out of poverty and indebtedness. • OR... • SAPs put more poor people out of work who rely on government help. This is about opening the country to rich companies and people who believe in laissez-faire economics.

  5. Tied Aid • Similar to SAPs, Tied Aid is help given by a developed country to a less-developed country, and with the requirement that the country being helped will buy goods and services from the country helping. • As with SAPs, Tied Aid is also controversial. • Is it wrong to be in a win-win situation? • Is it more helpful to the developed country? • Will as much aid be given if it has no benefit to the developed world?

  6. Useful Terms to Know • Multilateral Aid is help given by many (multiple) countries. • Bilateral aid is help given by one country. • CIDA – Canadian Development Agency- is a governmental organization (middle power idea from Trudeau Era.) • NGOs – non-governmental organization, such as Oxfam. • HIPCs – Highly Indebted Poor Countries-suffer such a high level of debt that they can’t seem to “get out of the hole”. • 2005 – debt cancelled for 16 most HIPCs

  7. Controversies • Should debt be forgiven and HIPCs given a • chance, or does it reward bad behaviour by the developing world and discourage future investment by the developed? • Is aid given by developed countries just another form of colonialism? • Should an improvement of human rights by developing countries be required by donor countries? • Will NGOs treat the developing world more fairly than governmental agencies? Are NGOs rich enough to help?

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