Foreign aid is a means of helping impoverished nations, for decades now host countries have got involved in humanitarian activity through giving aid to poorer countries. This has allowed to diplomatic relations between countries to flourish due to this, and the recipient country as a token of appreciation has always opened its doors to its giver by allowing them to use their military sources or letting them use their country as a base.
Financial aid has allowed some less economically developed countries to invest in improving their economies and their countries, such as their infrastructure or injecting money in their education. It has also allowed them to eradicate common diseases in their countries.
However, it’s not all good news.
Corruption; the enemy of progress. Many poor countries tend to slip through the note with regards to their accountability and where their money is spent, but not anymore. Exhibit A, Zimbabwe.
Robert Mugabe, the president of Zimbabwe, also known as the ‘Man who ruined Zimbabwe’. Money that was given to the country as aid, went through Mugabe and his regime before it was then used to ‘benefit’ the country.With reports of money going missing from the Reserve Bank, and Mugabe’s closest allies being quite closely linked to the bank itself, it’s quite clear the funds went towards him and his families lavish lifestyles. His son commonly reported to be wearing expensive watches, and his first lady always jewellery shopping, the financial aid was only pocketed by a few individuals rather than its main purpose, eradicating poverty in the country. Foreign aid is clearly not always put to good use and can be used to contribute towards wealth inequality when placed into the hands of corrupt leaders.
Relying on aid won’t always be the answer to a progressive economy, if a country continued to receive a said amount of money from a host country every year, that recipient country has now become dependent on the funds coming in externally rather than investing in its work force to boost their economy. Communities have now also become dependent on the money that is donated, they’re not quite used to their own livelihoods. That is one of the main downsides to foreign aid, reliance. This also feeds into western-centralism. The dependency theory applies here; “third world” countries are not underdeveloped in their natural state, rather underdevelopment is caused by developed nations, one way in which is through aid. Rather than collecting revenue from its citizens through taxes for example, governments receiving aid instead rely on foreign governments. This is corrosive and breaks ties between the government and its people, states Angus Deaton, economist and Nobel prize winner from Princeton University (World Economic Forum, 2015).
A Zimbabwean blog, The Patriot, states that “Africa is a new frontier from which to generate vast profits which in turn can be used to reinvigorate ailing Western economies.” Africa is too often just seen as a monolithic continent with vast resources up for grabs, and where cheap labour with few regulations can be obtained, rather than a prospering continent in and of itself.
Dependency can be seen in Zimbabwe as it is currently trying to pick up the pieces left by Mugabe. A current downfall in Zimbabwe’s economy was initially caused by a tax hike in electronics as a means to collect more revenue, yet the basis for this is down to Mugabe’s monetary policies. Left without any major investment, the new Zanu-PF party is scrambling for foreign investment; “Zimbabwe very much needs to access multilateral funding for its debt and if that doesn’t happen we will be in crisis,” states Mutodi, a deputy foreign minister (Guardian, 2018). There has been a hike in food and medicine prices, school fees, as well as outbreaks of infectious diseases such as cholera. However, despite the clear need for aid, some recognise that pumping more aid into the economy might not be the smartest thing to do. Biti, former finance minister states “You can’t reform without reformers. We need a paradigm shift from predatory to inclusive politics. You can give this country billions of dollars, but you won’t have resolved anything. All you will have done is entrench the regime.” (Guardian, 2018).
No other statement can sum up the argument better.
Burke, J. (2018). Zimbabwe’s economic crisis will deepen without aid, ruling party warns.
Available at: https://www.theguardian.com/world/2018/oct/19/zimbabwe-needs-aid-to-prevent-further-crisis-warns-ruling-party(Accessed on 13th December)
Zhuwarara, R. (2014). Western dependency: The black-man’s burden – part one. Available at: https://www.thepatriot.co.zw/old_posts/western-dependency-the-black-mans-burden-part-one/(Accessed on 14th December)
University of Delaware. (1999) Politics ofDeveloping Nations, Dependency Theory. Available at: https://udel.edu/~jdeiner/depend.html(Accessed on: 14th December 2015)
Swanson, A. (2015). Does foreign aid always helpthe poor? Available at: https://www.weforum.org/agenda/2015/10/does-foreign-aid-always-help-the-poor/(Accessed on 14th December 2018)