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POLS ASSIGNMENT Paper

Words: 1651, Paragraphs: 21, Pages: 6

Paper type: Assignment , Subject: Africa

centercenterPOLITICS 206

THE POLITICAL AND ECONOMIC CONSEQUENCES OF FOREIGN TRADE FOR AFRICA’S DEVELOPMENT

NAME : MANDISA MINENHLE MLITWA

STUDENT NO :218065513

LECTURER : FIKILE

DUE DATE :30 AUGUST 2019

8820090900POLITICS 206

THE POLITICAL AND ECONOMIC CONSEQUENCES OF FOREIGN TRADE FOR AFRICA’S DEVELOPMENT

NAME : MANDISA MINENHLE MLITWA

STUDENT NO :218065513

LECTURER : FIKILE

DUE DATE :30 AUGUST 2019

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Foreign aid is usually associated with developmental assistance and this is normally targeted to developing or poor countries around the globe. The dictionary definition of the term foreign aid is, the administered transfer of resources from the advanced countries for the purpose of encouraging economic growth in developing countries (Bannock, 1998). There many types of foreign aids around the world, there is bilateral aid, multilateral aid, tied aid, project aid, military aid and many others.

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Beginning with bilateral aid, basically bilateral aid is the help that the government of one country gives directly to the government of another country. Multilateral aid on the other hand is assistance that is given by the governments to international organisations, organisations such as the United Nations, the World Bank and International Monetary Fund (Bannock, 1998). Tied aid is what one would call ‘specific assistance’, that aid must be spent in the country specifically providing the aid, for example, a country that is developed will provide assistance to a developing country but the catch is that the money must be spent on goods and services that are produced in the selected country. Then there is project aid, it is aid that is given for a specific purpose for example building material would be aided to a country for building a school or hospital. Military aid is aid provided to other country to help with their defence efforts or help it to keep control over their land. (Bannock. 1998)

POLITICAL CONSEQUENCES OF FOREIGN AID FOR AFRICA’S DEVELOPMENT

When research is conducted and a look is taken at the statistics of foreign aid budget in African countries such as Angola and Nigeria, the level of progression made is extremely low compared to the amount of money that these countries receive yearly. The African continent itself as a whole receives about fifty billion dollars of international assistance every year (Lucas, R. 1998), but instead of seeing drastic improvement in the locals’ living conditions of their six hundred million people who live way below the line of poverty, the rich keep getting richer and the poor get poorer. That process on its own tires the economic growth and breeds the vicious cycle of corruption.

While on the subject of corruption, foreign aid itself has done a good job of strengthening corruption where it is already widespread. This unfortunately, is the case for all the countries that make up the African continent. The countries who are the largest recipients of aid are in Africa, which by the way happens to be where the world’s lowest ranked countries in many areas of governance are (Mbaku, J. 2004), especially in the terms of corruption. This reveals that foreign aid just simply reinforces the amount of resources available to already corrupt specific elite group of people (Mbaku, J. 2004)). This just keeps adding and keeping power in the hands of the higher branch of the government. There is an obvious relationship between the increased aid and the sufficient increase in corruption. All of this means that the money that is received from the selected country is not distributed in an even manner among the population, it is not used to promote growth in that country nor is it used to help the poor. Instead, all of this money is used to achieve policies within a short period of time, for example, the size of government would be increased with servants who don’t really contribute to anything in the system or improve development but only cuts down the unemployment rate.

Dependence is also another consequence of foreign aid, when countries are aided, they are given money to med whatever it is that is broken in that country, it can be to decrease poverty, unemployment rates, hunger, and maybe increase the level of education. All of these aids mainly come in a from of huge sums of money, sometimes it can be project aid but mainly it is usually money because it is not always schools that are needed or hospitals or malls etc. Now, with all these huge sums of money coming in these countries eventually get used to this leisure of getting all these huge amounts money and this comes to a point where they don’t think it is necessary to promote local businesses. Why have businesses when you can get free money? This creates a lack of independence in the country and causes a sense of expecting everything to be done for them. All this dependence prevents any form of improvement that can be made and there can no longer be a per capita income.

Despite all the negativity there is tons of evidence that foreign aid has successfully supported economic development to the point where countries successfully emerge from aid dependency. In the eighties the proportion of the Indonesian government expenditure financed by aid exceeded seventy percent, this reached eighty one percent in 1998 and declined steeply downward (Lucas, R. 1998). The share of Aid in Ethiopia was pretty high, the per capita aid receipt is still below the African average, but the good news is that their economic growth is one of the fastest in the world. Some African countries have avoided long term dependency with a policy of expanding domestic resources mobilization and attracting foreign investment so as to grow their economy (Lucas, R. 1998). Rwanda, Mozambique and Ethiopia have all used aid relatively to expand their economies and to help the government policy direct aid more effectively.

POLITICAL CONSEQUENCES OF FOREIGN AID FOR AFRICA’S DEVELOPMENT

After all the consequences brought upon Africa by foreign Aid, why do other countries still help? They say they cannot see where the money is going so why do they still bother, because at the end of the day everything is about politics and image. You can’t refuse a country coming to you for help, what will other countries think? Will they ever help you if you refuse to help others? So, the question remains, why do other countries continue to assist Africa even though they don’t see much improvement? When one country helps another country it automatically makes the politician look like they care for each other, that they look out for each other, basically it puts out a good image. The political strategic interests of the donors dictate the aid giving process more than concerns of good governance in the recipient nations (Hansen, H and Tarp, F. 2000). With Africa being the largest recipient for foreign aid, what does that say about the African governance? This says that African countries look like a helpless civilization led by corrupt kleptomaniac elites. Being the largest recipient of foreign aid shows that Africa doesn’t have a strong government and no control over their financial goals.

When Aid is given to a developing nation for political purposes there is a possibility of having harmful consequences. The wellbeing of the recipients is not of premium concern, the interests of the less developed country become secondary to those of the benefactor (Mbaku, J. 2004). Everyone knows it’s never a good thing to borrow money when you are extremely desperate because one tends to agree with all the terms and conditions without thinking twice. When desperate for money, some countries may find themselves in a difficult position because the accepted the explicit and implicit terms of the agreement at the time of desperateness. Beijing from China was accused of taking over Zambia’s national electricity supplier and rebuilding the Magadishu Sea Port in exchange exclusive fishing rights in the Somalia coast (Froze, Q. 2017). African states have been cautioned not to take loans from Chinese because there is always strings attached, but then, this is Africa after all.

In the past they considered colonisation the best way to go about dealing with a problem. Africa and some parts of southeast Asia were ruled by the international government. When foreign aid was discovered people got a chance to enjoy more freedom than before. Even though the effects of colonisation being removed were dictators and despots showing up from all over the world people were much more happier now they got to have a say in matters concerning them. People got to have a say in the outcome of their lives and foreign aid gave them that, foreign aid made that possible for them. And this is not something that applies only to Africa but a lot of other continents as well. Foreign has made a huge economic difference both good and bad in the development of countries and cities.

With all that has been said, it has come to a conclusion that suggests that the capabilities of a citizen of not only a country but those of the continent as well need to be created, citizens need to become the creators of their own wealth and enterprise so that they can be able to live off their own activities(Islam, A. 1992). A complete policy and a decent economic management matters more than foreign aid when developing a country (Islam, A. 1992), a stable and strong institution would avoid foreign from becoming an evil curse they can’t handle. More time should be spent improving governance before considering finance assistance because when there is no strong government then best forget fulfilling the desire goal when it comes to financial assistance.

REFERENCE PAGE

Bannock, G. 1998. Aid, savings and growth revisited. Oxford bulletin of economics and statistics. 42(2): 79-95

Hansen, H and Tarp, F. 2000, aid effectiveness disputed. Journal of international development, 12: 375-398

Islam, A. 1992. Foreign aid and economic growth, an empirical study of Bangladesh. Applied economics, 24(5): 541-544

Lucas, R. 1998. The mechanics of economic development. Journal of monetary economics, 22(1): 3-42

Mbaku, J, 2004. Institution and development in African. Penguin, westside.

About the author

This sample is done by Scarlett with a major in Economics at Northwestern University. All the content of this paper reflects her knowledge and her perspective on POLS ASSIGNMENT and should not be considered as the only possible point of view or way of presenting the arguments.

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