However, as that is rather an exception than a rule, in this essay I will look at the cons of foreign aid claiming that it is actually not fulfilling it’s purpose. The reasons behind giving aid are simple and somewhat naive. Countries that are better off feel morally obliged to help poorer countries in need. It is believed that aid will improve people’s lives and will reduce poverty. However noble the cause, generous contributions without thorough analysis do not always lead to good outcomes.
Subsistence aid: it is given by the developed counties to those which do not possess sufficient resources to maintain their territories . For example US supports to Jordan 3. Bribes and pension aid: it is prevalent in the 19th century.under this aid the governments paid a pension or bribe to the foreign minister or ambassador for the services rendered to them. 4. Military aid: it covers not only giving the weapons but also the sale of military goods at lowest rates.
Foreign aid is also used to address transnational problems such as the production and export of illegal drugs and the battle against HIV/AIDS. 1988 make foreign aid and access to U.S. markets conditional upon recipient countries’ actively combatting drug production and trafficking. Why foreign aid and ODA fail to overcome poverty and the impacts on recipients Foreign aid and development assistance are often regarded as being too much, or wasted on corrupt recipient governments despite any good intentions from donor countries. In reality, both the quantity and quality of aid have been poor and donor nations have not been held to account. There are numerous forms of aid, from humanitarian emergency assistance, to food aid, military assistance and many more.
There are those who argue that foreign aid is necessary to get people out of their poverty trap as it assists them to initiate a virtuous circle that will help them to invest in critical areas. On the other hand, there are those who believe that foreign aid is wrong. Their argument is that foreign aid only gives a comforting feeling to the poor that someone is taking care of them, but the aid will not reduce their poverty. It prevents them from searching for their own solutions and might corrupt or undermine existing local authorities. This argument follows that the best option for poor countries is the idea that people can find ways to solve their problems if the markets are free and the incentives are right.
Aid is beneficial only to a small number of people, the 'selected people '. These selected people use this aid money on consumption rather than savings. The decrease in savings lead to a smaller amount of investment, and small level of investment leads to fewer money banks can offer for loans. It has been proven in several economic studies that there is a correlation between increase in aid and decrease in domestic saving level. Furthermore, aid induces a devastating crowding-out effect, where an increase in government expenditures leads to a decrease in private investments.
Kenya has a lot of unutilized opportunities and resources. Kenya has a population of 40% underage the bigger number of this percentage is below 15. One of the great resources Kenya is blessed with great human power and great soil for agriculture, if this is utilized to the maximum it will be a great stepping stone towards eradication of poverty. The only challenge is water systems. There is need to have advanced means of farming with use of minimal water.
While talking about life expectancy is a main significant part. The life expectancy for females is around 74 years old and for males its 70 years old, that’s on average, whereas in Kenya the life expectancy is rather low, it’s 45 for males and females. This is mainly because of the two diseases in Kenya, malaria, and H.I.V but the starvation and dehydration play a big part too. There is about 30 year’s difference which is quite a great deal. The birth rate in china is around 13 per 1000 and is slowly decreasing.
The literature on foreign aid suggests that this phenomenon is usually considered from two different perspectives. First, foreign aid is a policy tool to influence the behavior of receiving state and promote national interests. Second, foreign aid is a tool to promote global prosperity and development. To address these different motives for foreign aid, I look at aid-for-policy deals developed by Bueno de Mesquita and Smith (2007, 2009) and aid for development purposes (Lumsdaine 1993, Noel and Therien 1995). Moreover, there is an expanding literature saying that both of concerns are true for aid allocation and cannot be mutually exclusive (Heinrich 2012).
Din and Haider(2013) studied the impact of aid on the economic growth of the country. Ramsey Cass Koopman's growth model has been used. Results show that foreign aid has a positive impact on the economy but good governance plays an important role but external debt has a negative role and and is the reason for creating burden on the country Alan(2013) studied the impact of foreign aid on the economic growth of the country. Secondary data has been used where as government spending on education is the independent variable. Results conclude that the lack of management, poor planning and corruption are the reasons because of which aid is not being used
There is a decline in the quality of education in Kenya and Ghana, linked to pupil–teacher ratios, ‘the quality of instruction’, favouritism in awarding bursaries and poor infrastructure. In South Africa it is clear that young graduates are unable to find employment while most of them drop-out of universities because of lack of funding. How We Made It In Africa