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Is foreign aid actually beneficial to economic development?
Transcript of Is foreign aid actually beneficial to economic development?
Help to help
Between Aid and Development
The aim with Economic Development, is it wealth?
Ethical, Sociological, Environmental or other views?
An economic model - Want an economic result
Altruism, or giving aid to exploit?
Who created the measurements?
No “best practice”
"In 1990, approximately 43 percent of the world’s population was living on less than $1.25 a day and that has dropped to about 16 percent in 2008"
Beneficial? Yes and No!
By: Adam Ekström,
human capital, infrastructure, competitiveness, health, safety, literacy rates, life expectancy, living standards, poverty
life sustaining goods and services
social and economist choices
Development vs. Growth
social and economic development
criticism -> IHDI (2010)
1. Norway 0.955
2. Australia 0.938
4. Netherlands 0.921
5. Germany 0.920
7. Ireland 0.916
8. Sweden 0.916
9. Switzerland 0.913
11. Canada 0.911
14. Iceland 0.906
15. Denmark 0.901
16. Israel 0.900
17. Belgium 0.897
18. Austria 0.895
20. France 0.893
23. Spain 0.885
25. Italy 0.881
HDI and IHDI ranking 2013
1. Norway 0.894
2. Australia 0.864
3. Sweden 0.859
4. Netherlands 0.857
5. Germany 0.856
6. Ireland 0.850
7. Switzerland 0.849
8. Iceland 0.848
9. Denmark 0.845
12. Austria 0.837
13. Canada 0.832
15. Belgium 0.825
18. France 0.812
20. Spain 0.796
21. Israel 0.790
24. Italy 0.776
6 main approaches
redistributive strategies of development
Evaluation based on resource utilization, level of income; savings, investment and growth; human capital formation; poverty and inequality; the role of the state; and participation, democracy and freedom
aid given by a government (donor) directly to the government of another country (recipient)
aid given by certain financial institutions, agencies or organisations to the government or organisations of developing countries
Short term aid
Long term aid
Foreign Direct Investment (FDI)
Donors economic policies
first country to become a donor (2009) after receiving foreign aid
1946 - 1978 $60 billion from US
developed globally successful companies
new approach concerning corruption
Questions & Answers
Thank you for listening!
Now its time for
“Afghanistan in many ways is sort of a perfect case study of how not to give aid”
about 100 billion $ in non-military funds by the US
low income per capita, bad HDI ranking, corruption
http://www.fas.org/asmp/profiles/aid/aidindex.htm Federation of American Scientists
World Vision 2007 - ABN 28 004 778 081 Ref#5120
Official Development Assistance (ODA) in recipient countries in 2012
Source: OECD, Feb. 2014
In 2012 net ODA was USD 127 billion.
e.g. survey 2013 by the Development Initiatives in Bristol: 22 billion US $ of the 100 billion $ reported weren't transferred
The wrong countries receive the aid
When broken down by region since 1970 the poorest countries have received just a quarter of all DAC aid.
Source: SciVerse ScienceDirect Journals
Is Part Of: World Development, 2011, Vol.39(11), pp.1918-1929 [Peer Reviewed Journal]
Author: Ghosh, Anirban ; Kharas, Homi
Our own merged definition:
"Economic, technical or military assistance given from one nation to another for the purpose of post-war rehabilitation, promote economic development, strengthen military defence or serve in catastrophic situations."
Provide a better situation for people in need
Need to see it in a new way
Increase human rights
Promotes environmental work
To many different organisations make it inefficient