Sadam Hussain
Foreign aid, traces its origin back to the19th century, has greatly contributed to supporting lower income countries, countries hit by natural disasters, wars, and those which get colonised. In fact, foreign aid has greatly contributed to elevating small income countries with lower economic growth, but it has also brought significant effects to countries which were affected by wars and colonisation . As a result, these countries are still dependent on foreign aid and loans, which has been trapping them for decades.
When we look to advantages of foreign aid, we think of it as a major support for survival of a country. Foreign aid helps to achieve economic stability and growth; it also strengthens external and internal security, not only in times of war but also during climate-related disasters and economic imbalance. For instance, Europe’s helped to build post-war societies after World War II, which worked as a great opportunity for societies hit by ravages of war.
According to United Nations Sustainable Development Goal, aid and financial cooperation are vital tools for building economic growth and reducing poverty. Aid works as a pillar for countries with economic deficits and balance crisis. Historically, all those countries which have experienced wars and colonization rushed to the powerful countries to gain shelter by drawing loans from the donor governments. Similarly, after partition, Pakistan, shaped by historical conflicts and opponents, also rushed to gain help from the IMF. It proves how aid has become the only source to support vulnerable countries in the face of disasters. When small countries like Ukraine are pushed into wars, they often ask for help from allies to help them in rebuilding damages and providing weapons. For instance , Ukraine is currently gaining aid from the European Union to remain stable in the face of devastation wrecked by Russia. This is how aid helps continue not only economic growth but also remain durable in times of wars by continuing exchange attacks and fuelling more and more damage. Foreign aid brings improvements to different domains such as education, internal and external security, infant mortality, and construction projects. Building schools and universities, hospitals and transportation systems, have greatly improved the lives of the general population. These basic necessities are of the core aims of foreign aid which are needed by civilians of any country. Working on these projects is like working on improving the life millions of people to bring them stability and growth.
And when it comes to seeing negative implications of foreign aid, we find countries receiving foreign aid are entang into continuous instability; their governments are less democratic and more hybrid; their debt often exceeds their revenues; as a result, they become entangled in constant debt and import and export imbalances, for instance, Pakistan. One of the most haunting effect of aid is that it is used as a leverage by countries like the US. for their benefits in times of need like war situation to use airbases, etc. Aid may, however, also influence and decide governments in recipient countries, ultimately falling their democracies and governments.
One of the major implications of foreign aid and loan is: to cause corruption in countries, where elites gain edge, while others are denied and delayed. As a result, vicious cycle of dependency over debt continues to harm the lives of hundreds of thousands of people at the expense of elites and their interests. According to professor Deaton, an expert on global poverty and aid, argues that traditional foreign aid often does more harm than good by weakening local governance, and failing to foster sustainable growth in developing countries. This proves when we see modern developing countries like Pakistan which have fallen into this trap by gaining a short-term relief at the expense of long-term instability. For instance, Africa, in the 1970s, despite receiving high aid flow, saw asharp increase in poverty. This proves that countries continue to face instability even after receiving huge amounts in aid.
After all, in order to escape this vicious cycle of dependency, rather than looking abroad for donor governments, countries should establish a democratic environment and better economic policies at home that would help countries maintain their stability, and economic growth. Additionally, increasing and investing in human capital can help countries grow rich, because countries with rich human capital do not look for aid; instead, they become innovative by working on human capital than wasting money in building infrastructure and government premises alone. Above all, Countries should lessen their dependency on external capital and invest in modern innovation. For instance, technically advanced countries like Germany, France and the US are less dependent on aid. This is how countries can lay the foundation for a better future and governance, where human capital remains the first and foremost concern for a state.
In a nutshell, in this century, everything is being weaponized whether it is aid or resources; therefore, powerful countries always want their leverage over other countries, trapping them in vicious cycle of debt and dependency. Thus countries with lower economic growth should focus on innovation and human development than getting aid from donor governments and involving themselves under a constant debt for generations to come.
—The writer is a contributing columnist, based in Ghotki, Sindh
