Definition of foreign aid

What is foreign aid?

The term foreign aid refers to any type of aid that a country voluntarily transfers to another, which may take the form of a donation, to agree, or ready. Most people tend to think of foreign aid as Capital city, but it can also include food, supplies and services such as humanitarian aid and military assistance.

Broader definitions of aid include any aid transferred across borders by religious organizations, non-governmental organizations (NGOs) and foundations. US foreign aid generally refers to the military and economic aid provided by the federal government to other countries.

Key points to remember

  • Foreign aid is any type of aid that one country voluntarily transfers to another, which may take the form of a grant, grant or loan.
  • Countries can provide aid in the form of capital, food, supplies and services such as humanitarian aid and military assistance.
  • Developed countries can provide developing countries with foreign aid after natural disasters, times of conflict or during an economic crisis.
  • The United Nations demands that advanced countries spend at least 0.7% of their gross national income on international aid.
  • The United States is the most generous, according to the Organization for Economic Co-operation and Development.

Understanding foreign aid

As noted above, foreign aid is any type of assistance that the government of one country provides to another country, usually from developed countries to developing countries. Governments can grant aid in the form of:

  • Money
  • Food and supplies
  • Medical assistance, including doctors and supplies
  • Humanitarian aid such as aid workers
  • Training services, including agricultural training
  • Health care
  • Education
  • Help to Infrastructure building
  • Peacebuilding activities

Governments can enter into agreements with countries to which they provide assistance. For example, a developed country may agree to provide grants to those who need them after a natural disaster or in times of conflict, whether they provide any kind of capital or humanitarian aid. Or a government may agree to provide loans to an allied country experiencing economic uncertainty with refund provisions.

Worried about where foreign aid is going? Only a small portion of US aid goes to federal governments, while the rest goes to nonprofits, NGOs, and other organizations.

According to Organisation for Economic Co-operation and Development (OECD), member countries contributed $ 152.8 billion in international aid in 2019.This was divided into:

  • $ 149.4 billion in grants and capital loans
  • $ 1.9 billion to be developed private sector growth vehicles
  • $ 1.4 billion in loans and equity to private companies
  • $ 100 million in debt relief

The United States is the most generous, according to the OECD, providing $ 34.6 billion in foreign aid in 2019. The remaining countries that were among the top five donors were:

  • Germany: $ 23.8 billion
  • United Kingdom: $ 19.4 billion
  • Japan: $ 15.5 billion
  • France: $ 12.2 billion

The The United Nations (UN) calls on economically advanced countries to spend at least 0.7% of their gross national income (GNI) on international aid.Turkey, Denmark, Luxembourg, Norway, Sweden and the United Kingdom are the only countries that have reached or exceeded this level. The total contribution of member countries, however, averaged 0.3%, well below the UN target.

ODA as a percentage of gross national income

According to Security Assistance Monitor, the Middle East and North Africa region received the most aid, which amounted to more than $ 1.195 billion in 2018, followed by the sub-Saharan Africa region, which received about $ 965 million. The countries that received the most aid that year were Afghanistan, Jordan, Kenya, Tanzania and Uganda.

Net official development assistance by country

Special considerations

Foreign aid estimates tend to vary, given the different agencies, funding methods, and categories of aid associated with US foreign aid efforts. For example, the Congressional Research Service (CRS) – a non-partisan organization – the country spent $ 46.89 billion in foreign aid in fiscal 2018. This figure was 1% of the budget authorization. total federal.

Assistance can be provided by governments directly or through special federal agencies. For example, the United States Agency for International Development (USAID) was established in 1961 to provide civilian aid. It provides assistance in the areas of education, environment, climate change, global health, crises and conflicts, food and agriculture, water and human rights. the man.

History of foreign aid

Foreign aid, also commonly referred to as international aid and economic aid, is not a new concept. The colonies benefited from foreign military aid, particularly from France, during the the american revolution. During World War I, the US government loaned the Belgian Relief Committee $ 387 million, much of which it later forgave.

American foreign aid began in earnest during World War II. Prior to entering the war, the government began channeling funds and materiel to Allied nations under the Lend-Lease Program, which amounted to $ 50.1 billion in August 1945. The United States United also contributed $ 2.7 billion through the United Nations Relief and Rehabilitation Administration (UNRRA), beginning in late 1943.

During the four years since 1948, the United States gave $ 13 billion in aid to war-affected countries such as the United Kingdom, France and West Germany through the Marshall Plan. The Mutual Security Act of 1951 authorized about $ 7.5 billion in foreign aid per year until 1961. The amount of aid authorized by the Mutual Security Act in 1951 was about 2.2% of the total. gross domestic product (GDP).

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