Foreigh Aid Essay

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The main essence of writing this assay is an attempt to define foreign aid, discuss the different types of Foreign aid and explain the advantages and disadvantages of foreign aid in the development process of countries such as those in Africa. According to Todaro (2003:114) defines Foreign Aid “as simply the material, technical and monetary assistance rendered from one country to another country. It is the international transfer of capital, goods and services from one country or international organization for the benefit of the recipient country or its population”. In other words Foreign aid refers to transfer of real resources from governments or public institutions of the richer countries to governments of less developed countries (LDCs) in the third world for example, Britain give resources and experts to build a university in Zambia. However, aid can be economic, military and humanitarian emergency for example aid that is given because of natural disaster such as floods, droughts, crops and animal diseases and earth quakes. The flows of foreign resources can be of many types and it is important to know the different elements. Foreign capital flows are generally divided into two broad streams – official and private. The official capital flows are in turn subdivided into bilateral and multilateral flows. Bilateral means two sides. This type of aid is normally between two countries the developed and less developed one for example, Japan send money to Zambia and sending experts to build schools and Hospitals. Official bilateral flows consist of capital provided by government of donor to government of recipient countries (Gupta and Islam1983). Multilateral means many supporters. Multilateral flows consist of capital flows from multilateral organizations such as the World Bank, the United Nations,

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