Why is aid not the answer to world development

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Why is aid not the answer to world development?
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Definition of Aid

• Act or result of helping assistance
• Aid is money, equipment, or services provided for
  people in need

Food aid delivery by WFP to the people of
Afghanistan
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Foreign Aid

• The U.S. government has provided over 321
  billion in assistance to Third World poverty
• Politically popular since it will increase trade
  and national security
• Economic and social failure
• Increasing government power, destroying economic
  encouragement, subsidizing misguided policies,
  promoting unprofitable enterprises, foreign aid
  increases Third World poverty.

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Human Assistance

• Aid designed to prevent immediate disaster
  mainly takes the form of food aid.
• The United States has distributed over 34
  billion worth of food to the Third World and
  currently provides around 1.2 bullion a year in
  food transfers.
• Food Aid has increased hunger abroad in the long
  run.

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Problem with food aid

• Food aid is a free source of food for the people
  but this means the country will decrease the
  prices for local farmers, therefore resulting in
  less domestic production.
• Food aid also discourage food production since
  the country will be too dependent creating a
  never ending crisis that requires more aid to
  avoid famine.
• Example Due to the poverty in India the
  Americans have provided food aid (wheat) for
  India, but the result have caused thousands of
  Indian farmers to be bankrupted causing millions
  of Indians to die due to starvation.

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Development Aid

• Development aid tries to promote long-run growth
  by building large projects, giving money and
  balance of payments help, and funding a variety
  of research and planning efforts.
• Since 1946 the United States has given over 131
  bullion in development assistance.
• Third World countries do not grow because they
  lack financial resources but also depends on
  personal, cultural, social and political factors.

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Conclusion

• Foreign aid fails as a development because it
  destroys the encouragement of the marketplace.
  Because it leads the Third World away from the
  free market, it actually increases Third World
  poverty.
• It is therefore vital to find another way to
  development of the Third World country. (Fair
  Trade)