4.2 Discuss the types of aid available in the world
GENESIS OF AID
Aid existed in ancient times. The trend and amounts have increased tremendously during the twentieth century especially after the Second World War occasionally consisting of humanitarian crisis relief. It was modeled on the Marshall plan which had been successfully used in the reconstruction of Europe after the war. Especially in the 1960s following independence of most countries of Africa, aid was seen as the only way to trigger higher investments which would in turn lead to higher economic growth. Soon, however, western powers began to put conditionality aid. Donors imposed rules and regulations to govern conditions under which aid is disbursed. The focus of aid in Africa has therefore been characterized by the shifting needs of the donors. Some transfers that would now be counted as aid, however, came under the purview of colonial office budgets. It was at the end of World War Two, in the contexts of European reconstruction, decolonisation, and cold war rivalry for influence in the third world, that aid became the major activity that it is today. Countries receiving the aid may free some of the resources that were intended for a particular purpose to help in improving another area. A government may receive food aid so that the money they could have used in purchasing food could be used for military improvement. This may not be articulated when the aid is being release but is a hidden aspect.
The following phases shows the shifting focus of aid in Africa through the years. To start with, soon after independence both France and Britain used aid as a tool of holding their former colonies in Africa. This was followed by the United States of America using aid as a tool of fighting the cold war
In the 1960s most aid was given to build infrastructure especially roads and railways.In the 1970s the focus shifted to eliminating poverty. The emphasis now changed from infrastructure to agriculture and rural development.In the 1980s, the structural adjustment policies became the major focus. African countries were required to embrace free market economy by removing price controls and monopolies.In the 1990s to date the emphasis has shifted to good governance. This is seen as the key to economic growth.
Sources and distribution
Bilateral Aid is given by the government of one country directly to another. Many dedicated governmental aid agencies dispense bilateral aid, for example DANIDA and USAID as governmental aid agencies do give aid to recipient country. Multilateral aid is given from the government of a country to an international agency, such as the World Bank, the International Monitory Fund or the European Development Fund. The contributing countries usually govern these organizations that involve the wealthiest countries in the world. The organizations are used by the donor countries to further their course by instituting stringent measures that ensure that their interest are catered. This has brought criticism by the third world countries that feel that the developed countries have brought a new form of oppression.
Donations from private individuals and for-profit companies are another significant type of aid. The practice of giving such donations, especially on the part of wealthy individuals, is known as philanthropy. This is done through foundations started by the multinational companies and they provide aid in particular areas of their interest.
Non Governmental Organisations play a major role in distributing aid. They include include Action Aid, Oxfam and the Mercy corps. Many non-profit charitable organizations solicit donations from the public to support their work; charitable foundations often oversee an endowment which they invest and use the proceeds to support aid organizations and other causes. Aid organizations may provide both humanitarian and development aid, or specialize in one or the other. A number of aid NGOs has an affiliation with a religious denomination. They conduct their own international operations – distributing food and water, building pipelines and homes, teaching, providing health care, lending money, etc. Some government aid agencies also conduct direct operations, but there are also many contracts with or grants to NGOs who actually provide the desired aid.
Scholarships to foreign students, whether from a government or a private school or university, might also be considered a type of development aid.
Types of AID
Aid is often pledged at one point in time, but disbursements (financial transfers) might not arrive until later. Aid may be provided in the form of financial grants or loans, or in the form of materials, labor, or expertise.
Humanitarian aid or emergency aid involves rapid assistance given to people in immediate distress by individuals, organizations, or governments to relieve suffering, during and after man- made emergencies like war and natural disasters like famine, floods, earthquakes. It focuses on relieving suffering caused by natural disaster or conflict, rather than removing the root causes of poverty or vulnerability.The provision of humanitarian response consists of the provision of vital services such as providing food, water and medicine by aid agencies, and the provision of funding or in-kind services like logistics or transport, usually through aid agencies or the government of the affected country. State-supported actors distinguish humanitarian aid from humanitarian intervention that involves armed forces protecting civilians from violent oppression or genocide.
Development aid is given by industrialized countries to support development in general, which can be economic development or social development in third world countries. It is aimed at alleviating poverty in the long term, rather than alleviating suffering in the short term.
Development aid is often used to refer specifically to Official Development Assistance (ODA), which is aid given by governments on certain concessional terms, usually as simple donations. It is given by governments through individual countries’ International Aid agencies and through multilateral institutions such as the World Bank and by individuals through development charities such as Action aid; Caritas, Care International or Oxfam. The offer to give development aid has to be understood in the context of the Cold war.
Other Specific types of aid include:
- Project aid: Aid is given for a specific purpose e.g. building materials for a new school.
- Programme aid: Aid is given for a specific sector e.g. funding of the education sector of a country.
- Budget support: A form of Programme Aid that is directly channelled into the financial system of the recipient country.
- Sector wide Approaches (SWAPs): A combination of Project aid and Programme aid/Budget Support e.g. support for the education sector in a country will include both funding of education projects (like school buildings) and provide funds to maintain them (like school books).
- Food aid is given to countries in urgent need of food supplies, especially if they have just experienced a natural disaster like famine, floods, and earthquakes.
- Untied Aid: The country receiving the aid can spend the money as they chose.
- The Tied aid must be used to purchase products from the country that donated it or a specified group of countries.
- Educated personnel, such as doctors, provide technical assistance. They are moved into developing countries to assist with programs of development. They can be both programme and project aid.