.. ernments spend money. Economies are also worsening because assistance is spent on consumption and expanding the government rather than investing it or benefiting the poor. In other words, money is consumed rather than used wisely because it is often stolen by the corrupt elite ruling classes of the developing countries and used for personal uses. A prime example of this includes Zaire and its infamous ruler Mobutu Sese Seko.
Estimates suggest that Sese Seko stole over 4 billion dollars of foreign aid over a 24-year period from 1970-1994. This 4 billion accounted for over of all aid given to the country during that time. However, during the twenty-four year period, the IMF continued to offer assistance and monetary aid despite knowledge of Mobutu?s corruption. To make things worse, Zaire?s economy was 40% less productive after Mobuto left than when before he came to power. Similar economy drop-offs occurred throughout Latin America, Asia, Africa, and the Middle East during this time period as well.
With that in mind, it makes you think twice about the usefulness of foreign assistance. In addition, aid often times, as it did in the Philippines, postpone the urgency to reform by switching the focus from finding ways to implement plans promptly to looking at ways to obtain more aid. When countries receive free money with no direct orders how to use it, it is very difficult to insure that it will be used properly especially when the leaders know that more aid will continue to flow each year. This therefore encourages the country to maintain sub par levels of economic standing year after year in order to remain eligible for financial aid. On a different note, by analyzing the military budgets of all developing nations, it is clear that countries of the south spend anywhere from 3-15 times more of their resources on national defense.
Education and health care as a result get pushed to the back burner, and because of this, literacy rates, citizen health, and life expectancies are lower than the rest of the developed world, and continue to stay below national levels. Even when money is spent on education, for example, the money is not spent equally on all people. It is usually the richer and/or more educated who receive aid first, thus belittling the whole aid effort. For example, in Sub-Saharan Africa during the 1980?s, about 600 times more money was spent on the higher education than on primary education, thus obviously favoring the already literate to succeed. The key to reforming agencies like AID, who even admit that their organization?s performance is ?on the road to mediocrity or worse? , lies in finding a way to control the direction of monetary aid once lent to the government.
Direct government lending creates dependence of those receiving countries on the lender, encourages corruption, and leaves spending up to the corrupt elite, further worsening the situation for the welfare of the citizens. If northern countries were given the right to direct all cash flow once inside the country, we would see a definite improvement in the economies and health of the people in all southern countries. It was the belief of the Clinton administration during his term that assistance prevented social collapse. The President also once remarked that ?every dollar we devote to preventing conflicts?.brings a sure return in security and savings.? However, was it really worth the millions of dollars to interfere in the conflict in Rwanda and Somalia when no immediate threat to the US existed? Who put the US in charge of taking part in the domestic affairs of other sovereign nations anyway? Foreign aid and assistance is fine as long as it is distributed properly. However, direct intervention is not.
One quarter of the United State?s foreign assistance budget last year went towards the funding of military operations and interventions. But why pay money to fund military operations when the money could be used more wisely to help save the lives of thousands instead? The idea of social disorder within a country is difficult to predict, and a majority of the countries that have disintegrated due to instability received small amounts of aid from the north. Therefore this furthers the idea that money is often times misused. Impact of Foreign Aid Another point to make is that aid is not distributed based on need, but rather on wealth. For example, countries like Russia, Israel, and India receive more aid each year than many other poorer countries like Somalia, Kenya, or Mali, which in turn means that aid is not reaching the most destitute. Unfortunately, this also implies that foreign investors care more about their personal gain than for the betterment of the lives of those they govern.
In fact, many times countries will offer aid but will only allow the money to be spent within that country, thus helping to improve the economy of the lender. Moreover, statistical data confirm that foreign investors prefer to invest in countries with higher wages, and higher wages for the most part imply wealthier countries. This may seem odd at first, but it makes sense if you look at the reasons why. Wealthier countries are more productive, stable, and offer a more educated workforce from which foreign investors have more to gain from. All of these examples together support the notion that aid is not always as useful as it could be and that lender?s should find more appropriate means for distributing resources before increasing foreign assistance budgets. In conclusion, if only there was a way to prevent the misuse of funds by finding ways to control the use of money, increase support at the United Nations for US policies, and distribute aid according to need, then the increase of foreign aid would be acceptable.
However, until that point, any increase in foreign aid is nothing more than a waste of money into the hands of the corrupt and a method to destroy the countries in which money is flowing into. Government Essays.