Foreign aid and poverty in developed countries

Photo: The Spectator

Foreign aid has undoubtedly made an impact on the lives of many people in developing nations. It continues to address social issues and to some extend the economic issues that are obstacles towards developmental progress and making the world a safer and better place for everyone.

However, over the past few years, there has been a continued debate about the need for continued foreign aid due to the following reasons: rampant corruption by some governments of recipient countries; and skewed priorities of government spending on frivolous and self-gratification projects, while poverty, housing backlog and unemployment is on the increase.

After all, the provision of housing, education and health services should be the role of every government.

 The issue has been widely discussed, especially since 2009 when economist, Dambisa Moyo, released her best-selling book titled, ‘Dead Aid: Why Aid is not working and how there is another way for Africa’.  

The debate was recently brought to the fore after the President of the United States of America, Donald Trump pledged to cut his country’s international foreign aid budget and put ‘America First’.

Proponents of foreign aid have criticized his move arguing that it would make the world a dangerous place as foreign aid improves international security and good diplomacy amongst countries. They further argue that the cut was unnecessary as the US only spends less than 1% of its gross domestic product (GDP) on foreign aid. The US spends US$30 billion a year on foreign aid. Other developed countries also spend less than 1% of their GDP per year with the UK spending roughly US$15 billion per year.

Although the amount seems insignificant in percentages, the actual figures is extremely high, not to mention that the figures do not even include donations from private citizens and corporations. 

It seems unfair for developed countries to spend so much money trying to solve the world’s problems, while their own citizens are living in poverty and crying out for help, but the response they often get is that there is no money. More than 45 million Americans and 7 million Britons live below the poverty line.

This is could be why Trump’s message of ‘America First’ and ‘Make America Great Again’ resonated with so many people, because the American Dream has become out of reach and they view Trump as their only hope to achieve it.

If a country spends billions on foreign aid per year, then surely, there is something that they can do to help their people. There is always something that can be done.

I am not advocating for a complete ban on foreign aid, but I think that rich countries should start listening to their people, especially the poor. The responsibility of a government is to the people who elected them into office. Elections come and go, promises are made, but most of them are never kept.

I think it is also time for foreign aid to take a different direction.

Foreign aid has assisted developing countries in achieving remarkable results, especially in the health sector, such as helping to eradicate tuberculosis and malaria, and reducing the number of HIV infections amongst others.  

But has it addressed poverty?

In Africa, there are many non-governmental organizations focusing on health issues and very few, if any, that focus on poverty alleviation and economic empowerment.

Living in poverty creates a myriad of problems, including increased vulnerability to diseases, because of various factors such as poor sanitation, access to clean water, access to healthy food and access to information to help people to make informed health decisions.

Addressing poverty will ultimately addresses its causes and effects. Instead of focusing on addressing social issues, which should be the most basic role of local governments, foreign aid should rather be geared towards providing financial opportunities such as grants for small and medium enterprises. This will create employment opportunities, encourage innovation, boost local economies and stop the vicious cycle of poverty.