AOG
Do you know why we actually provide aid?
Surely you don't think it's out of sheer altruism?
There can be varied reasons for giving foreign aid, such as economic, political, strategic as well as cultural; the most important reason being, augmenting economic development of the recipient country.
Less developed countries (LDCs) are characterized by low income and unemployment, which results in low savings and investment. Therefore, capital stock is small in these countries, while the population growth is comparatively high.
In order to sustain such large populations, they need rapid economic development, which is simply not possible due to low levels of saving and investment. As a result they turn to richer countries for external help in the form of financial and technical assistance.
Financial assistance given by the developed countries (DCs) not only aims at economic development of the recipient country, but also for the balanced growth of the world economy.
That's closer to the reason we give aid...it gives us a foothold in DCs. The reason we need this foothold, is that Western economies are stagnant, and we need British influence ins emerging states.
We need to be careful about what we think of as 'aid'. This isn't just the donation of money, but also covers lower interest loans, provision of services and technology.
I think it's wrong to think of aid simply as charity. It's not quite the same.
If both the donor and recipient countries take appropriate measures to prevent misutilization of funds, then aid can play a significant role in fostering rapid growth and development of the less developed economies.
However, foreign aid should not be considered as a permanent solution to the economic problems of the LDCs and hence should be supplemented by adequate efforts to raise the level of domestic savings and investment.