3. The volume of foreign aid is inadequate to reduce global poverty.
According to Lovett (2016), in 2014, overall foreign aid has increase by 3.5% (compare to the volume in 2013), but the volume of aid for Least Developed Countries had fallen by 4.6%. Refugee crisis contributed to this increase (ibid.). The donor countries tend to count in donor countries refugee cost as part of their ODA (ibid.). This cost increased foreign aid by $1.8 billion (ibid.). So, if we exclude the in donor countries refugee cost, actually there is no increase in the volume of foreign aid for poor country. This situation creates problem because the proportion of people living in extreme poverty actually had doubled in the last fifteen years (from 12% in 1990 to 30% in 2014) (Barder & Juden 2016). Consequently, with the situation where in the poorest countries – the foreign aid fall but the poverty increased sharply – it is highly likely that the current volume of foreign aid will be inadequate to reduce poverty in the poorest countries, which in turn, will make the effort to reduce the global poverty fail. Moreover, most of the OECD (Organization for Economic Cooperation and Development) countries did not raise their foreign aid to 0.7 percent of gross national income (GNI) – the target (commitment) of ODA which is needed to fully finance the eight Millennium Development Goals (MDGs) (Haas & Hird 2013, p. 69). In 2011, the average of OECD’s ODA was only 0.32% from the combined GNI of those countries (less than half from the target) (Shah 2014). In 2013, only several countries (such as Norway, Sweden, Luxembourg, Denmark, and Netherlands) have fulfilled this target (Haas & Hird 2013, p.70). In this sense – if it were true that foreign aid is useful and therefore needed – the poorest countries will not be able to gain benefit from …show more content…
This is mainly because the people who have been empowered through technical assistance choose to leave the government institution. For example, the result of the capacity building (which was funded by the World Bank as much as $9 billion loans and $900 million grants) was around 70,000 highly qualified government officials leave the continent annually (Werlin 2009, p. 503). Moreover, some technical assistance becomes useless because the government have no intention to use them. For example: after around $6.5 million aid given to Cambodia to funded the technical co-operation assistance program, the government of Cambodia said that the capacity gained by the government official from this technical assistance is unlikely to be used when they return to their office (Greenhill 2006, p. …show more content…
It is estimated that at least a quarter of US$525 billion aid that is provided by the World Bank has been misused (p.52). According to Moyo (2009a, p.49), the foreign aid has become the main supporter for corruption because it provides the biggest source of money to be corrupted. Moreover, take a look in the case of Nigeria. Since 1960, this country has received around US$400 billion of aid (Burleigh 2013). Yet, since 1960, the corruption in Nigeria is estimated around US$ 380 billion (ibid.). Although it is not clear where the source of the money that is being corrupted, but it seems that if no or less aid is given to Nigeria, there will be less corruption in Nigeria as this country itself did not have much money to be corrupted (look at the fact that even with aid, the corruption was less than the volume of
According to Lovett (2016), in 2014, overall foreign aid has increase by 3.5% (compare to the volume in 2013), but the volume of aid for Least Developed Countries had fallen by 4.6%. Refugee crisis contributed to this increase (ibid.). The donor countries tend to count in donor countries refugee cost as part of their ODA (ibid.). This cost increased foreign aid by $1.8 billion (ibid.). So, if we exclude the in donor countries refugee cost, actually there is no increase in the volume of foreign aid for poor country. This situation creates problem because the proportion of people living in extreme poverty actually had doubled in the last fifteen years (from 12% in 1990 to 30% in 2014) (Barder & Juden 2016). Consequently, with the situation where in the poorest countries – the foreign aid fall but the poverty increased sharply – it is highly likely that the current volume of foreign aid will be inadequate to reduce poverty in the poorest countries, which in turn, will make the effort to reduce the global poverty fail. Moreover, most of the OECD (Organization for Economic Cooperation and Development) countries did not raise their foreign aid to 0.7 percent of gross national income (GNI) – the target (commitment) of ODA which is needed to fully finance the eight Millennium Development Goals (MDGs) (Haas & Hird 2013, p. 69). In 2011, the average of OECD’s ODA was only 0.32% from the combined GNI of those countries (less than half from the target) (Shah 2014). In 2013, only several countries (such as Norway, Sweden, Luxembourg, Denmark, and Netherlands) have fulfilled this target (Haas & Hird 2013, p.70). In this sense – if it were true that foreign aid is useful and therefore needed – the poorest countries will not be able to gain benefit from …show more content…
This is mainly because the people who have been empowered through technical assistance choose to leave the government institution. For example, the result of the capacity building (which was funded by the World Bank as much as $9 billion loans and $900 million grants) was around 70,000 highly qualified government officials leave the continent annually (Werlin 2009, p. 503). Moreover, some technical assistance becomes useless because the government have no intention to use them. For example: after around $6.5 million aid given to Cambodia to funded the technical co-operation assistance program, the government of Cambodia said that the capacity gained by the government official from this technical assistance is unlikely to be used when they return to their office (Greenhill 2006, p. …show more content…
It is estimated that at least a quarter of US$525 billion aid that is provided by the World Bank has been misused (p.52). According to Moyo (2009a, p.49), the foreign aid has become the main supporter for corruption because it provides the biggest source of money to be corrupted. Moreover, take a look in the case of Nigeria. Since 1960, this country has received around US$400 billion of aid (Burleigh 2013). Yet, since 1960, the corruption in Nigeria is estimated around US$ 380 billion (ibid.). Although it is not clear where the source of the money that is being corrupted, but it seems that if no or less aid is given to Nigeria, there will be less corruption in Nigeria as this country itself did not have much money to be corrupted (look at the fact that even with aid, the corruption was less than the volume of