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POLS 2080 (26)
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Chapter Eight Summary

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University of Guelph
Political Science
POLS 2080
Adam Sneyd

Chapter Eight: National Development and BilateralAid Clarifying the Terminology  Donors: providers of development assistance (although lenders is more appropriate given their habits of giving out loans)  Bilateral Aid: a country giving aid money directly to another country –government to government  Multilateral Aid: a country giving aid money to an institution such as the UN or World Bank  Another term used for ―foreign aid‖ is official development assistance (ODA) o They are used interchangeably however they differ in their purpose: foreign aid can be used for a multitude of things whereas ODA must be official funding geared toward economic development and welfare of the state  Official Development Assistance (ODA): The flows of official financing administered to promote developing countries‘ economic development and welfare, which are concessional in character, and with a grant element of at least 25 percent  Aid from individuals, foundations, NGOs, or private corporations does not count as ODA  Military assistance and export credits to promote donors‘ sales of good are not ODA  Official Assistance: Aid to countries not classified as ‗developing‘ (e.g., Russia)  Donors‘ debt relief to developing countries does not qualify as aid  Donor countries‘ peacekeeping costs do not qualify as aid  Loan: Donation that must be repaid but in terms better than commercial transactions to be considered ODA  Tied Aid: The donor‘s economy benefits from the ODA it provides Overview of Aid Donors  Most donors (24) belong to the DAC—the Development Assistance Committee—which is part of the OECD (Paris)  In 2008, total ODA was equivalent to private flows (foreign direct investment) to developing countries: US $121 billion  Some OECD countries that give aid, as do China and Arab countries, are not part of the DAC o China has given African countries many loans and investments, something that technically is aid but is not considered ODA –the conditions of China‘s aid are murky and unclear  Countries that aren‘t a part of OECD also give aid, such as Cuba, Taiwan and Venezuela  Foreign aid increased between 1970 and 1990, slowed down in the early and mid-1990s due to ‗aid fatigue‘, and rose again after 2000 (mainly as ‗debt relief‘)  In 1970, the UN General Assembly approved a resolution that ODA would be expected to be at least 0.7 percent of a donor country‘s GNP (Gross National Product)  However, by 2008, DAC was still just 0.31 percent of donors‘ GNP  More generous countries are Sweden (0.98%), Luxembourg (0.97%), Norway (0.88%), and the Netherlands (0.80%)  The USA, the larger donor in dollar terms, is actually the least generous in relative terms (0.19%) along with Japan (0.19%)  Non-DAC contributions accounted for roughly $15 billion Donor Motivations  To help the less fortunate abroad, whether this is motivated by charity or solidarity o This is naively idealistic  To serve the self-interests of donor countries, especially in terms of pursuing foreign policy objectives, including diplomatic, commercial, and security interest  The self-interest principle is that foreign aid can be used to help people abroad but that the selection of recipients and aid modalities should prioritize instances where it maximizes the direct and indirect benefits to the donor country o This principle is criticized as foreign aid hides the pursuit of naked self-interest behind claims that it is aimed at helping others  During the Cold War, foreign aid was manipulated into preventing the expansion of the Communist ‗threat‘ – seen in the insurgence of aid toward countries in Latin America and Asia, where the fear was the most present  Today, ODA is used to promote neoliberal economics, democracy, good governance, and the development of the private sector. o Humanitarian assistance, on the other hand, best reflects principle of selflessness  Another reason for disbursing foreign aid is to see it as compensation for present and past injustices, whether today‘s unjust international economic system, or colonial exploitation  Another reason for foreign aid is to see it as an international obligation under international human rights law: UN‘s right to development is universal o Everyone has the right to an education and to earn a livelihood o When a country is unable to provide these human rights because of a situa
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