Discuss the advantages and disadvantages to a developing nation of receiving economic aid from other nations.
The spirit of giving aid is magnanimous; it blesses the nation that gives and the nation that receives. Aid cannot be equated to almsgiving nor it is a doling of charity. An aid assumes that the receiver can be sustained at the right time. It also assumes an equality sharing of the products not in the economic sense but in a social and altruistic sense.
After the World War II, the USA found the wisdom of helping underdeveloped nations and those that were battered by the war. By virtue of her position, the USA could help. Of course, willingness was there and Marshall Plan under which the USA helped the European nations has become a classic example. The USA had a surplus of many goods which she could easily part with. This, of course, had an economic advantage for her for otherwise she would have to face a glut of goods leading on to recession.
This is an example only to show how economic aid has become a necessity in the modern world. There are nations which have had an advance start and so their economy has been sound. But there are many nations of the world who have to start almost from scratch. If these nations were allowed to starve by the most favored nations, the former may turn to ideologies other than democratic. All the things cherished by enlightened nations would be blown to pieces. This had happened despite the aid given to nations on the brink of starvation.
Advantages of the aid: The aid takes many forms. It need not be financial aid. It can be in the form of food, technical know-how and basic machinery to build industries. Most of the developing nations have a chronic shortage of food, dairy products, and medicines to fight diseases. The USA has been supplying milk products, cottonseed oil, and wheat products. This has helped the developing nations in more than one way. Their new formed energy need not be merely wasted in creating food but could be used in building her economy solidly. The nation’s needy may be kept satisfied as otherwise, it would lead to internal strife and revolutions. One of the main objectives of food aid is to help the nation’s children with healthy and supplementary food, so that they can in turn be productive.
Technical know-how helps the receiving nation to build suitable industries. Thus India built three major steel industries with the aid from Germany, the USSR and England. Atomic reactors have been built with help from Canada and the USA. Again under the technical aid program exchange of experts is being arranged to overhaul her industries and thus improve her economy. This exchange of know-how is perhaps the best form of aid.
Aid in the form of machinery to increase production is welcome. For example, farm machinery to developing countries does go a long way to increase production. This may include the supply of good farm stock in the form of seeds and so on. High-yielding varieties of paddy have been thus introduced in rice-growing countries.
Receiving aid has also its pitfalls. The donor nation may attach strings to her aid which will make the receiving nation dependent on the donor forever. Instances are not wanting to illustrate this point. Airplanes were supplied to a country and adequate spare part were never supplied.
A major disadvantage is that such aid kills the initiative on the part of the receiving nation. They think they can depend on the donor at all times and they take aid given for granted. They forget that the donor nation had to struggle hard once to reach its present level of prosperity. They forget to set their house in order and very often expect the other country to come forward to help in their economic woes.
Aid is not after all charity. The aid will have to be returned at some time or other. When the receiving nation cannot produce goods or services, the aid is kept up and the receiving nation has to face the humiliation of having debt in the form of aid loans. This is a sore situation and any self-respecting nation would resent it. The psychology of indebtedness to another for any kind of service received is there. When the receiving nation, for reasons better known to her, does not support the donor nation in her policies, it is resented, and more often than not, a threat is thrown of revising the quantum of aid or abolishing it completely.
Aids cannot be avoided as the economies of different countries are not the same. Some had an early start and are naturally endowed with resources and some countries have been handicapped for exactly the opposite reasons. So the best form of aid will be to share the know-how so that relationships of one country with another will not be lopsided.
