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rina
Joined: Jul 31, 2006
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Is Aid Causing More Pain Than Gain?
August 8, 2006 - 11:48 PM
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I read this IMF working paper entitled "Poverty Reduction Strategy: Is Aid Causing More Pain Than Gain?" and i got stumped. Im loss for an answer for what an aid can really do for a country. As I read thru the paper it turns out that for Uganda (the country of study), it appeared that the large inflows of aid gave them more gain than pain. The pain, identified in the study, was that of managing the liquidity brought in through high government spending and the study showed that it appeared to be bearable for Uganda. Overall, the paper claimed that a financial inflows to Uganda has contributed positively to the country's poverty reduction effort. Well, maybe only to a certain degree i agree. With all these aids others are still deprive but without it millions are more likely to suffer. I don't know... im really lost here.
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Lewis Best
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Re: Is Aid Causing More Pain Than Gain?
August 9, 2006 - 01:49 AM
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It depends whether aid is used properly, and in what form it comes in.
Sustainable development is a form of aid that will definately produce more gain than pain, however if money is just beoing thrown at people with no thought on how it is going to be used? Well that can cause more pain than gain.
The IMF and World Bank aren't without blame either. Some of the ways in which they conduct their activities can cause a lot of pain, especially when it comes to debt cancellatoin (or, more rightly, a lack of debt cancellation) and related issues.
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Chris Williams
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Re: Is Aid Causing More Pain Than Gain?
August 9, 2006 - 06:09 AM
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To my understanding, aid in itself is a good thing overall and most of it, when properly used, is useful to alleviating poverty.
However, the aid that countries receive is just a small drop in the ocean to the amount of money they need to really get rid of poverty. Aid is sometimes considered to be a smoke screen as if we really cared about poor countries, we would do something to deal with trade injustice. The benefits of a fair trading system in the world would by far outweigh the benefits of annual giving of money.
However, now that Africa and other places are not being used as a cold war battleground, rich countries can demand certain things in order for the governments to receive aid money. E.g. a Western government can demand better human rights in exchange for aid money. On the other hand, rich countries often dictate too much on how a country should be run, which can have an overall negative effect.
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melanie mae
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Re: Is Aid Causing More Pain Than Gain?
August 10, 2006 - 09:45 AM
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Rina, you asked a really good question that has been on my plate recently. I work for a very poor Native American community that has a history of "pain" in some degrees from getting handouts.
There are buildings here that are in very poor shape that used to be $100,000 homes, because people were handed the housing, used it in a bad way, and then less than 10 years later the property is abandoned and worthless. I am doing a cleanup work here to clean up the areas along the highway that have been abandoned and to even do the cleanup we are using federal funds (again a handout) to remove the uninhabitable property. Plus, it was work for me to even find a reasonable contractor who is willing to work on it. (and that was hell--contractors do not want to work on the rez because it has a bad reputation).
Some people are thankful but others such as the property owners have shown an uncaring attitude that really bothers me. Here we have gone through the trouble of raising $5,000 to remove the junk and the owners want money and will not remove their personal trash from the building, (trash they say they want to keep) and the buildings are going down next week.
Or I hear, why don't you get rid of that building or that one, why don't you put up benches and flowers, why don't you do this or that and it seems like a demand, instead of a request. 
Some people here do not pay rent, electric bills, buy their own appliances because they ask the tribe to pay it all (and they do) then they trash the house and leave it to stand and mold. 
But...this is not a judgement against all Native Americans. There are some that I have met that are not this way at all and live in a more respectful way. This is just something I have seen as a result of handouts, and not only me but my co-workers and supervisors. I am happy with the cleanup work because if I do not do it, it will not get done, and these buildings have been rotting here for 20 years.
Thanks for the question. 
This post was edited on: 2006-08-10 at 09:56 AM by: pebbles
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Azira Aziz
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Re: Is Aid Causing More Pain Than Gain?
August 11, 2006 - 06:31 AM
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I think that aid is useful and yes very much needed. It simply makes more sense to teach a man to fish so that he would eat every day rather than give him a fish today which isn't going to help him in the long run. Basically we've been talking about what I assume as humanitarian aid in poverty-striken areas. Let's talk about conditional aid, like the one they took away from Hamas, or maybe I can brief you for now about the monetary aid and the effects of the Asian Crisis towards what's closer to home to me.
In SouthEast Asia, the outline of pain in disguise of gain has one single phrase, "Asian Crisis 1997". The IMF, or Internartional Monetary Fund distributed and allowed loans to countries like Thailand, Korea, Indonesia etc, all except Malaysia accepted the conditions accompanying those loans, being that IMF is allowed to dictate these countries' trade policies.
I usually like to put graphs, but it won't appear here so you can see and read about it in detail here.
Anyways, the effects now to those countries is that 'free trade'by IMF's policies is making the poor people stay in poverty and the richer ones aren't exactly that rich either. In fact, the only country thriving that I know of is my own, because my feisty PM Mahathir refused aid and settled the problem with our own methods.
This post was edited on: 2006-08-11 at 06:41 AM by: ChibiMelody
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Shweta
Joined: May 20, 2006
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Re: Is Aid Causing More Pain Than Gain?
August 13, 2006 - 11:43 PM
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budget lines do matter! and development sector is no different. of course "whats the need" and "where does money get spent" is linked and suposed to be linked.
but it has advantages as well as disadvantages.
if money allotted to one issue is huge..everybody focuses on it. and this does help somehwhere. for example..the huge amount of funding coming for HIV/AIDS and Anti- Trafficking is bound to bring many players into the sector. and i hope it will help! i hope to see the positive ripple effect some years later.
the disadvantage, i think, is about loosing innovation. beacuse you are expected to spend money accroding to budget lines. the other disadvntage is that people focus only on what gets funded and overlook other needs/risks/vulnerabilities at times!
for example... after Tsunami in South Asia, so much money and focus was on biuding homes, providing boats and nets (according to the budget lines of course) that these organisations overlooked the migration that was taking place..as well as the link which could have been between migration and traffikcing!
i cant forget how difficult it was becoming for us to help the organisation accept that the problem of trafficking was there and had to be adressed. this was 8 months after Tsunami and we were in Tamil Nadu. that organisation kept on emphasising that "such things do not happen in our community". but this year as lots of money is coming in for anti-trafficking, that organisation is more than happy to say that the problms exist! what a change of heart!!
anyway..i do think that aid is important because one's own resources may not be enough to deal with everything. what i do not like about the aid is that often one gets the fund when one has invested a lot in the relationship with funding agencies. and i do not like it when politics and only politics decide where does the money go! and when values do not find place!
This post was edited on: 2006-08-13 at 11:53 PM by: Shweta-sj
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Rajesh
Joined: Jan 11, 2005
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Re: Is Aid Causing More Pain Than Gain?
October 30, 2006 - 05:41 AM
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It has both pros and cons. On the one hand, Aid from the developed countires have great significance on the economic development of the poor countries. On the contrary, the mind i.e adivsors, who come with the donation have some negetive impact. They are more stict into that financial role rather than advisory role and they never try to understand the local situation. So, sometimes it has negetive result due to incompatiblity of developed brain and local condition. I prefer foreign aid but have to be used by local people.
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