Increasing development- Aid

• What is aid?

  Aid is given from one country to another either as money or as resources. Money can be spent on development projects. There are different types of aid for development. These are; "Top-down", "Bottom-up", short term, long term and debt relief.
• "Top-down": When an organisation or government receives the aid and decides how it should be spent.


  Advantages:

  • often used for large projects
  • solves large scale problems
  • improves country's economy which helps with long term development

  Disadvantages:

  • country may have to pay back the money with interest
  • may not benefit everyone
  • money may not always be spent on development
• "Bottom-up": When money is given directly to local people.

  
  

  Advantages:

  • local people have a say in how they want the money to be used
  • projects employ local people so they can earn money and learn new skills

  Disadvantages:

  • projects may be small-scale
  • different organisations may not work together so projects may be inefficient
• Short term: Aid to help countries cope with emergencies.


  Advantages:

  • gives immediate relief
  • money allocated for development doesn't have to be used for the emergency instead

  Disadvantages:

  • often doesn't help with long-term recovery
  • food aid may limit the price farmers can charge for their crops so their income is reduced
• Long term: Aid given over a long period of time to help countries develop through investing in project.


  Advantages:

  • most projects aim to be sustainable
  • can improve life for people in the long-term
  • may help build trade links between the donor and recipient countries

  Disadvantages:

  • the recipient country may begin to depend on aid
  • money has to be spent on goods and services "tied-aid"
• Debt relief: Wealthier countries can cut or partly cut debt to countries that have borrowed money.


  Advantages:

  • frees up money that can be spent on development instead
  • donor countries can specify how the cancelled debt should be spent

  Disadvantages:

  • donor countries may be reluctant to cancel debts for countries with corrupt governments
  • imposing conditions can mean that the money isn't used where it's most needed