The Effects of War and Peace on Foreign Aid

Introduction

Foreign aid is a term that encompasses all technical, military support, humanitarian and financial assistance that can be extended to assist needy countries. Foreign aid gets extended by non-governmental organizations, companies or federal government of developed countries towards the developing nations. It gets meant to bail them out of economic, political or social crisis enabling them to foster progress (Lipton & Toye, 2010). Apparently, foreign aid may impact positively or negatively with respect to the developing countries and is subject to decisions made by the helping government concerning its distribution. This paper provides a scrutiny of the impact that peace and war in a developing nation hold concerning its access to foreign aid. The paper also visits the specific actions assumed by government officials to mitigate troubles emanating from warfare as well as the role played by foreign aid in poverty and warfare eradication. Specifically, the paper examines these concerning India, one of the countries categorized as a developing nation in the world.

India is one of the developing nations that have not managed a stable immunity from intrastate and interstate wrangles and warfare (Hasmi, 2015). For instance, the relationship between Pakistan and India had for long been rocky and characterized by numerous outbreaks of wars rather than peace. It was just after the end of the second interstate war in1965 that the international states intervened through offering foreign aid meant to advance their selfish agendas. Long before, nations like The United States refused to grant any aid to India, as it was not in its best pages (Hanrahan, 2013). That was at the time of Nehru, a strong proponent of socialism led the Indian government. After the end of the Post-Cold War, India became a predominantly peaceful state suffering minimal insurgency either internal or external. Besides, the country has gained a better relationship with other countries such as The United States, and this relationship has yielded none but desirable results for both of the two nations. According to Hanrahan (2013), the US is one of the major donors of foreign aid to the Indian government. By the year 2004, statistics provides the findings that India's foreign exchange reserves were estimated to be just little below $100 billion (Lipton & Toye, 2010).

 Whenever there is peace, countries come to seal agreements for donations. For instance, foreign ambassadors assess the situation of India in terms of peace and gauge whether the aid will get used in agreement with the agreements. After the donations get made, the Indian government invests this money in both the private and public sectors. There, this foreign assistance is utilized in various dimensions available to contribute to the alleviation of poverty in the regions thoroughly affected. For instance, India uses some of this money to eradicate poverty via the creation of some employment opportunities. In return, this further contributes to the improving the living standards of Indian citizens whereby, an estimated 80 million people now belong to the middle class (Moreira, 2009). Besides that, foreign aid financed to India has helped in boosting the Indian armed forces which enables the Indian government curb any imminent occurrence of similar wrangles that may cost the economy a great deal once more. For example, the US provided foreign assistance in the Indian-Pakistan war of 1999 after which it emerged victorious of solving their issues (Chatrna & Ekanayake 2009).

A close exanimation of whether or not the access to foreign grants creates more chances for the successful diminution of poverty and warfare in developing countries today continuously yields inconclusive findings (Chatrna & Ekanayake 2009). However, most researchers currently infer that the impacts of foreign aid on the economic development of developing countries are somewhat slim though significant. It gets known that development indicators include investment, improvement of national income figures, and savings that mirror the impact foreign aid poses on a developing country’s economy. In fact, most researchers provide concurring findings that rate of development is sometimes indirectly proportional to the amounts of aid granted by developed countries. India succumbs to the rule since the foreign aid received so far has yielded negligible or negative effects on the country’s development indicators (Lipton & Toye, 2010).

India provides a history of foreign aid that attests a fact that foreign aid may play little significant roles in fostering economic growth or in deterring warfare. Looking back between 1955 and 1971, the US had disbursed large amounts of foreign aid to India. That was a time during which the country got preoccupied with the nationalization of its economy. The government thus decided to direct the funds so received towards the institutionalization of its economy. However, amidst all the funds given, the government shifted a meager amount to the private sector. In fact, it was estimated that the private sector received less than 5% of the foreign aid funds given to the Indian government (Lipton & Toye, 2010). The government chose to invest in public sector projects that included buying fertilizer plants, construction of technology and agricultural focused. For the government to boost the performance of the newly established institutions, some private institutions were closed. For instance, the private sector was banned from selling grains in wholesales in 1960. According to analyzes, some of these investments provide negligible benefits while the majority of them operated at a loss. The result was a perpetual shortage that included widespread food shortages and public rebellion. Due to this drift, the US government again intervened and supplied relief foods. That undermined local food production to a large extent (Lipton & Toye, 2010).However, today the government of India demands accountability. Its continued transformation of redistribution of finances from foreign aids in both the private and public sectors have given a different view of foreign aid. As a result, improvements in the economic sector have occurred characterized by more employment opportunities, reduction of public rebellions instigated by poverty, and higher standards of living (Moreira, 2009).

In conclusion, war and peace are two situations in a country which play pivotal roles when it comes to the access and the distribution of foreign aids, especially in developing countries. The international community is mostly obliged to intervene whenever intrastate war seems to infringe human rights or in times of interstate conflicts. However, it is evident that international organizations give foreign aids solely to the countries that are signatories to international treaties. Further, unlike foreign humanitarian aid, the distribution of foreign financial grants has appeared to be subject to politicization by government officials who are driven by their selfish agendas. In India, the misappropriation of foreign aid followed by inadequacy in planning by the government resulted in an unsuccessful growth of the Indian economy. That is what makes foreign aid seem not a contributor to the local economy.

References

Chatrna D. & Ekanayake E.(2009). The effect of foreign aid on economic growth in developing countries. Journal of International Business and Cultural Studies. 

Hanrahan C. (2013). International Food Aid: U.S. and Other Donor Contributions, 

Hashmi D.(2015). Internal Conflicts and Regional Security In South Asia, 

 Lipton M. & Toye J. (2010). Does Aid Work in India? NY. Routledge

Moreira B. (2009). Evaluating the Impact of Foreign Aid on Economic Growth: A Cross-Country Study. Journal of Economic Development, (30) 28-34

Carolyn Morgan is the author of this paper. A senior editor at MeldaResearch.Com in paper college 24/7. If you need a similar paper you can place your order from custom nursing papers.