Foreign Aid

Foreign aid is the transfer of resources between countries, usually one with more power and wealth than the other, in order to help assist the poorer country's stride to develop into a self-dependent nation. (Burnell, 3) I feel that foreign aid is very necessary and beneficial for both countries whether they are the providers or the receivers because not only are the two countries forming a bond and an allegiance, they are helping the world progress towards equality of nations. Although equality will most likely never be achieved between all countries foreign aid is a great start to the development process for third world countries. However, for foreign aid to really be beneficial the money must go to factors that affect the people like health care, unemployment, and education rather than all to the government for them to spend carelessly. As long as the money going to the government is used properly and distributed throughout the nation foreign aid can be a huge factor in economic development. Through extensive research and numerical data I will show and compare the positive effects of different factors aiding development and recommend the United States government focus its aid spending one particular factor.

The most important factor to pay attention to when looking at development problems of some third world countries is the UN's Human Development Index. This index measures the level of human development in a particular country, which is an effort to increase the capabilities of people to lead a full, productive, and satisfying life. (Griffin, 1) Development can also be considered the enrichment of a countries economy along with the citizens of that particular country. The Human Development Index is based on three measurable criteria, living a long and healthy life, being educated, and having a decent standard of living. Ways in which these criterion can be measured is by life expectancy, school enrollment, literacy rate, and income. (Griffin, 1) With the help of these measurements we are able to observe a broader view of a countries development, which ultimately will help us decide where to put our foreign aid dollars. The reason that the UN's Human Development Index is best for measuring development is because often material enrichment, such as an increase in GDP and GNP per capita, does not always work as well. (Griffin, 1) This is because all of the money and wealth is not going directly to the benefit of the poverty-stricken citizens that need the money the most; rather it goes to the already rich creating a greater gap between the rich and poor. However on the other hand there is a direct correlation between the GDP per capita of a country and the Human Development Index. To demonstrate this point here is a graph.

According to the graph above, it is visible that as the GDP per capita increases on the y-axis, the Human Development Index on the x-axis increases as well. This means that certain countries living standards and education have improved thanks to an increase in GDP. However, this is according to the trendline drawn in the graph. Although it seems like there is a direct correlation with each factor, with a closer look at the graph we see that in some cases the Human Development Index does not increase very much considering the large jump in GDP per capita. This proves that material enrichment does not always aid in the development process of a country.

The UN's Human Development Index is the best way to measure development in third world countries because it depends so much on human capital. "Human capital consists of the knowledge, skills, experience, energy, and inventiveness of people." (Griffin, 3) If people in a third world country contain the skills that encompass the definition of Human Capital, their Human Development Index measurement will skyrocket meaning they are on the road to development. The reason human capital is an important factor in making the Human Development Index the best way to measure development is because it depends on the abilities and worth of the people in the country. A country can receive money and improve their facilities and homes but it does not necessarily make them have the qualities of human capital. "Having a human development strategy is more conducive to promoting the long-term advantages of a developing country." (Griffin, 21)

As stated earlier development is the enrichment of a countries economy along with the citizens of that country. When looking at factors that influence development of a country there are three main factors that stand out in my mind: having a well-educated work force, access to foreign aid, and effective health services. If we put this in perspective it makes perfect sense that a country would be able to develop faster with a well-educated work force instead of a non-educated work force. For example, if we compare the percent of people that participate in education in the United States, a very developed country, to the percent of people in Mozambique, a very undeveloped country, we are able to see the relationship between development and education. According to a table in a reference book called 2004 World Development Indicators we see that the United States had ninety-four percent of people in the relevant age group attending secondary school where as in Mozambique only thirteen percent attend secondary school. This statistic alone can be interpreted as to why some countries like Mozambique do not have the capabilities of developing as quickly as larger more educated countries. Another statistic found in the 2004 World Development Indicators book is the education outcomes for specific countries. In 2000/01 the expected years of schooling for a child or young adult is fifteen years where in Mozambique and Chad, both poverty stricken areas, the expected years of schooling is only seven years. These two African countries are so under-developed because they are unable to create and hold jobs due to the lack of education. With the help of the United States' foreign aid money towards educational development in third world countries, the rate of development would increase greatly.

This brings up another condition that has a large effect on the development of third world countries, foreign aid. According to Burnell foreign aid can be defined as, "Inter-societal transfers of resources that are intended by all the relevant parties, especially the provider, to serve first and foremost the recipient's needs, interests, and wants." (Burnell, 3) Aid can be considered a charity that fulfills the recipients needs for development. For some countries that do not have the luxury of having a wealthy government, they are very dependent on foreign aid dollars. To explain, Jordan received 534 million dollars of aid in 2002 and 15.1% of that aid went to government