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Foreign Aid to Slumping Economies: A Recipe to a Strengthened Global Economy

By Edited Nov 13, 2013 0 0

Giving helps all receive more.

 It’s a vicious, self-fed cycle. Poverty stricken nations lack the inputs required to realize new technologies at a competitive pace.  As a result, much less innovation occurs within these nations.  This limited innovation stunts economic growth.  Impoverished nations face much difficulty when trying to break free of this trap.  While these poor economies struggle seemingly unnoticed on the margins, real people suffer in absolute squalor. Despite the harsh reality of this situation, foreign aid given by wealthy nations benefits both struggling and strong economies. When wealthy nations provide resources to stimulate these poor economies, both the giving and recipient nations reap the rewards.

Many industrious and bright minds sit trapped in poverty.  These poor nations often lack the resources necessary to realize such valuable intellectual resources.  This results in wasted potential. Foreign donations given to struggling economies helps these nations yield higher levels of scholarly production.  Increased educational levels spurred on by such donations bolsters economic output in recipient nations. In turn these recipient nations become more capable of sustaining their own economic growth into the future.

Foreign aid also helps provide essential nourishment.  Such aid curtails the devastating impact of starvation in recipient nations.  Properly nourished people are much more productive than weak or sick ones.  The people either strengthened or spared by foreign aid can now work with greater capacity.  In turn, economies receiving food aid increase their economic output.

Interestingly, providing foreign aid does more than benefit recipient nations.  Impoverished nations are the most capable of providing the world with inexpensive labor.  As a result, establishing programs that builds factories or feeds workers benefits both  donor and recipient nations.

Looking to the past reveals how economic abundance at home often accompanies foreign aid abroad.  The American economic growth experienced in the 1960s would not be possible without reconstruction efforts in Europe and Japan after WWII.  The primary purpose of such action was to rebuild viable future trade partners. Indeed much of this out pouring was a charitable offering in the wake of over-whelming misery and death.  However, future trade gains for the United States required and heavily motivated such reconstruction.

 Foreign Aid benefits both the giving and recipient nations. When nations are given a leg up, they in turn generally become more productive for the entire global society. From the third world to war-torn countries, the possibility to aid those less fortunate abound. It is important that citizens and governments alike remember that giving to other nations will impact future economic growth positively at home and abroad.



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