Strategies 3

Non-government organization

The private organizations that pursue activities to relieve suffering, promote the interests of the poor, protect the environment, provide basic social service, or undertake community development.

Types of foreign aid

Humanitarian aid is aid given to alleviate short-term suffering, which may be caused by such events as droughts, wars, or natural disasters.

• Food aid
• Medical aid
• Emergency aid

Development aid is intended to help developing countries achieve their economic growth and development objectives.

• Long term loans
• Project aid
• Technical assistance aid
• Commodity aid
• Tied aid

Evaluation of foreign aid

AD

• Help escape the poverty cycle.
• Provision of basic service.
• Improve income distribution
• Achieve economic growth
• Millennium development goals
• Aid for debt relief helps countries reduce their debt burden and get out of debt trap.

DIS

• Tied aid
• Conditional aid
• Aid fund is unpredictable, which makes it difficult for recipient governments to depend on aid funds.
• Uncoordinated donors.
• Aid resources are not allocated on the basis of the greatest need for poverty alleviation.
• Corruption involves misuse of aid funds.

NGOs

AD

• Strong anti-poverty orientation of activities. (concerned with reaching poor people)
• Work closely with their beneficiaries. (NGOs involving local people in the design)
• Offering expertise and advice. (Accumulated experiences on a single field)
• Have a greater degree of freedom. (Assess problem independently)
• Enjoy greater trust. (NGOs solving problems at grassroots level)
• Acting as advocates on public policy issues. (ensuring poor people’s concerns are heard)

DIS

• Too small and too weak. (limited resources and difficult to attract skilled person)
• Creates a demand for technical experts and personnel that may deprive governments of scarce highly qualified personnel.
• Challenge to state authority. (sometimes may conflict with government policies)
• Possible loss of independence. (due to growing dependence on government)

The World bank

A development assistance organization that extends long-term loans to developing country governments for the purpose of promoting economic development and structural change. [established in 1944]

Functions

• Grant loans to developing countries for economic development
• Reduce poverty

AD

• It helps developing countries achieve their economic development goals
• It gives out loans to underdeveloped countries to fight their poverty issues.

DIS

• Social and environment concerns
• Governance is dominated by rich countries
• Excessive interference in countries’ domestic affairs
• Conditional assistance

The International Monetary Fund

A multilateral financial institution with the original purpose of lending to countries experiencing balance of payment deficits under the system of fixed exchange rates that existed at the time.

Functions

• Oversee the global financial system
• Stabilize exchange rates
• Help countries that experience difficulties making their international payments

AD

• Provides loans to member nations

DIS

• Social and environment concerns
• Governance is dominated by **rich countries **
• Excessive interference in countries’ domestic affairs
• Conditional assistance

Institutional change

The focus on the institutions that can be improved as part of a strategy to achieve economic development:

• Access to banking and finance (Micro-credit scheme)
• Empowering of women (Duel economy)
• Reducing corruption
• Increasing property rights (facilitate the incentive of research and development)