Foreign Aid Policy

Foreign aid policy refers to the guidelines which govern the foreign aid strategies of a particular nation. Foreign aid policy helps in the formation of effective procedures with respect to the disbursement of foreign funds between nations.
Normally, the formulation of policies regarding foreign aid activities are guided by a handful of planned fundamental objectives, some of which are briefly described below:

Promotion of transformational developments:
The aim of such promotional activity is to offer support to the basic, important changes which govern transformational developments of a country in different spheres, as well as the organizations, manpower and economic frameworks involved with such developments. This, in turn, will bring about progress in the economic and social spheres of a country, without depending on financial aid from foreign nations.

Adherence to this policy leads to sound and stable economic conditions in developing countries.
Strengthening the economic conditions of weak states:
Following this policy, economically weak nations may lay foundation of a strong economy through introduction of activities like reforms, security, development of competences, and stabilization of the economy.

Disbursement of funds for offering humanitarian relief:
Through this policy foreign financial aid can be released on humanitarian grounds such as meeting human requirements during emergencies. Such activity includes helping people to combat natural calamities and man-made disasters (poverty, wars, etc.) and find out ways to minimize suffering.

The United States is the largest foreign aid provider in the world today. However, disbursement of American funds to both underdeveloped and developing countries across the world is under the control of a handful of organizations, both governmental and non-governmental. One such prominent American organization is the United States Agency for International Development (USAID), which deals with the formulation and implementation of the foreign aid policies of the United States.

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Last Updated on : 10th July 2013