What is foreign aid?

What is foreign aid?

Wealthy countries and non-government organizations frequently donate or lend resources to help the population of a country in dire economic need. This can come in the form of educational assistance, funds, materials, construction, food, medicine, and so on.

On a macroeconomic scale, foreign aid constitutes one of the major forms of asset transfer between different parts of the world. Governments, charitable organizations, and NGOs donate or lend resources to countries that cannot supply their own needs effectively. Aid can be given altruistically, that is, just for the sake of doing good deeds, or it can be used as a tool for influence or personal gain, which is common.

Aid can be given to show political support for a country or leader, to help the country extract resources that will profit the donor country in the future, or, to control a developing country through stipulations for continued funding or its repayment terms. Buy giving aid, a country may be purchasing an ally in a strategic geographical area.

The United Nations gives foreign aid through the World Bank and International Monetary Fund (IMF).

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