How Effective is Foreign Aid?

by Stahrl Edmunds

Fall 1968

Volume 11
Issue 1

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The foreign assistance program today is dominated by the overwhelming requirements in Vietnam and the cut in AID's total budget. At the same time Vietnam commitments have grown to over $500 million, or to nearly 20 per cent of the total AID budget. With a budget decline of 10 per cent and with one country absorbing 20 per cent, assistance has had to be cut back to all the other nations by 30 per cent. But it is not obvious that their needs have declined by 30 per cent along with the availability of funds. Indeed, for some countries, their needs are much greater. India has become desperately short of food, some regions verging on starvation. Several South American neighbors are sinking slowly into financial morass, balance of payments deficits, fiscal deficits, inflation, rising populations, and little economic growth. Their troubles stem largely from declining world prices for the few agricultural exports upon which they are dependent. Foreign assistance under the Marshall Plan started with a concept of sorts, that the U.S. should help rebuild the war-torn economies of western Europe. The fact that international development could be stated so deceptively simply creates one of the problems which exist today.

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