Foreign assistance plays a substantial role in promoting the social and economic development of a nation. For instance, a considerable number of countries that have received foreign assistance and utilize it well have registered faster growth and development. A good example is South Korea was among the poor nations during the 1950s but currently, it is considered a middle-income nation. However, economical and political policies that are strong must be put in place to facilitate foreign aid inflows functioning. The presence of political goodwill will also facilitate the functioning of foreign assistance in development.
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International charity on the other hand, through the creation of several charity agencies in developing nations, will help in supporting development projects that are aimed at building capacity and empowering community members (Koschorke 47). The funded projects are mainly labor-intensive hence creating employment for the members. Charity is also used to support reform initiatives as well as strengthen the institutions that are present in an economy. These institutions include legal and democratic institutions that form the core for economic prosperity (Lancaster 77). Also, most countries utilize charity for capital accumulation which facilitates the creation of more wealth in a nation.
International investment also facilitates the economic development of a nation. It is indispensable that international investment is the main engine of growth. It ensures proper management of resources, penetration to world markets, a competition culture, as well as technology (Siebert 22). Also, international investment ensures new marketing channels and markets, and at the same time cheaper production facilities. The other crucial role involves the internalization of business, foster liberalization, developing new information and communication systems, privatization coupled with deregulation of several industries. As such, international investment facilitates the expansion of the economy, and as a result, it will ensure sufficient growth and development of the economy.
Koschorke, Klaus. (2002). Transcontinental links in the history of Non-Western Christianity. Otto: Harrassowitz Verlag.
Lancaster, Carol (2007). Foreign Aid: Diplomacy, Development, Domestic Politics. USA: University of Chicago Press.
Siebert Horst. (2006). The World Economy: A Global Analysis. London: Routledge.