Mostly, poverty affects Asia and Sub-Saharan Africa. More than half of the world’s population lives on less than 2 dollars a day (Sachs, 2009). Foreign aid is one of the methods used by wealthy nations to help reduce poverty in the least developed countries.
Financial aid should be used as a complementary component of market forces, where a given country is unable to mobilize the required investment on its own due to lack of sufficient income and infrastructure (Sachs, 2009).
Countries like China and India have benefited greatly from financial aid in the last five decades (Sachs 2009). As a result of the aid, diseases such as Smallpox and Malaria have reduced dramatically in these two countries.
Demand for better healthcare, improved education, and better roads have led to a rapid increase of the living standards globally (Banerjee and Duflo, 2011). Improvement of infrastructure and technology through aid from the US and Japan have made Malaysian and Thailand’s manufacturing industries a success (Sachs, 2009).
The population growth in poor countries counteracts the poverty eradication measures. Use of contraceptives as a method of family planning launched by the US government in the 1960s greatly reduced population growth (Sachs, 2009). A high mortality rate is part and parcel of the underdeveloped countries.
A campaign launched by UNICEF in 1982 enabled some of the poorest countries to reach at least 80% immunization rates (Sachs, 2009).
Despite African countries being given a foreign aid since 1962, there have been no significant changes (Sachs, 2009). This can be associated with poor leadership and corruption.
Sachs says that in the year 2004, an African Union report estimated that over 140 billion dollars annually is lost through corruption (2009). Political instability in most African countries is also damaging.
Foreign aid has resulted in massive dependency on support of the foreign countries (Sachs, 2009). With foreign debt of nearly 350 billion dollars, the dependence is evident. This dependence keeps most countries in a poverty trap; they are currently unable to get out of it (Sachs, 2009).
Availability and accessibility of energy is associated with poverty in a community. Energy plays a crucial role in alleviating poverty (Pachauri and Spreng, 2003). Access to electricity directly relates to access of tap water and better education (Pachauri and Spreng, 2003).
A poor household is distinguished from a better one by the choice of fuel, which uses efficient energy (non-pollutant) (Prey, 1989).
Solar lantern programs mostly target developing countries (Prey, 1989). Electrification in such areas, especially in the rural parts, is impossible to achieve (Pachauri and Spreng, 2003). Energy devices used in these places are inconvenient and some of them, for instance, the kerosene lamp among others, have health implications.
Solar lanterns are portable, easy-to-use, and reliable (Pachauri and Spreng, 2003). Solar lantern programs have enabled a large number of people to have a source of power.
Undoubtedly, foreign aid is an effective tool that can be used to fight poverty. Such countries as the US and Canada have provided financial aid to a number of African countries to support education and help reduce poverty. However, foreign aid can only be effective when implemented with reforms.
Monitoring how the aid is used is extremely crucial, which can be carried out by civil society and other non-government organizations (Banerjee and Duflo, 2011). Lack of electricity does not necessarily mean poverty, but access to energy sources other than electricity is more powerful.
References
Banerjee, A., & Duflo, E. (2011). Poor Economics: a radical rethinking of the way to fight global poverty. Public affairs. Web.
Pachauri, S., & Spreng, D. (2003). Direct and indirect energy requirements of households in India. Energy Policy, 30. (6): 511-523.
Prey, J. (1989). Solar lantern development in Papua-New Guinea. Web.
Sachs, J. (2009). Can Foreign Aid Reduce Poverty?The Earth Institute at Columbia University. Web.