Foreign aid is considered to be a very vital element in funding developmental programs in developing countries. Currently, foreign aid is considered as a significant tool of foreign policy of states. This plays a major role of foreign exchange earnings for third world countries. After the occurrence of World War II, developed countries with well-established economies have been dishing out billions of dollars in terms of foreign aid to the third world countries with no strings attached. Prior to the third word ward, foreign aid was used as a profitable investment. Nevertheless, it was only in post-war time where foreign aid started in a strategic manner. Developed western countries commenced making contributions primarily for the development of infrastructure, emergency relief, poverty alleviation, emergency relief, maintaining peace and socioeconomic reconstruction programs (Canningham & Nils, 2010). In addition, there are many mechanisms through which aid can contribute to die process of economic progress. i.e. aid encourages investments in both human capital and physical, aid act as a substitute to the worry domestic resources and acts as main source of foreign exchange earnings, foreign aid also increases the capacity to import essential goods and technology, aid helps to raise the productivity of both labor and technological allocations and also enhances native technical change, aid also brings other essential resources for development such as administrative skills, organizational competence market access and research ideas. It also helps the third world countries to in filling major gaps like; export –import gap, investment saving gap and technological literacy (de Ree, and Eleonora, 2009).
It’s also observed that the work of foreign aid may be beneficial to some countries and might not be beneficial to others. It’s therefore evident that economic condition, geographical condition, work of institution and level of technological improvement are among the conditions that foreign aid has to functions.
Liberia broke into of war between 1989 and 1997. After the elected government was overthrown, the armed force of Liberia, and Johnson’s forces broke into war. For that period, there has been a civil war in Liberia. Countless number of Liberians were killed within that period and many others have been relocated for an unknown period of time and they are trying to live under unacceptable human life conditions. These made Liberia to be an economically dependent country because of lack of political cohesion and poverty. This is as a result of U.S. operation in 2002. The economic situation is due to the result of the instability and insecurity.
For that period, the security and economic problems of the war spoiled the country into country of cruel governance and high level of corruption (Moyo, 2009). The security and economic situation of Liberia has improved greatly. The nation is now experiencing the most democratic, advanced, secure and prosperous era that took 30 years. International aid is the most vital factors in Liberia’s economy improving. Improvement of agricultural sectors has had a great positive impact on the entire economy of the country. However, the living standards of the Liberia people still remain worst in the world. Lack of basic living conditions like shelter, clothing, medical care, safe and clean water infrastructure and high crime degree are some of the major issues that has resulted to serious problems for the Liberia government.
High Unemployment rate is yet another negative effect to the economy of the country. The state of the national security forces of Liberia is wanting. This is due to insufficient professional training of new recruits. Frankly, a certain number of the recruits joined simply to earn some money to earn a living and to cater for their families. They were not ready and willing to fight against civil war.
This is one of the major reason that made Johnson’s forces to hand over the security of the districts and provinces to Liberia forces.
Despite much information being available about Liberia’s economic state during the civil war , it’s obvious that the times were tough during that period. (1989s and 1997s). The economy of Liberia has entirely depended on agriculture and industrial sector based mainly on agricultural production. Hence this has made it to be among the poorest economically in the world since time immemorial.
Foreign aid has for sure been crucial for Liberia’s future economic stability since 2001. The first international donors’ meeting was conducted in Tokyo in 2003 with the intention of upgrading Liberia to a better economic level state (Nielsen et al., 2011). The meeting held reached an agreement of reconstructing Liberia with almost USD 6.5 billion for the next 5 years or so. Although the money is estimated to be three times higher than Liberia, the country has remained to be the among the least developed country in the entire world.
Recently, (2011) at the international conference in Germany, Liberia leader stated that Liberia requires USD 10 billion foreign aid every year within a span of ten years. The conference emphasized that the amount of foreign aid sated to be delivered for economic and social developments projects and not just security related aid (Savun and Daniel, 2011).
The international donors pledged USD 15 billion in development aid within a four years span. Therefore, a network of NGOs should be established in Liberia and humanitarian aid specifically the money from international donors, should be circulated through this network. This could better equip the authorities to make better use of international aid thus ensuring that it reaches ordinary citizens of Liberias. Local experts and researchers have most of the time complained that only 9 to 21 percent of foreign aid reaches the Liberia people due to the corruption and selfishness that is in the Liberia government.
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