Foreign Aid and Remittance

Added: 06-12-2018

This Crash Course video summarizes the history of international aid from its beginnings in the Marshall Plan as an economic tool, to its global application to support humanitarian needs largely in the ‘developing’ world. It also covers the pitfalls of corrupt aid and the phenomenon of international remittances, or payments by migrants to their home country.

Marshall Plan immigrants migrant workers humanitarian aid overview save payment Cold War remittance Europe efficacy allies corruption foreign aid

Type Reading Time Author Date Source
video 10 minutes CRASH COURSE 05-27-2016 https://www.youtube.com/
Type Reading Time
video 10 minutes
Author Date
crash course 2018-06-12 00:00:00 UTC
Source
https://www.youtube.com/
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Key Takeaways
  • While colonists argued they provided aid to their colonies, foreign aid did not begin in earnest until the Marshall Plan was used to rebuild Europe following WWII. 
  • The money given to foreign aid has grown by five times since 1960 and has become focused on humanitarian over economic aid. 
  • Remittances, money transferred from migrants to their country, make up 25% of some countries GDP, such as in Nepal and Tajikistan.
  • There is some critique on whether foreign aid actively supports the economy or not.

Summary 

This ten minute Crash Course video provides a summary of humanitarian aid and foreign remittances. Foreign aid ostensibly began during colonialism when European empires used “civilizing” as an excuse for their ruling of other countries. Following WWII, aid to support the economic growth began in earnest with the Marshall Plan to rebuild Europe. As Europe regained economic independence, aid was given by the USA and Russia to other countries during the second half of the 20th century to gain political loyalty during the Cold War. 

Global spending on aid was six billion dollars in 1960 (adjusted for inflation), but that rose to 46 billion in 2011. Aid is often directed at areas in need of humanitarian support. European countries often tend to favor giving aid to former colonies and countries that trade with them. Examples include the USA sending Israel hundreds of millions of dollars and over a billion dollars to Egypt annually. 

According to Crash Course, experts are divided on whether aid effectively supports economic growth in countries or corruption. A common critique of the seemingly innocuous support of countries during a famine is that it can hurt local farmers and create dependence. 

To conclude, the video covers remittances, which are payments made from migrants and immigrants to their home country. Around 230 million people sent approximately 500 billion dollars in 2013. In smaller ‘developing’ countries, remittances can make up to 40% of the country's GDP.