Foreign Aid is the transfer of money, goods, skills, or food from a developed nation to a developing nation.
It can take various forms:
This is for a specific purpose and could be used to build infrastructure or purchase goods from the donor country
This means the receiving country can choose to spend the money as it sees fit
Emergency food supplies are donated – for example, during a drought or war. Australia has given food aid to many countries, including Iraq and Sudan
Expert personnel – such as technicians, scientists, educators, and economic advisors – move into a developing country to assist in development programs
Essentials such as food, clothing, shelter, and medical services are provided in response to a natural or human disaster, such as earthquakes or civil war
Sources of Aid
Aid is provided both by government and non-government agencies. The official form of government aid is overseas development assistance (ODA), which can be in the form of loans or grants
Are transferred funds that must be repaid with interest over a set period of time.
The interest rate will depend mainly on the purpose of the loan
A grant is an outright transfer payment that does not have to be repaid
ODA can be given as bilateral aid or multilateral aid
Non Government Organisations (NGOs)
Come in 2 main forms:
From voluntary and religious organisations and non-government organisations, such as the Red Cross, World Vision, and CARE Australia
From banks and financial institutions that give loans to make a profit.
Why Australia gives Aid
Australia gives aid because we want to help those less fortunate than ourselves
Nearly 1 billion people live on less than US$1 a day
2 billion people have no access to clean water, while 150 million children never get the chance to go to school
Why Australia gives Aid
Australia gives aid to other countries because it improves our regional security.
Australia helps partner governments improve law and order, prevent and recover from conflict, and manage a range of transnational threats such as people trafficking, illicit drugs, HIV/AIDS and other communicable diseases.
By helping to build stronger communities and more stable governments we improve our own economic and security interests.
Where does Australia give Aid?
Australia's aid program focuses on the Asia Pacific region. The international community recognises Australia's leading role in the region, particularly in PNG and the Pacific.
The geographic focus of Australia's aid program also makes sense given that two thirds of the world's poor, some 800 million people, reside in the Asia Pacific, yet receive less than one third of total aid flows.
Australia continues to provide selective assistance to Africa and the Middle East, primarily working through international and non-government organisations.
The Australian Government recognises the valuable role of NGOs and works with them to deliver around seven percent of the aid program.
Australian NGOs bring particular strengths to Australia's aid program. They mobilise public support and voluntary contributions for aid; they often have strong links with community groups in developing countries and they often work in areas where government-to-government aid is not possible.
Many also have expertise in meeting people's basic needs, particularly in emergency situations where quick and flexible responses are essential.