This document discusses why LDCs (Least Developed Countries) accept foreign aid. It begins by defining LDCs as low-income countries that are vulnerable to economic and environmental shocks with low human development. It then lists several reasons why LDCs accept foreign aid, including that it can provide humanitarian relief during crises, stimulate economic growth, help expand markets, develop basic infrastructure, improve agriculture, and relieve poverty. However, it also notes some problems with foreign aid for LDCs, such as increased corruption, dependency on donors, mainly benefiting elites rather than unemployed citizens, and potentially raising inflation.

1. WHY LDCs ACCEPT
AID
NAME – MOHD FAIZ
ROLL NO. - 21AEM04
ENROLL NO. – GM9271

2. What is LDC?
Least Developed Countries or LDCs
are the low-income countries that are
highly vulnerable to economic and
environmental shocks and have low
levels of human assets.

3. The UN Committee for Development Policy (CDP)
reviews the list of LDCs every three years and
makes recommendations on the inclusion and
graduation of eligible countries.
For doing so the committee uses three criteria:
1. Human Assets
2. Economic Vulnerability
3. Income per Capita

4.  There are currently 46 countries on the list of
LDCs which is reviewed every three years by the
Committee for Development
 Countries may be removed from the LDC
classification when indicators exceed these criteria
in two consecutive triennial reviews.
 At the UN's fourth conference on LDCs, which
was held in May 2011, delegates endorsed a goal
targeting the promotion of at least half the current
LDC countries within the next ten years.

5. What is Foreign Aid?
Foreign Aid is the international transfer
of capital, goods, or services from a
country or International organization for
the benefit of the recipient country or its
population. Aid can be economic,
military, or emergency humanitarian

6. Reason Why LDCs Accept Aid
1. It can be used as humanitarian aid. This form of aid is generally
given during times of great distress such as natural disasters until the
state can support the disaster relief effort. The European Consensus
on Humanitarian Aid categorizes humanitarian aid as a “…needs-
based emergency response aimed at preserving life, preventing and
alleviating human suffering, and maintaining human dignity
wherever the need arises if governments and local actors are
overwhelmed, unable, or unwilling to act.”
2. It helps with economic growth in LDCs. Aid is generally given in
countries that are characterized as low-income or that have high
unemployment rates. This results in low savings and investments,
meaning the capital stock is small. Countries that are provided aid
need rapid economic development. Providing aid stimulates the
growth of the world economy along with promoting economic
development within the region.

7. 3. It can help with market expansion. Providing aid to a country
could mean the expansion of goods and resources that can be shared
between the two countries. This can attract new investors into the
country further improving the LDCs economy.
4. It helps with basic infrastructure in LDCs. Another key
component to promoting a strong economy is the expansion of a
well-developed infrastructure. Basic necessities such as transport,
communication, power, education, health services, and industry
serve as key components to building a strong and long-lasting
infrastructure.
5. It helps to promote improvements in agriculture. Aid can be
used to teach farmers how to utilize their land and resources more
efficiently to produce more crops. This, in turn, provides vitamin
and nutrient-giving foods to people living in LDCs.

8. 6. It can help with poverty relief. Many of the global poor live in
rural areas where they do not have access to adequate medical
treatment and education. Therefore this Aid helps them in fulfilling
their basic necessities.
7. It promotes political ties. Aid can be used to establish and
strengthen the connection between the donor and recipient
countries. Aid is given to LDCs to promote solidarity and
companionship.

9. Problems for LDCs in Accepting Foreign Aid
1. Foreign aid is associated with high corruption. It is evident that the
financial support acquired is embezzled by the political class and
does not perform its allocated purpose.
2. Foreign aid heightens the dependency level. LDCs may raise the
dependency on their supporters hence rendering them highly
indebted.
3. Foreign aid mainly benefits employers. The unemployed and low-
income earners are not often beneficiaries of foreign financial
support. It, however, helps individuals that are already wealthy.
4. Foreign aid may raise inflation levels. An increase in economic
development translates to a rise in the prices of commodities which
is more challenging to the poor.

10. THANK YOU